The War for Talent is in full bloom—CEOs are already saying it is their number one challenge. There are more job openings than there are job-seekers. Wages are rising, and companies are offering hiring incentives, even in businesses like fast food. The Great Resignation prediction is coming true as massive numbers of people quit their jobs.
In a recent Forbes article, Jim Purcell lays out the case for elevating the role of HR. He provides great insight on demographics, workforce functions, and labor markets. And this quote is the bottom line: “Competition for talent is going to become brutal,” said Emsi’s Director of Staffing Product Ron Hetrick, in a press release announcing The Demographic Drought report. “Businesses can no longer assume there will be enough people to go around.”
From a business standpoint, this represents a dramatic strategic shift. Whereas financial capital and returns have dominated the corporate landscape for the last half-century, we now find ourselves in a world where both workers and investors are putting more value on non-financial metrics.
ESG investing has exploded in the last six years and now represents $35.3 trillion—more than one third of all managed assets in the world’s major economies. Investment firms focused on human capital strategies are achieving outsized returns, even saying, “the Human Capital Factor ‘strictly dominates all [other investment] styles across all metrics.’”
The value of cash compensation is evaporating as workers have so many higher-wage options. People want jobs they care about. They want to feel connected to the purpose of their work and their organization. And, most of all, they want to feel like their employers care about them.
Building trust starts with proving that you are invested in your peoples’ outcomes, not just your organization’s. At the individual level, are you treating and empowering each person in a manner that enables them to achieve their goals? Are you connecting their purpose with yours? Are you encouraging honesty and authenticity or demanding your workforce to conform to traditional ideas of work and professionalism?
It is essential to connect the dots between peoples’ work and how that will help them achieve their goals. Organizations will need to account for how work is performing at the individual employee level for:
- Core values and purpose—does the role align with how they want to impact the world?
- Personal development—does the work help improve relationship skills, enhance strengths, minimize weaknesses, and build the self-awareness required to do so?
- Rest and activity—does the job encourage and enable them to take part in their preferred recreational and recharging activities?
- Mental, physical, and financial health—is the organization providing access to progress and helping achieve outcomes for both the employee and their family?
This requires further accounting in social and natural impact. Understanding how an organization impacts its community and the environment is a vital step to being able to connect to an individual’s core values and purpose.
Much like CFOs evolved from number-crunchers into essential strategists, CHROs (or a similar role) must now partner with CEOs to set and achieve measurable human capital goals that allow the organization to access more of its human potential. Designing and implementing strategies that optimize individual outcomes will produce more value for the organization and build the culture that helps to attract, develop, and retain the best talent. Businesses who are committed to that at the highest level—not just the CHRO, but the CEO—will win the war for talent, impact, and profit.