Gazing out over the future, what do you see?
Do you see mass unemployment and an opportunity to drive down standards, salaries and benefits on the back of the easy pickings that is a downtrodden pool of desperate people? Does 2021 also afford you the opportunity to depress the working conditions of current employees?
Or, do you see a future of increased competition for human resources and a need to be best-in-class in order to attract and retain the best talent? Best-in-class in terms of standards, employee benefits, working conditions and, probably more importantly, corporate purpose?
With 2021 likely to be something of a transition year (pre-Covid to post-Covid) then your lens on this future will determine your ability to recruit the best people.
There’s little doubt that most sectors are undergoing massive amounts of disruption and that an ability (or otherwise) to innovate will be a key component of greatness or mediocrity, success or failure.
Some of that innovation will come from startups and/or new entrants into your sector and there’s plenty of capital available to enable that innovation. According to McKinsey, “PE firms are sitting on almost $1.5 trillion of “dry powder”—unallocated capital that’s ready to be invested”. Some innovation will also come from today’s direct competitors. Some from other established businesses moving into your space.
Without access to the best talent, how will you achieve the required innovation? Innovations around digitalisation, AI, supply chains that move from just in time to just in time plus (‘plus’ being ‘just in case’) are just three examples of the seismic change afoot. Without the best talent, how can you meet shareholder expectations?
So, what does “best-in-class” look like that will enable you to attract the best talent (beyond the obvious measures of salary and benefits)?
A company needs to reflect the society in which they operate. With 75% of the UK workforce to be made up of millennials by 2025, that means (primarily) meeting their expectations. Deloitte’s Millennial Survey of 2016 highlighted companies having a ‘purpose’ (beyond making a profit) as a key driver of millennial loyalty – both as a consumer and as an employee.
The good news is that Jim Collins (Built to Last: Successful Habits of Visionary Companies) had already shown that ‘visionary companies’ outperformed the general stock market by a factor of 15x. A ‘visionary company’ being one with a ‘purpose’ and ‘core values’. Having a fundamental reason for existence beyond just making money (a ‘purpose’) is good for both business performance as well as for attracting talent.
Equally, gender equality, ethnic diversity and inclusion are important social issues that align with improved business performance. McKinsey’s latest diversity study shows “that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile”. That figure rises to 36 percent for ethnic diversity.
Sustainability, CSR, mental wellbeing of employees, maintaining (even improving) health and safety standards should all be pillars in the foundations of what a great company is built upon. They will also help attract talent and drive business performance. They may even already form a part of your ‘purpose’ in which case you will already know about it and be operating to enable it.
Of course, some businesses may already be in dire straits and unable to see beyond the red ink all over the balance sheet. There is a social contract that must not be violated and leadership mustn’t sacrifice people to further their own interests. Where this isn’t happening and the business is genuinely distressed, then employees should work with leadership in the spirit of that social contract and figure out a solution that supports the survival of the business while putting in place a path to greatness based on the foundations described above.
Yes, 2021 will be a transitional year but one defined by the optics through which you view the future, both personally and as a business. At least personally we can choose those optics.If You Like This Post, Please Share It!