Looking back at the start of 2020, the US economy was ripe for business. We lived in the ‘good old days’, characterized by low interest rates, low to no inflation and steady, sustainable economic growth. But the ‘good old days’ are over.
According to our research at Vistage, CEO confidence has changed dramatically every quarter for the past two years—with faster peaks and sudden dips than in the seven years prior to the pandemic. Increased inflation, geopolitical conflicts, protracted hiring challenges, supply chain delays and exorbitant oil prices are some of the factors causing US business executives’ confidence to plummet in the second half of 2022. CEOs are beginning to accept disruption as part of their new reality.
Then business leaders are laser-focused on areas they have more control over, such as talent. Whether we enter a recession or are already in a recession, we are not experiencing the job losses that we have traditionally associated with economic downturns. The labor market has consistently exceeded expectations and unemployment has remained at near record lows. The right talent is there, but recruitment and retention remain the biggest challenges. Today’s talent has their role choice – if they’re not happy with their current salary or culture, they can join the Big Upgrade and find a role that better suits their needs.
To tackle recruitment and retention in a meaningful way, it’s important for leaders to understand the modern employee first. As accelerated by the growing dominance of millennials and Gen-Z in the workplace, the modern worker is gaining more power. They are looking for a job that fits their needs as opposed to finding a job that they can fit themselves in. They expect their organization to align with their values, and they want their day-to-day tasks to take on a kind of greater meaning. They are no longer willing to settle for a job where they can’t live the life they want.
As the modern worker expands the workplace, the traditional 9-5 Monday through Friday, the ultimate solution for all workplaces, is dying. CEOs attempting to revive their past mandates for teams that took on hybrid work during the pandemic often encounter resistance. In fact, a recent ADP survey found that two-thirds of the workforce would consider looking for a new job if asked to work full-time in person. More than half (52 percent) said they were willing to make a pay cut to have more flexibility. Most CEOs cannot afford to lose this battle.
Yet this shift brings its own problems for leaders. CEOs report reduced corporate culture and collaboration as a result of remote working. Frontline bosses struggle with managing hybrid teams. CEOs are looking for a panacea to drive the future of flexible work, but finding the right formula for in-person versus home working isn’t prescriptive. Every team within every organization must find what works best for them, and that requires constant trial and error. It’s new territory for all of us. But when used correctly, it represents the potential to unleash the next wave of human productivity.
CEOs who master agility – from offering L&D and retraining programs tailored to managing modern teams, to updating technology to better serve hybrid workers, to redesigning shared office space to better meet needs from personal work, to looking at flexible hours for companies, it can’t increase retention, boost hiring efforts and withstand the headwinds of a volatile and unpredictable economy for years to come. Leaders who create an environment where employees can seamlessly switch between autonomous and collaborative tasks eliminate the need for supervision. Instead, encourage employees to take an active role in determining what level of hybrid makes them most efficient and productive.
The “good old days” may be over or maybe we’re just going into them. By recognizing what employees want and want, we are unlocking a new wave of work where employees come first. Regardless of what the economy does or doesn’t do, with the talent in place, companies will be poised for long-term success.