The economic recovery in 2021 is putting a premium on execution. Why? Because the operating environment is getting more stable and predictable: 2020 was the year of major strategic changes but 2021 is the year when companies need to execute well to take advantage of the improved economic environment.
However, how do you even know how well your organization is currently executing? Financials cannot give the full picture since they don’t tell you how much better you could perform.
Many of our Line-of-SightSM Certified Partners are also talent optimization consultants because they have a passion for execution - after all, you can only execute through your people. But there is more to execution than human capital.
Line-of-SightSM helps mid-market companies to large enterprises execute better. It looks beyond talent to help you assess the 5 Key Success factors for Execution (let’s call them KSEs): Strategic Understanding, Leadership, Balanced Metrics, Activities & Structure, and yes, Human Capital.
This blog is part of our series of simple tips on execution. Every blog discusses how you can improve each of the five KSEs.
Human Capital: Preparing for the Turnover Tsunami
Surveys show that between 25% and 50% of employees plan to look for a job this year and will do so as soon as the effects of the pandemic subside. Employers were experiencing high employee churn prior to the pandemic last spring, but since then, voluntary turnover reached its lowest level in nine years as employees hunkered down among high economic uncertainty. We now predict voluntary job-leaving will increase significantly in 2021 as employees resume the job searches they put off for the past year.
If you think we’ll see an uptick in turnover similar to what we’ve experienced after the 2008/2009 financial crisis, think again: the once-in-a-generation pandemic has created unprecedented circumstances that will amplify the movement of employees looking for a change, enough to call it the “turnover tsunami”.
The three waves that fuel the turnover tsunami
Executives will soon have to live with the legacy of how they managed the pandemic. For many, it will mean less than good news: 46% of employees now feel less connected with their company, and 42% say company culture has diminished since the start of the pandemic (just 21% said they are very engaged at work). Executives who neglected to keep their employees' morale up will soon see many of them walk through the door.
The other two drivers of turnover are more familiar, but have also been amplified by the pandemic: better compensation and benefits (35%) and better work/life balance (25%) are the top two reasons why employees would leave their current job (this data comes from research conducted by Toronto-based Achievers Workforce Institute).
"Through the pandemic, some companies have lost mainstays of employee engagement such as focusing on work/life balance, enacting change following employee feedback, driving recognition, and fostering company culture," said Natalie Baumgartner, chief workforce scientist at Achievers. "As remote work becomes a more permanent fixture of our lives even beyond the pandemic, it's important that employers are addressing these areas of concern in an effort to increase engagement and reduce turnover.
The pandemic crisis showed employees what good crisis leadership and a supportive culture looked like, and they will expect the same going forward even when the pandemic dissipates. So how will you retain your talent and ensure it drives your execution?
Answer the questions below to assess if your human capital is powering or hindering your ability to execute.
● Are your managers fully aware of the motivational needs of their team members?
● Is your organization fully able to attract and retain your top talent?
● Are your development, learning, and training programs fully aligned with your business strategy?
● Is knowledge widely shared across the organization?
If you answered “No” at least once, your talent is disrupting your execution and the success of your business strategy is at risk.
Retention is an Executive-level responsibility
There may have been a time when executives could delegate retention and hiring to HR, but this is not the case in 2021: more than ever, CxOs must hold themselves accountable for their talent strategy. Preventing the turnover tsunami in their organizations should be among their top 3 priorities this year.
CxO must be intentional with their human capital all the more as they are actually not very good at it: data collected by Line-of-Sight shows that CEO themselves rate their ability to manage Human Capital lowest among the top 5 success factors that determine execution excellence, with a score of 63 out of 100 for Human Capital vs. 69 on average for all success factors combined (and 75 for Strategic Understanding, for example).
The challenge is compounded for CxO leading high-growth companies: they rate their Human Capital management even lower, with a score of 54. In other words, the leaders who need to hang on to their talent and attract more of it are the least able to do exactly that.
This is what being intentional with Human Capital means for CxO:
1. Rapidly re-engage employees. Use the “platinum rule” and go the extra mile in leading employees the way they want to be led. Show your appreciation for the diversity of talents and behaviors by implementing platforms such as the Predictive Index that highlight every employee’s strengths. Make sure managers and the executive team are self-aware enough to meet employees’ higher expectations for leadership.
2. Listen to employees. Most people have had a tough time through the pandemic and suffered exceptional wear and tear. Run an engagement survey and take immediate action on 1-2 top issues to show you care. The pandemic has re-ordered employees’ priorities: self-fulfillment and personal development are becoming more critical, so encourage open-door exchanges, and provide career counseling and mentorship opportunities to create a supportive environment.
3. Pay attention to how much jobs have changed. In sales, customer support, product development, supply chain, the world is now very different from what it used to be. Reassess job requirements for skills and behaviors, and coach, train or re-assign employees to let them operate in their strike zone, rather than backfilling for the same roles.
4. Keep top performers engaged. high performers are the most susceptible to burnout and therefore voluntary turnover. To help A players feel valued and excited about staying, companies should focus on their career growth, offer stretch exposure and exclusive training, and be more transparent about career progression and compensation.
5. Recognize employees. The Achievers report found that 74 percent of employees want more recognition for their work. Training managers on effective recognition and holding them accountable for recognizing their teams regularly is critical to keeping employees engaged.
How well is your business executing? To find out, please reach out to one of our partners and we will initiate an assessment of your execution capabilities.