Sick of hearing about the “Great Resignation” but not sure what to do?
Talk about this unfolding scenario has been playing like a broken record since mid-2021… but many businesses still haven’t developed sufficient tactics to deal with its implications.
Leadership development could be a key part of the solution…
Unpacking the cliché
So, what’s really behind the cliché that is the Great Resignation?
Well, there’s been a fundamental shift in the talent market and people have adjusted their sights around what’s important. No longer is remuneration the only primary driver – sure, it’s a key part of the equation but it’s only one part of the complex matrix that comprises what people now value in the employment relationship.
Employee engagement is a massive element behind individuals seeking a change:
An Australian Context
Although behind the post-COVID curve of the US and Europe, Australia is rapidly playing catch up. The drivers behind the Great Resignation are now playing out here in Australia.
We are close to full employment. Wage pressures are emerging. The talent pool is under pressure given immigration has been stifled and the Baby Boomers are heading towards retirement. People are also very open to changing jobs.
According to ABS and EQ Economics, almost 800,000 Australians are expecting to resign during 2022 reinforcing that labour force turnover has started to rise in the past year (see charts above).
The economic statistics also tell us that the unemployment rate is currently at or around 50 years lows and a further 180,000 employees are expected to retire from the workforce in the next 12 months. This is contributing to wage pressures as part of a broader inflationary environment.
All up, a very challenging equation for mid-market businesses seeking to attract and retain quality talent.
What to do?
To attract and retain talent, business owners and CEOs need to act now and develop their employee value proposition into a more complete package that addresses more than the typical base remuneration and bonus equation. It’s no longer just enough to meet the market on salary – ensuring employees are engaged is critical.
The current environment demands new approaches to understand what is valued by the talent market – and what motivates people. Here’s where employee engagement becomes critical.
What drives employee engagement?
The chart below illustrates that whilst remuneration is important, other non-cash components have a higher impact on employee engagement in the short term and also provide long lasting impacts over an 18-24 month period:
Best-selling author, Dan Pink, takes this further in his book “Drive: The Surprising Truth About What Motivates Us”1 where he summarises findings of studies that have repeatedly proven that there are three factors that lead to better performance:
Pink goes further in stating that, when you are dealing with higher order jobs that involve greater complexity, simply paying employees more as the primary or sole motivator often leads to poorer performance.
The underlined section above sounds like all leadership roles, right?
Given this, there must be a focus on autonomy, mastery and purpose for all employees – particularly those in leadership and other key roles. This requires investment from businesses to ensure the capability and competency levels are sufficient for individuals to operate autonomously and develop mastery over their roles.
Leadership development is a critical solution
From a business owner and CEO’s perspective, leadership development programs provide a valuable lever to enhance the opportunity for autonomy and mastery in the workplace. As a result, it provides a mechanism to increase employee engagement and provide a non-monetary reward that supplements base salary and differentiates the employee value proposition.
This in turn provides a powerful engagement tool that leads to stronger employee retention results and importantly, drives better performance helping deliver tangible business outcomes.
The equation is simple: Invest in leadership development as part of the solution to engage your talent, drive performance and generate return on investment (ROI). Further to this, the ROI for leadership development will be greatly magnified for those companies where strategy and purpose are clearly articulated, communicated and understood by the team.
To learn more about how an effective well-structured and run leadership development program can benefit your business, take a look at our Leadership Development Services page or download our Leadership Development Framework.
Alternatively, feel free to drop us an email, give us a call, or book a consultation with our MD.
Notes:
Leadership DevelopmentPerformance Improvement
Accessing & retaining talent is becoming increasingly difficult, so it’s essential that businesses invest in developing their own capability. Without the right management and leadership skills, businesses struggle to build a strong employee value proposition, retain valuable employees, and ensure that their workforce is as effective and efficient as possible.
2min Read
Leadership DevelopmentPerformance Improvement
Corporate governance in Australia is a growing piece of the business landscape, with more emphasis being placed on how business leaders and boards need to …
3min Read
Leadership development in a peer group setting can be a powerful tool for business owners looking to cultivate the skills of their managers and emerging leaders
2min Read