Why It’s So Hard to Keep and Recruit Employees Right Now

In a webinar I conducted in November 2021, I put the following question to 150 executives from 23 companies in the U.S., Asia, and Europe: “What is the major challenge you are facing right now?” As I watched the comments roll onto the screen, the overwhelming statement was “retaining people.” A close second: “recruiting people.”

I’ve been keeping a journal since March 14, 2020, when it became clear that the pandemic was going to be a life-changing experience. Looking back at my notes, it’s apparent that as people were looking forward in time, this “Great Resignation,” as it’s now being called, was not an outcome they expected.

But should we be surprised by it?

I study the forces that shape work and our attitudes toward it. There are three forces that have been in play since before the pandemic began that help explain why we’re seeing so much turbulence in the workforce now.

First, despite the tragic death rate caused by the coronavirus, people are generally living longer. When we live longer, we focus more on health, so we value healthy work and building resilience. In addition, people are experiencing their life journeys not in the traditional three stages of education, work, then retirement but instead as a multistage voyage. They are hungry for the flexibility to mix and match the stages.

Second, an increasing number of families have two incomes. That boosts the viability of the option to take risks like starting a new business or going back to college.

Third, there has been a subtle but perceptive shift in organizational attitudes from parent/child, where the employee looks to the organization for direction, to adult/adult, where the employee operates with a heightened sense of personal agency.

The combined impact of these three forces is swinging the power pendulum toward employees — who don’t want to just work and then retire, who may start to reject really bad jobs, and who will be paying close attention to what other companies are beginning to offer their workforces.

Looking Toward the Future

Many people used the pandemic as an opportunity to reevaluate their life and work choices. They unlearned some old ways of working and began to build new habits — like spending more time with their families, serving their communities, and avoiding the daily commute.

So, what could happen next, and how might executives best respond?

In the short term, many people are still deeply anxious about the health implications of going back to certain types of work. This extends to low-wage workers, who say their concerns about their mental and physical health are nearly as high as their concerns about covering monthly expenses.

It seems to be as hard to predict the future today as it has been since the start of the pandemic. Still, there are three points that every executive should be considering now, as they think about recruiting and retaining employees:

Employees want a healthy, future-oriented way of working. Companies and leaders must soon realize that when people want more autonomy to live a multistage life, the organizational variable they most treasure is flexibility — flexibility about both where they work and when they work, flexibility to take time off to explore, flexibility to launch a small company or work for a not-for-profit. Part of the move to an adult/adult organizational attitude is that many employees are now exercising their personal agency to advocate for the work lives they want.

Bad jobs are on their way out. By bad jobs, I’m talking about jobs with long hours, low pay, no training, tough bosses, and poor prospects. When unemployment is high, many people have to take such jobs. But as the labor market tightens, people pay more attention to their ideas about what could be, alternative ways of working, and better jobs they could seek out.

Other companies will change the playing field. Right now, there is a huge swell of experimentation going on. Companies are designing talent practices that, for example, enable people to work from anywhere three months a year, or to seldom come into the office, or to bundle their working hours into just three days or string them out over seven.

As always, I’m aware that there could be a “Yahoo moment” at any time — a dramatic scenario in which a CEO decides to close the door on popular ways of working. As companies test new options and try different workplace strategies, we should expect many reversals along the way.

Still, in every sector right now, there are outliers that are pushing at the margins of what they’re willing to do to find and keep talented employees. The practices they adopt — particularly around flexibility — could well become industry standards. When they do, employees all across those sectors will be asking why their own companies aren’t offering the same opportunities. It will be critical to keep abreast of these experiments as they emerge.