By Marissa Geist, CEO
After two and a half years of pandemic-fueled disruption, everyone is looking for the next new normal at work. Though companies and employees are still haggling over return-to-work policies, the see-saw of resignations and layoffs has leveled, the job market has cooled and a recession has yet to materialize. Recruiting teams might feel as if they finally have some breathing room – but don’t be fooled. This temporary lull isn’t our new groove. It's the calm before the chaos.
Job market predictions
In my professional opinion, multiple forces will likely hit simultaneously as the market resurges. Here are my predictions for the job market.
- Backlogged requisitions will flood the market. Putting headcount on hold during economic uncertainty is nothing new, but a multi-year hiring freeze means that open requisitions have been piling up longer than usual. There won’t be anything “quiet” about this next round of hiring. The U.S. already has nearly 10 million unfilled job openings – and that number is sure to surge once suppressed demand is unleashed.
- Turnover will rise as recession fears ease. For the past two years, many employees have opted for the perceived safety of staying put. This “good news” will be reversed by talent’s relentless pursuit of better opportunities: Deloitte research reveals that 60% of employees, 64% of managers and 75% of the C-suite are “seriously considering quitting” for a job that better supports their well-being.
- Seasoned talent will exit as their nest eggs recover. 2022 wasn’t kind to investors: Inflation hit a 40-year high, interest rates spiked and a volatile stock market caused a 20% drop in the average 401(k) balance (per SHRM). As those balances recover and inflation eases, older workers will be back on track to retire.
- AI will challenge and change how we work. The generative AI revolution is as transformative as the tech boom of the '90s, and we’ve only begun to feel its effects. As the impact widens, HR practitioners will need clear-headed strategies for who (or what) will perform which tasks – as well as how, when and where skills are acquired and work is done.
It’s a convergence that promises to be just as disruptive to the world of work as COVID-19 was. The good news? This time, we can sense what’s coming – and we can use our assumptions about the future to adjust our planning and processes today.
5 steps to prepare for what's next
HR leaders can steer their companies toward success by prioritizing the following actions before the next disruption hits.
Amp up your social listening
Merely monitoring social channels is like only catching part of a conversation. To understand what talent wants and expects from your brand, you need to listen to the entire dialog.
Steal a page from marketing’s playbook and segment your audience to identify trending topics among current employees, retirees, competitor talent pools, specific skill communities, etc. – then make those insights actionable by sharing them with your internal teams.
Train leaders to have shockingly honest conversations
If more than half of U.S. employees are looking for another job, why are managers consistently blindsided by two-week notices? Why have we decided it’s corporate taboo to talk with team members about plans to switch companies or retire?
We need to ditch that dysfunctional script before the next disruption hits. It’s time to enable talent to talk openly about their doubts and discontent and to equip managers with proactive retention options rather than leave them scrambling for counteroffers when employees quit.
Maybe a restless top performer would welcome a lateral move to develop new skills. Perhaps a burned-out caregiver could recharge on a sabbatical. Maybe a key people leader who’s eyeing retirement would be open to a flexible schedule while their team completes a strategic initiative. Creating this conversational comfort level won’t happen overnight, and it will be a masterclass in leadership, empathy and trust; but it can deliver a competitive edge heading into a hot recovery.
Simplify how you think about talent
There’s growing consensus among talent experts that skills are becoming the new currency of work. After decades of crafting convoluted org charts and over-engineered job descriptions, it's time to pare back the complexity and look at how people spend their days. Are they on the front lines? Are they negotiating? Building things? Teaching people? Troubleshooting?
Focusing on day-to-day work instead of job titles is sure to reveal some surprising skill patterns among and across the people in your organization – which in turn unlocks opportunities to move internal talent more freely and reimagine how you source external talent.
Recognize new threats
Simplifying your approach to talent exposes a hard truth: In the next recovery, poachers will likely come after your people from all angles. There are builders, teachers, problem-solvers and negotiators in every organization, across every industry. Don’t be caught off-guard when companies ramp up for growth.
Start expanding your competitor watchlist, assess how you measure up against EVPs outside your own vertical and identify the skills that will likely be most critical for driving your organization’s growth.
Stake your claim on generative AI skills
Hiring AI talent in the upswing can be like renovating a house: Plan to double your timeline and triple your cost. Even if you don’t have a clear AI strategy yet, use this “quiet” time in the market to assess your internal resources and craft a plan to bring external AI talent on board.
Keep in mind that consultants can only get you so far when it comes to generative AI; there are no bona fide “experts” yet, so it might be more useful to join a knowledge-sharing network of companies that are in the fray and experimenting with the tools.
The next talent disruption is already on its way. HR leaders can help their companies face the challenges head-on and seize the opportunities they present. As always, the future will belong to those who adapt, innovate and actively shape the evolving world of work.
Originally featured in Forbes.