The long-term consequence of failing to invest in employees and their experience, whether that’s new skills, changing attitudes on work/life balance or job flexibility. We are staring down a recession with little clarity and experiencing layoffs seemingly every day which keeps focus in the near term, but larger challenges exist on the horizon. There is a significant talent debt looming, and it has the potential to stymie business growth and hobble innovation for years to come.
Just as financial debt accrues interest over time, a talent debt accumulates as employees lack opportunities to learn, grow, and advance in their careers. The result is a workforce that is at risk of becoming disengaged, demotivated, and less productive.
Worse, a talent debt leads to a shortage of critical skills and expertise within an organization. This will come at a time when the economy demands a massive transformation of supply chains, technology, and incorporation of artificial intelligence into every way of working. An entire range of new skills will be required, and businesses that don’t invest in their employees may be damning themselves.
While it may seem counterintuitive to think of investing in employee well-being and skills right now, I contend that the employee experience should be a top priority for every business leader.
40 Million Resignations is Normal
Job movement is a constant in the U.S. economy. According to the Bureau of Labor Statistics, approximately 40 million people have resigned each year since 2017. For example, in 2018, 40.1 million resigned, and in 2019, 42 million did so.
2021 saw a seven-million-person talent debt payment, as lockdown orders prevented the normal flow of talent movement in 2020. People who would have normally switched jobs stayed in their current positions for longer than they otherwise would have. In other words, the pandemic served as an artificial suppression of normal turnover causing “the Great Resignation” in 2021 with 47 million people resigning — five to seven million more than a normal year.
That seven million was enough to upend supply chains, the reopening’s of restaurants, and countless other disruptions to business operations.
Avoiding a High-Interest Talent Debt
Today, economies all over the world are in a period of recession-induced layoffs, creating a suppression of talent movement with those still employed. This hunker down mentality will exacerbate employee disengagement, lost productivity and erosion of company culture. Talent debt isn’t inevitable; there is time to intervene to mitigate the risks of lower productivity and engagement. The steps that business leaders take today will lessen the impact of talent movement later – specifically actions that center around employee engagement, employee experience, and more personalized technology.
Because productivity is entwined with engagement, finding, and addressing the source of disengagement is paramount. Just about every company conducts employee engagement surveys; unfortunately, precious few use those results to truly improve the employee experience. That fact alone causes disengagement, sending a clear message that the employer has heard employee feedback, but then does not or cannot act upon that feedback. What is often called survey fatigue can better be described as “tired of offering the same feedback and not seeing change” fatigue. Acting on, and investing in, initiatives that improve engagement will go a long way in reducing the impending talent debt, as employees will feel both heard and valued.
Flexible Ways of Working
Lockdown taught employees how to work efficiently at home, and how to better integrate home duties, such as child care, with their work obligations. This was a major success for employees, and 72% want to stay with a hybrid remote-office model. What’s more, 40% believe they’re more efficient when they can decide when to come into the office.
In recent Microsoft research, 87% of employees report being productive with flexible working while only 12% of managers believe the same. More and more employers, empowered by the recession and actions by peers, are requiring workers to return to the office. This won’t increase productivity, but it will most certainly increase the talent debt. Finding the balance with flexibility to support employees, recognizing and supporting managers as they adapt to new ways of managing and creating an outcome over effort mindset are all key to creating a sustainable workforce. Flexible work models are critical to improving the worker experience.
Better Integrated Technology
Poorly integrated technology is another key driver of dissatisfaction and one of the most readily addressed yet still unresolved drags on employee experience. A result of overzealous product sales combined with a technology centric view of work has created an experience where the employees themselves are often the glue that holds enterprise technologies together. From a technology point of view, it may seem reasonable and even preferable to have distinct systems for tracking hours, managing benefits, project management, customer service, collaboration, sales and countless others; often with overlapping technologies doing similar tasks (e.g. Zoom, Slack, Teams).
From an employee point of view, technologies that do not work together, lack role-based personalization and require significant upfront learning investments are often an impediment to being productive in their role. This is never more apparent than with new hire onboarding experiences already challenged with adapting to new technologies and processes. Last year, nearly half (49%) of workers said they’d quit their job due to technology frustrations, according to a ZDNet.com article. Reorienting technology investments to specific role needs, quantifying impact to task outcomes and creating an integrated digital employee experience are all readily actionable changes that will increase productivity, reduce overall license costs, and minimize attrition and recruiting costs.
Pay Down Talent Debt Today
Like any good debt reduction strategy, understanding the root causes of talent debt growth and applying mitigation strategies are key. Applying a human centric view and a commitment to consistently invest in the employee experience will pay down the talent debt. It is always the right time to develop more engaged employees but never more so than after a recent layoff event where engagement and operations are both disrupted. Disengagement drives down productivity creating operational risk and that risk must be mitigated to ensure sustainable operations and growth.
We as leaders have a responsibility to our people and the business to pay down this debt before we face a balloon payment that could make it impossible to balance.
As SVP of Employee Experience at Rightpoint, Jesse Murray is a trusted advisor for employee experience transformations including employee engagement and retention, organizational insights, new ways of working, knowledge and search, productivity and efficiency and digital workspaces.