The current post-pandemic era is an excellent time for companies to take a good look at their employee value proposition, says Matt Campbell, a managing director with Alvarez & Marsal Corporate Performance Improvement in New York City.
Campbell spoke with StrategicCHRO360 about how the workforce is segmented today, why employers should reevaluate roles when vacancies occur and what role AI can play in future plans.
How can employers attract and retain talent? What are common misconceptions that employers need to consider?
There has been lot of attention on talent attraction and retention paradigms for the current workforce—specifically, in the services sectors like retail, healthcare, hospitality, education and others that were significantly impacted by pandemic and are still recovering. This is an excellent time for organizations to revisit their employee value proposition.
Our work with clients repeatedly shows that while compensation is the most talked about factor, the data rarely support it as the core attraction and retention factor. Professionals want clarity on career beyond the immediate one to two years, and a positive career experience may look different across segments.
For example, success does not always equate to vertical growth. Millennials and Gen Z employees, specifically, think of their careers as a collection of varied experiences and accomplishments. Hourly workers can be just as concerned with reliability of schedules, flexibility to meet family obligations, and access to weekly payments as they are to small incremental base payment increases or the promise of long-term bonuses. Ultimately identifying the core engagement and retention drivers across distinct workforce segments should be the first step before implementing any lasting policies.
Through this process, employers should keep in mind that one-size-fits-none. Baby boomers approach employment differently than Gen Z workers and derive value from their employment differently, too. A common mistake that organizations make is replicating the “best” talent management practice across all demographics without measuring the impact across different segments—or worse, not segmenting their workforce at all.
How should employers navigate the shrinking labor market as it relates to demand for more specialized roles?
Over the last few years, organizations overhauled their talent strategies to account for the impact of the pandemic and the rise and fall of the hiring boom afterward.
There are structural issues with the labor market with baby boomers accelerating retirement, not enough workers entering the workforce, limitations on immigration curtailing access, and a withdrawal of participation in certain unusual segments like under 30 males.
Added to that, jobs have become increasingly specialized. Many employers with vacancies don’t adequately reevaluate jobs, consider what work can be stopped, how the job has changed since the last time it was filled, or which skills and qualifications are essential to the core function of a job. Some of the largest employers have started this reevaluation and removed unrequired barriers like degree qualifications or reducing the priority of those requirements.
In addition to a compelling employee value proposition, we support our clients to build comprehensive buy-borrow-build strategies around different capabilities in the organization and the external labor market pool. A fourth anchor, “the bot,” will become critical, as we capitalize on the use of AI and other technologies to automate and accelerate certain areas of work. With the introduction of large language models like ChatGPT, this will only increase as a key lever for “human-plus bot” workforces.
Buy-borrow-build-bot models must be data-driven including considerations like time-to-fill, skill availability and adjacencies, and task frequency to identify automation and technology enablement.
What should employers keep in mind in light of current economic conditions and uncertainty?
Recession and growth are natural features of an economic cycle. Organizations and leaders should build agile talent strategies that can flex to accommodate both. Critical to achieving this agility is using a disciplined process for workforce planning that incorporates robust testing against multiple scenarios.
Talent winners are not just laying people off indiscriminately. They focus on what future requirements will be and weigh the cost of accessing new labor in the future versus the holding cost. In planning for navigating cycles of downturn, recovery and growth, winners align business plans to future skills and scale needs and square that against other factors like whether their social media reputation and brand help or hinder the ability to attract talent in the future relative to competitors.
Workforce planning is a core business activity extremely critical in this economy. One common trend we are seeing is a focus on efficiency and, as a result, the use of technology and automation to accomplish more with less. The workforce plan should be financially feasible while also delivering on the talent strategy of the organization. The companies that are doing this well are, again, employing clear buy-borrow-build-bot actions for each functional group.
Core to the build tactics that employers are considering is how to reskill the workforce they have. As business models and technologies change, there is a rapid need to understand what new skills will be needed and how to help team members acquire those skills.
In these times, what should employers keep top-of-mind, considering changing skills profiles and different expectations around work?
Organizations should build their talent strategy and workforce plan around skills. They should start analyzing and linking key roles in the organization with the underlying skills that those roles need. This not only drives focus on securing the right skills internally and externally, but also informs the need and design of reskilling programs.
Technology’s impact on the way we work has been well under way for years, but AI has added a new dimension. So far AI capabilities have primarily impacted white-collar jobs, specifically in increasing productivity and eliminating manual tasks. The emphasis on key future skills is increasingly important as our relationship with AI evolves. Organizations must consider how AI fits into the way work gets done and define what skills the human workforce needs and how those skills can be augmented and enhanced by AI tools.