Talent pool: new tricks to win back non-traditional workers
This Wednesday Briefing looks at new research from McKinsey on five new typologies of workers that employers can reach to fill the void in the labour market
The ‘Great Resignation’ has caused a tectonic shift in the labour market. In the U.S. alone, there were 11.3 million open jobs at the end of May 2022. This is up substantially from 9.3 million open jobs in April 2021. And despite big efforts from companies to hire new talent, the voluntary quit rate is around 25 per cent higher than pre-pandemic levels.
These figures indicate an underlying structural imbalance between how companies are attracting talent and what the talent actually wants. Employers can no longer rely on traditional levers such as compensation, titles and advancement opportunities to attract and retain people. While these elements are still important, especially to more traditionist workers, they are not enough to win back the non-traditional workers.
‘Employers can no longer rely on traditional levers to attract and retain people…’
To understand how companies can pick up new tricks to win back talent, McKinsey conducted a large global survey across six countries to learn about what is driving people to stay, leave or return.
The results found no single solution that will attract enough people to fill all the job opening and retain a productive workforce. Instead, employers now need to take a multi-pronged approach to reach different talent pools. The research identified five types of workers that employers should consider in their talent approach:
1: The traditionalists
Traditionalists are career-oriented people who care about work-life balance but are willing to make trade-offs for the sake of their jobs. They are motivated to work full-time for large companies in return for a competitive compensation package. While a large proportion of the workforce still identifies with this archetype, there are not enough Traditionalists to fill all the jobs that are available.
2: The do-it yourselfers
This group represents the largest share of respondents. They value workplace flexibility, meaningful work and compensations as the top motivators for potentially returning to the traditional workforce. They are typically between the ages of 25 to 45 years old. During the pandemic, work-related stress, toxic managers and a desire for autonomy made these people look for something different.
3: The caregivers and others
This archetype has grown substantially during the pandemic. Members of this group are motivated by compensation but have other priorities for returning to their jobs. They require workplace flexibility, support for employee health and wellbeing, and career development. This group typically consists of people between the ages of 18 and 44, with more women than men, many who are parents or caregivers.
4: The idealists
Idealists tend to be represented by the newest generation entering the labour market. Workers aged 18 to 24 who typically do not have dependants, mortgages, and other responsibilities prioritise flexibility, career development, advancement potential, meaningful work, and a community of reliable and supportive people. They are less focused on compensation and more bothered about community and values. To woo them, companies have to demonstrate willingness to invest in this group’s development and create a strong organisational culture that emphasises meaning and purpose.
5: The relaxers
The people in this cohort tend to be retirees. They will be people who might not be looking for work but who might return to traditional work under the right circumstances. They will want more than the traditional value proposition to be enticed back into the workforce. This group represent the largest segment of the latent workforce.
Spotting the humbug
Volatility in the U.S. labour market is just one facet of an overall economic picture that is currently sending out contradictory signals. If the labour market is really that tight, why have some companies announced a hiring freeze? Are we about to enter a global recession or just managing to skirt round one? If firms are really determined to rationalise their office space use then why the record levels of real-estate deal-making in major commercial centres?
It’s not that the different data points are faulty, it’s just that they don’t line up to create a coherent economic whole. In musing on this situation, New York Times columnist Paul Krugman recently reached for a famous and maybe apocryphal story about Charles Darwin. According to the tale, two boys glued together pieces of various insects — a centipede’s body, a butterfly’s wings, a beetle’s head and so on — for a joke. They then presented their creation to the great naturalist for identification.
‘Did it hum when you caught it?’ he asked. When they said yes, he declared that it was a humbug.
Focusing on talent wellbeing
As labour markets continue to shift, supporting wellbeing continues to be just one way employers can show they care about their people. Talent expectations are evolving and employers must respond. To stay up-to-date with the latest wellbeing trends and learn from large employers such as Standard Chartered, join the WORKTECH22 Wellbeing conference at the Lutron Experience Centre in London on Tuesday 20 September 2022.