Talent in 2023: Lean in or lose
The world of work has changed, and so have we. In an unsettled, uncertain market, a strategic approach to talent matters more than ever before… and I reckon it’s do or die. Here’s why.
2022 was weird. And hard. And exhausting. At least, it was for pretty much everyone I spend time with - many of whom are leaders or people specialists trying to attract and retain talent.
As we enter 2023, you’d be forgiven for wondering when the heck things will settle and we’ll arrive at that ‘new normal’ we’ve been hearing about for two… no, three years.
Here’s the thing. I can’t see it coming - at least not this year. Instead, we’re expecting even more complexity, challenge and change. But as my old mate, Sun-Tzu, said: “In the midst of chaos, there is also opportunity.” * And I reckon it’s a game-changer for authentic employers, if they make the right moves.
Before we look at that, let’s reflect on where we’re at on talent in 2023 Australia.
The challenge: A complex and uncertain talent market
It’s easy to get carried away with hysteria and hyperbole, but I really do think this is the strangest talent market Australia has seen, certainly in my lifetime. And I'm not alone. Reflections from people leaders, CEOs and HR professionals on the year gone by signal a need to reconsider HR strategies and priorities in 2023.
I think it’s best explained as a combination - or perhaps a collision - of three factors:
- 'Work' has changed, and so have we. Many people have re-evaluated the place that work has in our lives and what is important to us. And we've seen (and proven) other ways of working, earning, integrating… and, for some, self-actualising. And let’s be clear - COVID-19 didn’t cause it. It just intensified and accelerated existing trends linked to societal change, economic prosperity and advancements in tech. Take working from home, for example. We’ve had the desire and the tools to do it for years. But it took a pandemic to prove it and enough employers to see it as an opportunity rather than a gift or compromise. With hybrid work becoming the norm, 58% of organisations recently surveyed by Gartner recognised that including flexibility and individualised arrangements into their future offerings has actually become a strategic imperative. I suspect that percentage will only increase from here.
- There’s still so much competition for talent, and we've become accustomed to aggressive poaching, pay rises, sign-on bonuses and - say it quietly - a 'gun for hire' mentality. Perhaps the starkest example comes from the tech space. Software engineers were the hens’ teeth of 2021/22. But there are talent shortages and job switches everywhere you look - just try hiring tradies, care workers or hospitality staff right now. Complicated by worker mobility across industries, or the much-debated ‘Great Resignation’ in some countries, the rules of engagement for the ‘war for talent’ have also changed. Over the past two years, 48% of workers who left their jobs at the start of the pandemic did not return to the same jobs or industry, forcing recruiters to reevaluate how to attract and retain talent. This is very much the case in Australia. In recent research from McKinsey, more than one-third of employees across both public and private sectors expressed an intention to change jobs in the next three to six months.
- The global economy's in a very, very uncertain state. Australia is super different to most markets, and many working Australians have not recently experienced a major recession or downturn. But there are some ominous signs - just ask the many tech sector employees who jumped ship last year for big incentives and who are now clinging to a life raft. If a financial crisis does eventuate in any form, who knows how the Australian market will respond? Alarmingly, 42% of 800 HR leaders surveyed by Gartner admitted to not having a clear workforce strategy moving into 2023, an undesirable position to be in, given the expected economic and market disruptions.
So, here we are, in an economy that’s not sure whether to boom or bust and a talent market that’s (knee-)jerking from drunken oblivion to remorseful sobriety. Last year, many employers broke their pay structures (or created unfairly inconsistent ones), paying inflated salaries in an attempt to secure the hires they needed for big growth and keep people from leaving. Today, many of those same employers are projecting losses or slower growth, and tightening up on costs… and people.
Meanwhile, our bills keep rising, and employees are still asking for pay rises while employers read about the latest global layoffs and pessimistic economic projections in the US, Europe and, most worryingly, China.
Ugh. Shall we have some good news? OK, then.
