Recent ManpowerGroup research has identified a number of workforce trends that are demanding attention from employers; two of which are particularly prevalent in regards to the talent shortage being felt across the globe – shifting demographics and individual choice.
Gen Z are set to make up 27% of the workforce by 2025 – 40% of whom plan to leave their current role within two years. On the flip side, only 19% of hiring managers are actively looking to hire returning retirees, despite calls from the government to get these individuals back into work. And when you combine this with declining birth rates and an aging population, we’re now set for a global worker shortage of 85 million people by 2030 – suggesting a challenging future for talent attraction and retention.
But what are businesses already seeing as a result of these shifting demographics?
Firstly, people’s expectations and what they want from their work has changed. Flexibility and an improved work/life balance have come to the fore, with 64% of the workforce saying they’d consider looking for a new job if they were required to return to the office full-time. Employees are enjoying the autonomy acquired through this new hybrid way of working, and only want to come into the office for specific, collaborative opportunities.
“When they come into the office, they want to come in for specific reasons – to work with other people, to be creative with other people, to really maximise their time with others.”
Sean Penistone, Director, Talent and Succession Management – Kerry Foods
This however presents challenges. In the wake of the pandemic, graduates have shown a keen interest in regularly attending an office to learn from their peers, only to find many of their colleagues work from elsewhere most of the time; while executives are used to having their workforce around them and are now wrestling with a decision: do they initiate a return to the office and risk losing talent, or do they embrace hybrid working and accept the loss of what they’ve always known? In both instances, new and more experienced employees are facing difficulties in navigating a hybrid world.
As a result of this physical disconnect, many younger employees are now joining businesses and not being properly educated on the culture and structure of an organisation. They’re unable to see a clear career path in front of them and are struggling to understand what progression and development opportunities are available – which is undoubtedly contributing to their unwillingness to remain with an employer for longer than a few years.
And despite their struggle to retain Gen Z, many businesses remain reluctant to bring retirees back into the fold; whether that’s because their recruitment strategy has shifted towards targeting younger generations, or they’ve made the misplaced assumption that retired/older workers wouldn’t want to reskill and retrain. Either way, organisations are merely exacerbating the effects of the talent shortage by ignoring a significant percentage of the available talent pool.
“There’s a large number of individuals that we should be trying to attract back into work… and the reality is that if you look at the over 55s, they’re going to be more likely to stay with you because they see this as their last career move, potentially, and of course they’re used to working at organisations for longer.”
Bob Davies, Client Services Director – Talent Solutions RPO
Therefore, in order to get ahead of these trends, business leaders need to focus on engaging both the emerging talent, and the more experienced members of the workforce. It’s only through having open and honest career conversations with both demographics that they can understand what each generation wants from their career moving forward, and how they as an organisation can best utilise and support them.
How does individual choice factor into the talent shortage?
The pandemic has changed the way people think about work. 4 in 10 employees would trade 5% of their salary for a 4-day week, while 31% would change roles in the next month if it offered them a better blend of work and lifestyle – to try and combat the fact that nearly half say they overwork regularly in any given week. Having greater autonomy and flexibility in their working lives has become non-negotiable for many people, and businesses are having to quickly come to terms with this new mindset.
Upon hearing that there will be an expectation to come into the office in some capacity, many individuals may now turn down job opportunities entirely, especially if it doesn’t align with their lifestyle. Whether they’ve moved away from the city, bought themselves a dog or started a family, people are now expecting work to flex around their personal lives, as opposed to vice versa. And businesses who can’t offer this sense of flexibility are having to accept that they will likely miss out on talent.
“People have a different expectation, people’s lives changed during the pandemic… and now there’s a general desire to build working life, to take time out for various things.”
Mary Pender, Global Head of Talent – Abrdn
A big part of wanting to take time out is to avoid burnout, especially where many employees now work from home and find it more difficult to adhere to set hours – logging on slightly earlier or working that little bit later each day. As a result, there is greater focus on wellbeing and how employers can best support their workforce in maintaining a healthy lifestyle. The conversation has changed – employees now see it as being perfectly normal to ask for flexibility in support of their wellbeing, and employers are expected to grant these requests where possible.
Employees want to be seen and treated as human beings first and foremost, and leaders who fail to adhere to this expectation will likely see attrition increase within their workforce. Therefore, a big focus for many businesses moving forward will be on working out how to manage the changing needs of their individual employees, while simultaneously maintaining organisational success.
“How do we humanise and how do we adapt the way in which we operate, the way in which we lead, in order to accommodate the changing needs of the business, but also the changing needs of individuals to retain that talent?”
Sarah Hernon, Principal Consultant – Right Management UK
To hear more from our panel on the workforce trends driving change in businesses, and their thoughts on what will be key to retention in 2023, watch our free webinar.