There is no doubt that today’s CEOs are under duress. Uncertainty in the economy and ongoing turbulence in the current operating environment has created unprecedented challenges and disruptions. Today’s CEOs must forge ahead, moving past what is getting in their way to achieve their investors’ expectations and strategic goals.
As a former chief human resources officer, a CEO myself at Summit Leadership Partners and a coach of CEOs, I have first-hand experience with the many talent disruptions businesses are facing today. I have been discussing this issue at length while on the road for the past month speaking at several CEO forums, and at Summit Leadership Partners, we’re seeing four major types of talent and human capital disruptions: retention, employee burnout, culture, and engagement.
Retention During the Great Resignation
According to the U.S. Bureau of Labor Statistics, more than 47 million people voluntarily quit their jobs in 2021. That is an astonishing 31% of the total U.S. workforce. These are unprecedented numbers, but they’re consistent with the trend over the past decade—a steady increase of workers voluntarily leaving.
At the same time, roughly half of America’s working population is actively job searching or watching for opportunities right now. For CEOs, the critical question is: Why are people leaving?
Workers were increasingly interested in a work-life balance but living through a pandemic has made many prioritize their life outside of work. Additionally, many workers have made it clear they enjoy working from home, and 36% have said they will quit if made to return to work in person.
There are additional reasons employees leave, including poor managers, unclear career advancement opportunities and a lack of meaningful work. Data from Entromy, our organizational assessment survey partner, shows that employee net promoter scores, which help determine employee satisfaction and loyalty, are linked highest with company pride, confidence in success and being energized by work.
Recommendation: Fortunately, there are several tools CEOs can draw on to increase satisfaction and retention. Most often, employees’ experiences are directly related to their managers, which makes management development and having a high bar for line managers are critical. An excellent way to get feedback from employees on their managers and overall work experience is to conduct ‘stay interviews’ and skip level discussions with your top talent. Find opportunities to get your people involved in strategy development, shaping the company’s future and even community engagement to build deeper connections.
Quiet Quitting and the Role of Employee Burnout
Quiet quitting continues to make headlines. While the term means different things for different people, it is basically about employees who no longer go above and beyond and only do only what the job requires, especially when they feel they’re not being paid or recognized enough to put in the extra effort. Why is it a disruptor? It’s a sign of widespread burnout and people are checking out at work.
Throughout the workplace, engagement—the level of an employee’s commitment and connection to an organization—has gone down, and disengagement has gone up. This is especially true in employees younger than 35. According to a recent Gallup survey, “quiet quitters” make up at least 50% of the U.S. workforce. That isn’t entirely surprising given that we know that burnout affects over 70% of employees, burnt-out employees are 2.6x more likely to seek out a new job, and 36% of employees say their organizations are doing nothing to prevent burnout.
The top three reasons people are experiencing burnout are a lack of role clarity, working from home while balancing personal commitments, poor training at work in new roles, limited support from coworkers or managers, and unrealistic deadlines or pressure to meet goals.
Recommendation: To minimize burnout, work with your team to set clear role parameters, make yourself visible, offer support, and increase collaboration and team building. Be realistic about your timelines and give people the resources they need to accomplish their goals. Encourage your people to take their earned time off and recharge. While most CEOs publicly laud the employees who work long hours and weekends, it is important to reinforce this is not the only way to get ahead in the company.
Company Culture in a Remote Working Environment
The pandemic was a catalyst for remote work, and many employees are reluctant to return to an office. Most workers want to maintain some level of remote flexibility in their jobs, so when people have the chance to work flexibly, 87 percent of them take it.
Some 58% of Americans have the option to work remotely at least one day per week. Several well-known companies, including SAP, Deloitte, Reddit and Spotify have announced a fully remote or hybrid option, meaning they will not require employees to resume working in the office. Others, including Netflix and Goldman Sachs, are asking employees to return mainly to the office. Overall, most companies are allowing for either fully remote or hybrid work arrangements.
Remote working arrangements can make communication difficult and create new hurdles when onboarding new employees. The most important issue is culture. How can you shape culture if you aren’t bringing workers into a physical office space or your team is spread across the country?
Recommendation: If possible, hold periodic in-person gatherings to help employees maintain bonds or require a few days each month or week for people to come to the office. Schedule company-wide meeting times and cadences that work across time zones, so it is easy for all employees to take part. Create peer connections, which establishes new and personal resources for employees. Also, promote learning together. Have monthly learning sessions where you come together, and outside speakers come in.
Engaging Employees During a Recession
There are varying reports on whether we’re currently in a recession or not, but even if we aren’t, the possibility of one in the near future is looming. The economy is struggling in many ways.
We’ve already established that engagement drives retention and job performance. Engaged employees are involved in, enthusiastic about and committed to their workplace, and during times of economic uncertainty, engagement becomes even more important. Despite a recession, employees can be highly engaged and committed to their company.
In a challenging economy, workers become concerned their basic needs and expectations such as job retention, promotion opportunities, pay raises and whether there will be continued professional development opportunities.
Recommendation: Employees want to trust in the leaders of the organization to set the right course and they want to understand how they fit into the organization’s future plans. Spend extra time communicating the purpose of the company and how your people fit in. Show how you’re investing in employees to increase their success (even if its scaled back), which will further demonstrate that you value people as your most important resource. Transparent communication is also critical. Do not over protect your employees from the realities of the economy or business conditions or they won’t believe you. Share the good, bad and ugly showing humility and commitment to your purpose.
Critical CEO Attributes During Challenging Times
At Summit Leadership Partners, our executive assessments repeatedly show the importance of emotional intelligence. Effective leaders have humility and are open to feedback. They encourage diverse perspectives and points of view, and they are empathetic. Be real and be open with your people.
Additionally, our 2020 study of private equity portfolio company CEOs found that successful CEOs demonstrate capabilities in building and aligning the management team, maintain transparency with the board, and focus on data-driven decision-making while also accepting input from others. These attributes separated those CEOs who thrive and fail during turbulent times according to both CEOs and PE investors.
Most importantly, today’s leaders must remain adaptable. Situations are changing rapidly, and there is no single playbook. Focusing on effective leadership and putting employees first will help CEOs navigate the many disruptions they face today.
Written by Dan Hawkins.
Have you read?
Best CEOs In The World, 2022.
Global Passport Ranking, 2022.
World’s Richest People (Top Billionaires, 2022).
Economy Rankings: Largest countries by GDP, 2022.
Top Citizenship and Residency by Investment Programs, 2022.
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