The upside: Three reasons to be (very) positive
Despite everything, my team at EBA and I think there’s a huge amount to be optimistic about. The first obvious point is that Australia could well avoid the worst of any downturn overseas. We still have plenty going for us in that regard. But there’s more to it than that. Here are three positives to reflect on if you’re in leadership, HR, recruitment or any other people function.
After years of under-investment in talent, most executives (and enough boards) have now got the memo that people matter most, and that it’s both imperative and profitable to invest strategically in talent acquisition, culture and the employee experience. That’s great news for progressive, talented people specialists (in-house and agency). As for the lazy recruiters or dormant HR folks who’ve benefited from low expectations of their role? Well, we reckon things just got awkward. Get this - 47% of HR leaders surveyed by Gartner indicated that ‘employee experience’ is a top priority. And 53% didn’t. I know which side of that split my money’s on.
The key, if a downturn does hit harder, is to keep inspiring and educating your decision-makers/stakeholders on the importance of investing in talent for organisational survival and success, not just to fill vacancies.
- Employer branding in Australia is more effective and proven than ever, and it’s delivering results. The same goes for recruitment marketing, recruitment advertising, decent internal comms and employee experience strategy. Insights from McKinsey into the motivating and demotivating factors embedded within the employee experience suggest a need for organisations to rethink their employee value proposition. My team are proud and grateful to have helped Australian employers across many industries to do just that. We have helped organisations transform their talent attraction and retention results and shape cultures that drive commercial performance and true impact. So, there are proven, refined models and methods to justify your investment and deliver ROI, whatever your sector and size. Oh, and you don’t need to spend a fortune.
- Here’s my favourite: in my view, the current state of the market and Australia overall means that, more than ever, employers who genuinely do invest in their people and culture will win. Why? Well, let’s simplify it.
Fantastic, imperfect employers: now’s your chance.
- In a tighter commercial market, organisations need to be sharp, seek every competitive advantage, and deliver consistently and efficiently for their clients. Usually, much of that is driven or hugely influenced by the performance of your workforce.
- It’s consistently shown that an employee’s performance is not just about their ability but how they choose to behave. That, in turn, is affected by who they are and how they feel - about themselves, their work and their employer. In other words, connected people perform better.
We know that employees want to belong, to trust and be trusted, to grow, to have meaningful impact, and to be valued for that impact. Most companies have this in their job ads, and used it last year (along with big pay hikes) to persuade people to quit their role and join them. But how many delivered on the promise? We consistently hear from people who tell us the grass didn’t turn out to be greener. And in some cases, they found a desert… or an unexpected early exit with statutory redundancy.
With every false promise, with every layoff (even those that are respectfully handled), confidence and trust in employers and employment reduces.
So, forget the PR gloss and the ‘employer of choice’ awards nonsense. The best way to attract and retain better talent is… drum roll… to be a better place to work.
So, if you truly do deliver authentic, productive, meaningful employer/employee relationships…
If your culture really is based on trust, connection, ownership, opportunity and impact…
If you’re comfortable owning the imperfection and involving your people in your journey to improvement…
Then you’ll attract great hires who stay and turn engaged employees into high performers and active advocates for your culture and your brand. And these are powerful drivers of individual contribution and performance, and organisational success.
Remember, it’s not about being perfect. There’s no such thing. It is about leaders who are aware, invested and open - as much about the ‘work to do’ and the journey as the wins and the shiny stuff. And it’s about cultures in which employees are active contributors, not passive victims or unhelpful passengers.
So, there’s lots to play for! The kicker? It’s not going to be handed to you on a plate. Or, more specifically, it’s not enough to be an inherently ‘good place to work’ for the talent you need. You have to truly understand why people choose you (or don’t), what drives them to keep showing up (or not), and how you can keep evolving and improving with your people. Then you need to articulate and amplify your talent proposition effectively and consistently - with your people and their experiences front and centre.
Only then can you truly leverage your brand and reap the talent rewards.
And in the next article I write, I’ll show you how.
* Sun-Tzu and I aren’t actually mates. He was a bit older than me. And I think we’d struggle anyway, to be honest. We’re both too intense.