The massive changes in how we work, where we work, why we work, who we choose to work with, and the technologies we use every day have landed on the shoulders of every leader. Executive Networks research among 112 CHRO’s, entitled The Global CHRO of the Future, examines the emerging challenges CHRO’s are grappling with and suggests strategies to address these.
First, our research found eight in ten (83%) CHRO’s identified talent attraction and retention as their number one challenge and 50% of these respondents report retention was a particular issue among high demand roles.
While the quit rate decreased in September, 2022 to 2.7% down from 2.8% the previous month, this is only part of the story. The bigger issue is to examine the why behind these high quit rates. In our research we found voluntary turnover rates varied widely by industry; with professional services having the highest rates up to 20 % for knowledge workers and 40% for direct patient care nurses.
This led us to ask our sample of 112 CHRO’s a follow-up question: What are the contributing factors to voluntary turnover? Employee stress and burnout were number one, followed by lack of transparency in career growth, work life balance issues and a request for additional compensation.
It’s not surprising employee stress and burnout tops the list of reasons workers are voluntarily leaving their jobs. In fact, 1 in 3 workers say they would opt for better mental health benefits over higher pay, says the SHRM Mental Health in American the 2022 Workplace report. Companies are addressing this with 78% offering workplace mental health resources or plan to in the next year.
CHRO’s must take a leadership role in uncovering the “why” behind high voluntary turnover rates and develop strategies to address this.
A few examples of how this can be accomplished include:
Create a Strategy to Focus on Mental Health and Well-Being
Employee stress and burnout was ranked the first reason workers are exiting their job. The data from the American Stress Institute reinforces this. Three in four adults regularly feel stressed, according to the American Psychological Association’s survey “Stress in America”. Workers who feel burned out cite multiple stressors, including COVID pandemic, rising inflation, the Russia-Ukraine crisis., the lack of separation between work and home, unmanageable workloads and worries over job security, money and the economy. As disruptions continue, more Americans are reporting symptoms of prolonged and acute stress.
Employers Pay a Price
According to the American Institute of Stress, job stress and its negative impact on mental health cost U.S. employers nearly $300 billion every year.
That’s why companies like Microsoft are weaving mental health awareness and self-care into their culture. Microsoft is starting by expanding their people analytics function beyond measuring employee engagement to focus on how well their employees are thriving at work. According to the Microsoft Work Trend Index Data, workers around the world have a new “worth it” equation. Microsoft data found that 53% of respondents—especially parents (55%) and women (56%)—said they are more likely to give precedence to their health and wellbeing over work than before the pandemic. One of the ways Microsoft is tackling employee health and wellbeing is through their initiative “Microsoft Cares”, a platform enabling employees to access professional mental health counselors and wellness coaches and a host of legal, financial, dietician resources 24×7. In order to nurture employee well-being, organizations should take a holistic approach by embedding it into the fabric of the company.
Democratize Career Development and Growth
A lack of career advancement and career development was identified as the second reason for why workers are leaving their jobs. This issue of continuing to develop skills needed for the future is a real one as World Economic Forum estimates by 2025, 50% of the global workforce will require re-skilling. One strategy is to create a seamless way for all employees to gain greater visibility and access into new full-time jobs and an array of stretch opportunities and mentoring to grow their skills. This is especially true for younger workers, our future workforce. A LinkedIn survey found 40% of Gen Z workers said they’d be willing to accept a 5% pay cut for a job offering significant career growth opportunities. Schneider Electric is just one example of a company expanding its AI-based platform known as Open Talent Market (OTM), which can source employees’ ideal different opportunities throughout the global organization, which can encompass part-time and full-time positions, training, and mentorships.
OTM’s algorithm helps to remove biases such as gender, race, and age within the hiring process. As of March 2022 the OTM has 72,339 employee registrations — 77% of the global eligible employee base. Schneider Electric sees OTM as an enabler for career exploration and the company reports it has not seen a massive uptick in attrition rates for either recent joiners or those with in-demand technology skills since the expansion of OTM.
Remember to Nurture Your HR Team Members
Check in with your HR team members regularly as they have been on the frontline of massive changes in where, when, and how work gets done. HR’s role has recently expanded well beyond traditional people management to encompass business continuity planning, mental health initiatives, return to office strategies, furloughs, and expanding employee wellbeing benefits from merely a “perk” to a critical business strategy. It’s not a surprise that LinkedIn data found HR professionals had the highest turnover rate in the past 12 months. Globally,HR had a turnover rate of almost 15% while the overall average turnover rate was about 11%, meaning turnover in HR was over 35% above average.
As CHRO’s double down on uncovering the root causes of employee voluntary attrition, they must remember, choosing an employer is a lifestyle choice just as important as where you live, whether you work remote, hybrid or in the office, why you work and how who you choose to work with. Employers need to demonstrate a culture of care for all employees.
Jeanne Meister is Executive Vice President of Executive Networks, a senior peer community for global 1000 human resources leaders, and the co-author of “The Global CHRO of the Future” research study, a new Executive Networks survey of Chief Human Resource Officers (CHROs) employed at Global 1000 organizations.
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