If I gathered 10 CEOs in a room and asked each their most important asset, I suspect human capital would be in their top three responses. Then, my next question would cause them to pause. How much of your time do you invest in this essential asset in your company? Likely, their investment would not match the relative importance of the asset.
An excellent article in the Nov. 13 edition of the Wall Street Journal titled “Record Quitting Fuels Tight Job Market” describes the impact of the pandemic on the labor market. “The U.S. economy has had more than 10 million open jobs since June, an extraordinary stretch of imbalance in that labor market that also includes a record number of workers quitting their jobs.” Many of you are experiencing this phenomenon, whether you’re a CEO stressing that you can’t fill your human capital requirements, or you’re a laborer who chooses not to work the way you did before the pandemic.
How we work has forever changed. It was slowly evolving as the dot com industries proved the virtual, autonomous environment is fruitful. Now, given the impact of the pandemic, most CEOs recognize that the artificial constraints imposed on labor before — set work hours in a brick-and-mortar office setting — have little effect on their company’s productivity or quality of products and services. Many companies saw vast improvements in output. How can this be? Because the old model advocated the control of labor was reliant on proximity with team members and management and antiquated communication modes. Now, we have face-to-face Zoom meetings hundreds of miles apart with management and distant coworkers while sitting in pajama bottoms in our homes, and we’re still as productive or more productive than when we were in the office setting!
This forced adaptation has jolted the labor market demands and the mindset of the traditional CEO. Acknowledging the shortage of job seekers and how your company will compete for labor is critical to the stability and growth of your business. You must exploit your creative approach for the in-demand and limited labor pool, and thinking wages are their main incentive would be foolish. Start thinking autonomy, flexibility, development, climate, and leadership in addition to competitive salaries are the main motivational drivers. All of these factors appeal singularly or in combination to job seekers, and this is what will get you the human capital you need to sustain and grow your business.
The starting point is how you present your company to the labor market. Too often, we pay little attention to the job announcement, especially members in the C-suite. Your company’s posting hits the marketplace, and it’s full of descriptive words and legalese that describe the work, but very little that attracts a job seeker. There’s no “WHY” or inspirational words that connect the seeker to your organization. Invest the time and develop a job seekers’ marketing campaign with the same intensity as your highest-margin and most sought-after product or service in the marketplace. Inform the job seekers “WHY” they should join your team and make it compelling with action-oriented and value-laden words.
Next, understand first impressions count and the positive ones sprout trust that equate to organizational loyalty. Your onboarding and company indoctrination program must be top-notch if you want to retain the best. Generally, how you treat a new employee when first joining a company correlates with how long they remain. Suppose the leadership team doesn’t invest the time in emotionally connecting with a new member by expressing gratitude for joining the company, especially when labor can choose from so many job openings. In that case, the leadership squanders a critical bonding opportunity, and they’ll pay for it in employee turnover and low retention.
Companies must embrace post-pandemic workforce expectations and not hold onto old work norms that have little impact on productivity. Traditional 8 to 5 workdays in the office setting are gone. When the C-suite informs and establishes work standards for this novel and adaptive environment, labor thrives. They’ve proven they can be more productive when given the autonomy and discretion on how best to perform their work. Accommodating flexible work hours as well as remote workspace is what attracts the post-pandemic labor pool. Compelling them to join and stay requires leaders to tell their employees the value they bring to the company and how they can grow.
Exceptional leaders continually adapt to the changing environment. They also invest their time and resources in those critical assets that determine the success or failure of their business. All too often, though, the human capital factor is underinvested, and companies struggle as a result. These post-pandemic times with widespread industry labor shortages are a wake-up call for leaders to rethink their treatment of the people component of their business. Only offering competitive wages will not solve your labor shortages. Think out of the box, be creative, flexible, compelling, and invest the time required to attract and retain the very best people who create and sustain your success.
This is how you lead, think, plan, and act! Now, let’s get after it.
Retired Col. Paul A. Raggio is co-owner, with his sister Lisa, of One True North INC Leadership and Business Coaching Solutions. Paul and Lisa mentor and coach business owners on leadership and management principles in achieving and sustaining their business growth and profitability goals. He can be reached at [email protected].