IN THIS UNCERTAIN ECONOMY, BUSINESSES STRUGGLING TO HIRE NEED TO PUT THEIR EMPLOYEES’ CAREERS FIRST

New research from McKinsey offers fresh insights for employers straining to fill open positions.

The pandemic changed the labour market. Now employers need to change too.

A year into the Great Resignation, job openings remain elevated near record highs, with 11.3 million unfilled positions as of May — compared to 9.6 million a year earlier. The unemployment rate, meanwhile, has been holding firm at 3.6 percent. Businesses have not adapted to this new reality when it comes to hiring. Employers still rely on “traditional levers to attract and retain people,” according to new research from McKinsey & Company. The management consulting firm argues that this approach will no longer be enough to fill your open positions.

Instead, you should be thinking more long-term about your workforce, according to the study from McKinsey, which found that the most important factor for determining employee retention is career development and advancement. Among people who left their job within the last year, 41 percent cited the lack of internal opportunities as their main motivation for leaving, while 34 percent blamed uncaring and uninspiring leaders.

“It cannot be overstated just how influential a bad boss can be in causing people to leave,” the report says. “While in the past, an attractive salary could keep people in a job despite a bad boss, that is much less true now than it was before the pandemic.”

Still, compensation remains an important factor in employee retention and was the second-most cited reason for quitting.

The labour shortage shows a few signs of relenting, as 40 percent of U.S. workers plan to leave their jobs in the next three to six months, according to McKinsey. As more data comes in, the numbers make it clear that the Great Resignation is really more of a Great Reshuffle. Workers are not just quitting. Two-thirds of people who left their job in the last two years have switched industries entirely.

Amid this realignment, McKinsey advises remaining flexible throughout the hiring process. Individually tailor your offer to the needs of the potential hire. Think outside your industry and expand your purview of what is considered relevant experience. “Companies can no longer assume that they can fill empty slots with workers similar to the ones who just left,” the study said.

 

Originally published on Inc, https://www.inc.com/ali-donaldson/mckinsey-hiring-unemployment-retention.html