Capital is flowing into Europe and North America as organisations reopen and poise themselves for growth. European tech looks set to rival Silicon Valley thanks to renewed interest from venture capital heavyweights, and buy-in from private equity investors is letting companies in the West transform at rates not seen for half a decade. 

These trends will inevitably have consequences for finance teams, whose challenge for 2022 will be to ensure that wages keep up with inflation: leaders now are waiting to see the extent of price increases and proposed changes to the minimum wage, but employees can expect wage freezes to thaw in the near future.

Less discussed will be the impact on HR teams, now pushed to retain top talent with meaningful incentives at the back end of pandemic-era austerity. Surging demand has created common problems across the economy, with pressure for services – and therefore staff – driving the number of opportunities to work elsewhere. But leaving one sinking ship for another saves nobody. We need to look at what’s sinking them.

Decision-makers still do not know what staff want, and the disconnect between employers and employees has organisations putting out fires that don’t exist and ignoring the ones that do

The problem of incentives

The root of this problem goes much deeper than a sudden spike in demand for labour. employees can feel more secure in leaving a bad job knowing another will be waiting for them when they want it. But the Great Reshuffle will go on indefinitely until leaders understand its cause.

Money is not the point. Signing bonuses and wage raises were not enough to hold onto the 4.5 million who left their jobs in the US last November. Leaders must indeed show a genuine commitment to making the lives of their staff sustainable (which extends to increasing pay in line with inflation) but this will also have implications for a more radical rethink of day-to-day best practice. 

Decision-makers still do not know what staff want, and the disconnect between employers and employees has organisations putting out fires that don’t exist and ignoring the ones that do.

Hubris is the key flaw that stops good leaders from being great. The inability to consult and to listen to diverse perspectives is what corrupts the hope of sustained success as the landscape of business evolves. 

Of course, this has been exaggerated over the last two years as the experiences of workers has become more and more distorted by varied living conditions; where the office guaranteed some consistency in the experiences of staff, the pandemic has heightened the importance of listening to individual concerns around mental and physical health, childcare and family obligations, and communication.

No wonder, then, that staff now see their leaders as several steps removed from the problems of ordinary people. No wonder so many would jump at the opportunity to hop from company to company in the hope of finding a better fit, while the space exists. This unspoken frustration points back to an epidemic of management that no longer understands how to be truly inclusive of its staff.

Adaptation and sustainability

A good idea is not a good idea forever. And pre-pandemic solutions may no longer cut it in the new world. Where 86% of leaders see themselves as role models, 82% of staff find their managers “fundamentally uninspiring”. 

To resolve this conflict of communication and to lead more effectively, senior staff need to start listening, surveying, having more calls with staff and giving more opportunities to air complex individual concerns in person. Diversity of experience is resolved with flexibility and transparency, and the scatter-shot approach to incentivising staff to stay must become a thing of the past.

High employee turnover today comes as the result of years of not being heard by those with the power to make top level changes

The companies that prospered through the pandemic did not all have pandemic policies in place in March 2020. They were those that were able to leverage the resources available to them to adapt their business model and to help staff transition into new, productive and meaningful roles. 

Open lines of communication

Staff understand that challenges – and sometimes pandemics – crop up. The role of leaders is not always to avoid them but to mitigate them through open dialogue with those affected.

High employee turnover today comes as the result of years of not being heard by those with the power to make top level changes. Leaders are, of course, bound by inflation, policy and a changing job market. But so long as we have the power to listen, to stay humble and to learn from those around us, we can always create a healthier environment in which to work. 

It is this openness to change, this openness to learning from all those we interact with, that so crucially separates sustainable businesses from everybody else.

Interested in this topic? Read Equality diversity and inclusion: Why HR needs to take centre stage.

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