What CHROs Can Do About the Talent Attraction and Retention Issue

The massive changes in how we work, where we work, why we work, whom we choose to work with, and the technologies we use every day have landed on the shoulders of every leader. An Executive Networks report based on data collected from 112 chief human resources officers (CHROs) entitled “The Global CHRO of the Future” examines the emerging challenges CHROs are grappling with and suggests strategies to address them.

First, our research found 8 in 10 (83%) CHROs identified talent attraction and retention as their number 1 challenge, and 50% of these respondents reported retention was a particular issue among high-demand roles.

While the quit rate decreased in September 2022 to 2.7%, down from 2.8% the previous month, this is only part of the story. The bigger issue is the why behind these high quit rates. In our research, we found voluntary turnover rates varied widely by industry, with professional services having the highest rates—up to 20% for knowledge workers and 40% for direct patient care nurses.

This led us to ask our sample of 112 CHROs a follow-up question: What are the contributing factors to voluntary turnover? Employee stress and burnout were number one, followed by a lack of transparency in career growth, work/life balance issues, and a desire for additional compensation.

It’s not surprising employee stress and burnout top the list of reasons workers are voluntarily leaving their jobs. In fact, one in three workers say they would opt for better mental health benefits over higher pay, says the Society for Human Resource Management (SHRM) “Mental Health in America, a 2022 Workplace Report.” Companies are addressing this, with 78% offering workplace mental health resources or planning to in the next year.

CHROs must take a leadership role in uncovering the “why” behind high voluntary turnover rates and develop strategies to address this.

A few examples of how this can be accomplished include the following:  

Create a Strategy to Focus on Mental Health and Well-Being

Employee stress and burnout were ranked as the number one reason workers are leaving their jobs, and the data from the American Stress Institute reinforces this. Three in four adults regularly feel stressed, according to the American Psychological Association’s survey “Stress in America.” Workers who feel burned out cite multiple stressors, including the COVID pandemic; rising inflation; the Russia-Ukraine crisis; the lack of separation between work and home; unmanageable workloads; and worries over job security, money, and the economy. As disruptions continue, more Americans are reporting symptoms of prolonged and acute stress. 

Employers Pay a Price

According to the American Institute of Stress, job stress and its negative impact on mental health cost U.S. employers nearly $300 billion every year.

That’s why companies like Microsoft are weaving mental health awareness and self-care into their culture. Microsoft is starting by expanding its people analytics function beyond measuring employee engagement to focus on how well its employees are thriving at work. According to the Microsoft Work Trend Index Data, workers around the world have a new “worth it” equation. Microsoft data found that 53% of respondents, especially parents (55%) and women (56%), said they are more likely to place priority on their health and well-being over work than before the pandemic. One of the ways Microsoft is tackling employee health and well-being is through its initiative “Microsoft Cares,” a platform that enables employees to access professional mental health counselors and wellness coaches and a host of legal, financial, and dietician resources 24/7. In order to nurture employee well-being, organizations should take a holistic approach by embedding it into the fabric of the company.

Democratize Career Development and Growth

A lack of career advancement and career development was identified as the second reason workers are leaving their jobs. The issue of companies’ not continuing to develop skills needed for the future is a real one, as the World Economic Forum estimates that by 2025, 50% of the global workforce will require reskilling. One strategy is to create a seamless way for all employees to gain greater visibility into and access to new full-time jobs and an array of stretch opportunities and mentoring to grow their skills. This is especially true for younger workers, our future workforce. A LinkedIn survey found 40% of Gen Z workers said they’d be willing to accept a 5% pay cut for a job offering significant career growth opportunities. Schneider Electric is just one example of a company expanding its artificial intelligence (AI)-based platform Open Talent Market (OTM), which can source employees’ ideal different opportunities throughout the global organization, which can encompass part-time and full-time positions, training, and mentorships.

OTM’s algorithm helps to remove biases such as gender, race, and age within the hiring process. As of March 2022, OTM has 72,339 employee registrations—77% of the global eligible employee base. Schneider Electric sees OTM as an enabler for career exploration, and the company reports it has not seen a massive uptick in attrition rates for either recent joiners or those with in-demand technology skills since the expansion of OTM. 

Remember to Nurture Your HR Team Members

Check in with your HR team members regularly, as they have been on the front line of massive changes in where, when, and how work gets done. HR’s role has recently expanded well beyond traditional people management to encompass business continuity planning, mental health initiatives, return-to-office strategies, furloughs, and expanding employee well-being benefits from merely a “perk” to a critical business strategy. It’s not a surprise that LinkedIn data found HR professionals had the highest turnover rate in the past 12 months. Globally, HR had a turnover rate of almost 15%, while the overall average turnover rate was about 11%, meaning turnover in HR was over 35% above average.

As CHROs double down on uncovering the root causes of voluntary employee attrition, they must remember that choosing an employer is a lifestyle choice and is just as important as where you live; whether you work remotely, in a hybrid environment, or in the office; why you work; and whom you choose to work with. Therefore, employers need to demonstrate a culture of care for all employees.

Jeanne Meister is Executive Vice President of Executive Networks, a senior peer community for Global 1000 HR leaders and the coauthor of “The Global CHRO of the Future” research study, a new Executive Networks survey of CHROs employed at Global 1000 organizations.

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