The 2022 State of Talent Optimization Report is out, and the results are shouting. The Great Resignation (aka, The Big Quit) has dominated headlines. Workers are tired and frustrated, now recognizing time as their greatest asset and are reassessing why (and how) they work.
My colleagues at The Predictive Index just released the ’22 SOTO, surveying 326 executives, to begin to understand the complexities driving the organizational and personal choices that are being made and the implications that are brought about. The headline is that companies that prioritize the employee experience have a clear advantage in reducing turnover compared to those that don’t. Here are a few key stats:
One in five employees left their job in 2021, with the number one reason cited for leaving is “inflexibility” (32%).
The cost of a single resignation is $11,000. That translates to a $100,000 loss to a small business of 50 people or $1 million to a mid-size business of 500.
Only 46% of companies have a business strategy, down from 76% in 2021 and 66% in 2020. Further, 13 of 15 fundamental talent optimization practices declined in ’21. COVID, workforce and workflow changes, supply chain, and the ability to retain and attract talent have taken a clear toll on executives, creating a loss in strategic clarity.
Even fewer companies (38%) have a talent strategy, down from 55% in ’21.
Companies with the right people in the right seats experience 42% lower turnover than their peers.
Twelve months ago in this same space, I closed my article with this prediction: I also believe that 12 months from now, the impact of whatever 2022 brings us and the trajectory of our organizations will have everything to do with the decisions we are making now. This is not prophetic; it’s simply reasonable. So, what are we to do? Here’s a snapshot of what leading companies are doing:
Invest in mental health. You may have heard the prayer, “Lord, we’re sick and tired of being sick and tired.” I see it at all levels. Companies that will do the best with people will address this head-on. As one executive cited in the report, “We want people to go home and be happy. [… I tell my employees,] ‘Bring your problems to work. Let us know what’s going on. Let me help you so, inevitably, we can get a better you showing up.’”
Invest in retention. Specifically, leading companies invest in: helping people find purpose in their work (47%), creating opportunities for career growth (47%), and creating inclusive space that values all employees ideas (41%).
Rethink the work. Remote-friendly companies are experiencing 33% lower turnover than their peers. I spoke to a firm recently that is 100% on-site, and there is a clear, agreed upon advantage for doing so, given the nature of its work. But that isn’t necessarily true for everyone. Necessity is the mother of invention, and the need to be remote has demonstrated in many cases that effectiveness can be sustained and in some cases improved through flexible work arrangements. I hear a lot about “future-proofing” our companies. I think a healthier mindset is one of “future-flex” — being nimble and agile in how work gets done. The point here is that there is no one-size-fits-all approach. Do the work to reflect on what your business (customers, suppliers, team members) needs and be open to new possibilities.
One final tidbit. 29% of respondents cited “Belief in the leadership team” as a primary driver of retention — a close No. 3 on the list. If 2021 did anything, it gave multiple reasons for our people to assess its belief in us as leaders. I fear that the data on retention is an indictment that finds us lacking in many ways.
I don’t believe that rolling over a calendar is reason to think the year forward will be any easier — any more than I believed that a year ago. Again, this isn’t prophecy; it’s logic. Remember, talent has choices. This demands that we remember that as leaders, we have choices, too: choices in how we lead, how we think, how we value work and the people we count on.
Chuck Hyde is the founder of C3 Advisors, a firm focused on executive development and talent optimization. He can be reached at www.c3adv.com. The opinions expressed are those of the author.