In a macro-economic environment that is dominated by uncertainty, organizations need to refocus on the fundamental pillars of managing a people organization and acknowledge that many of these pillars are interconnected. While this increases the complexity of the job, a company that is effective at attracting the right talent, retaining that talent, and fostering a sustainable working life for employees will develop the resilience to survive and thrive.
Companies with resilience have the ability to bounce back during volatility, the agility to bounce forward and seize opportunities for growth, and the engagement and belonging with employees to repeat this process.
Businesses and their people are facing multiple pressures today.
The business environment has been particularly volatile. We jumped from an economy that was languishing to one that was overheated with a shortage of labor and high inflation. Global interest rate hikes are now stoking fears of an imminent recession.
Here are the biggest pressures we hear from organizations:
1. Rising employee costs and attrition require broader thinking than just increasing pay
By August 2022, voluntary turnover globally reached 15.4 percent, according to Aon’s Salary Increase and Turnover Study. This is even more acute in high-demand sectors such as technology companies, where voluntary turnover has increased by 40 percent, with two-thirds of employees admitting they are “looking” for alternative opportunities.
The root causes of increasing turnover include:
want better pay
want better career opportunities
lack of viable career opportunities
The initial response to high attrition was to counter offers, causing a spike in salary increases (and worsening inflation). In the same study, respondents said average salary increases were as high as 39 percent in the same in-demand sectors and roles.
The Great Resignation resulted in unsustainable increases in the cost base, causing 71 percent of companies to consider total rewards as an alternative approach to increasing pay to mitigate attrition.
Consider a more holistic total rewards program that goes beyond pay?
Jump to section “Measuring workforce resilience provides clarity and confidence to take the right actions” to learn more.