Relatable Organizations Hold the Key to Success in a Tight Labor Market, According to Mercer’s 2022 Global Talent Trends Study
Mercer, a global leader in redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being, and a business of Marsh McLennan (NYSE: MMC), today released its 2022 Global Talent Trends Study, “The Rise of the Relatable Organization.”
According to the Study, four in five C-suite executives believe the people and business agendas have never been more intertwined, making it crucial for companies to be more open and easier to relate to. Listening intently to their stakeholders, using data to uncover patterns and guide action, and speaking out on issues that matter will help employees who have the privilege of choice decide which organization(s) they want to spend time with. Drawing on insights from nearly 11,000 C-suite executives, HR leaders and employees, the Study identifies trends to build a relatable organization in a heightened risk environment.
“Organizations now have a moment of profound opportunity to pick up the tools of empathy honed during the pandemic – balanced with economics – and carve a new way of partnering that is more relatable, and ultimately more sustainable,” said Kate Bravery, report author and Global Leader of Advisory Solutions & Insights, Mercer.
“A fundamental change in people’s values is underpinning a structural shift in the labor market. There is now increased pressure for organizations to contribute to society in a way that reflects the values of their customers, employees and investors. The challenge is making progress here, whilst grappling with inflationary pressures, pivoting to new crises and tackling differing views on the future of work,” Bravery added.
Five trends for 2022: What relatable organizations are getting right
1. Reset for relevance
Staying relevant means adapting to changing values of customers, employees and investors. This demands a reset of priorities and a new work operating model that is adaptable, connects people to work more seamlessly, and re-envisions the talent experience. Organizations that walk the talk on their core values – through company purpose, work standards, and investment strategies – will better relate with their stakeholders and be better positioned to deliver business outcomes. The challenge is embracing a new work operating model with enough adaptive capacity to enable workers across the organization to make value-driven decisions day to day.
- After job security, organizational brand and reputation is now the #2 reason that people joined their current employer (a jump from #9 before the pandemic).
- Employees want to work for companies that reflect their personal values. 96% of employees expect their employer to pursue a sustainability agenda that balances financial results with social issues, diversity/equity, and environmental impact.
- The need to be more nuanced and personalized in how we respond to changing sentiment – requires new organizational skills of listening, learning and adapting to identify and address unmet needs. Yet, only 55% of employees say their company is meeting all their needs.
"In ever more competitive talent markets, organizations are increasingly focused on being an employer of choice by truly addressing stakeholder needs - and by getting work right, under good work standards," says Melissa Swift, US Transformation Leader, Mercer. “Organizations are working daily to balance profit and purpose, and paying attention to the 'how' of work.”
2. Work in partnership
The Study shows that people no longer want to work for a company, they want to work with a company. Nearly all executives (96%) say we are in an employee-centric labor market and 70% of HR professionals are predicting higher than normal turnover this year – most notably with regard to younger workers and those in the digital space. Working in partnership means reassessing the employee-employer relationship. Relatable organizations see the value in ‘partnering’ over ‘leading’ and are doing this by evolving their return-to-work strategies into sustainable future-of-work models.
Bravery added, “The future of work will succeed only if everyone feels they are getting a fair deal and benefiting from an equitable relationship between employer and individual regardless of employment status and the type of work they do. Today, it is not only knowledge workers who are demanding flexible options to fit around their life, but all workers — from shop floor workers to truck drivers. Leaders are also grappling with issues of fairness with what is offered to frontline workers versus managers with pay for people doing the same job from different locations, and with career and health parity for new hires versus current employees.”
- Nearly all HR leaders (90%) think there is more work to be done to build a trusting culture at their company, particularly as many consider shifting to a hybrid working model. Yet, only 30% of executives see the ROI of building a healthy, resilient and equitable future of work.
- More than half (62%) of employees would join a company only if they can work remotely or in a hybrid engagement, and 74% believe their organization will be more successful with remote working and/or hybrid. By contrast, the majority of Executives (72%) are concerned about the impact of remote working on the organizational culture, as 75% say they have an apprenticeship culture today where people learn side by side, not remote – requiring a redesign of learning.
- Gig working remains a favored strategy for the C-suite, with six in ten executives expecting that gig workers will substantially replace full-time employees at their company in the next three years. But with fewer than 6 in 10 full-time employees open to gig working, more needs to be done to make this a viable, attractive and secure option for employees.
“Relatable organizations are embracing new work models (talent in flexible, no longer fixed roles, agile ways of working, human/automation optimization) and different ways of engaging talent in work (gig, variable/seasonal, shared, part- time, full-time), but so far fewer than one in five companies are reviewing their gig working terms and benefits,” said Ravin Jesuthasan, Global Leader for Transformation Services, Mercer. “Ensuring that all relationships across the talent ecosystem are fully supported to be active parts of the organizational culture will be critical to embracing a new work operating system and delivering on the goal of sustained agility.”
3. Deliver on total well-being
The pandemic exposed and worsened the health and wealth gaps for different populations, underscoring that accessibility and affordability of care is not enough. Shifting the focus from reducing health-related costs to optimizing investment so that people remain healthy and engaged is key to people sustainability.
- A staggering 81% of employees feel at risk of burnout this year (up from an already concerning 63% in 2020).They say the top reason for burnout is not feeling sufficiently rewarded for their efforts. Employee well-being is perceived by executives as the people initiative that will deliver the second greatest ROI in the next two years (after reskilling).
- Good mental health has always been part of overall well-being, but businesses are doing more to help employees achieve it. Over one-third (36%) of companies are introducing a strategy to address mental or emotional well-being this year.
- Across all demographics, financial worries have increased, with half (51%) of employees saying they feel insecure about their financial future.
“We are living in a moment where decades of ever-increasing employee stress have built to a labor-crisis fever pitch – and these findings show quite clearly that companies could be doing so much more to create a lived experience of work that truly meets the needs of a highly diverse workforce,” said Swift.
4. Build for employability
The pandemic supercharged companies’ race to reskill, but in many cases reskilling initiatives became divorced from the organization’s future strategy. Resetting the skills agenda to meet both current and future talent needs will ensure people are, and remain, employable. Skills-based models are enabling organizations to deploy talent more flexibly and tap into broader and more diverse talent pools – already a priority for one in three organizations.
- Nearly all (91%) employees reported recently learning a new skill, yet a staggering 98% of companies report significant skill gaps in their organization. Transparency on which skills are most needed can help employees maintain their own employability and focus their own learning efforts on the skills that will drive the company’s growth.
- HR’s top reskilling concern is that reskilled/upskilled talent will leave the company. One way to address the issue is to offer more opportunities for employees to use their newly acquired skills. Close to 90% of companies already have or plan to adopt an AI-powered internal talent marketplace platform to facilitate movement.
- In 2019, 25% of employees said they intend to stop working completely at retirement age; this year, the number is down to 16%. In response, 39% of companies enable employees to adapt retirement benefits to their personal circumstances and 38% are proactively offering older workers different employment options, including phased retirement.
“As skills become the currency of work, there is an imperative to rethink how work gets done and how skills are made visible. Relatable organizations don’t just know the potential of their people across their talent ecosystem, but are using AI and technology to know what careers they could have tomorrow,” Jesuthasan added.
5. Harness collective energy
The pandemic accelerated the adoption of new technologies, business models and modern ways of working. Experiencing this level of change in a compressed timeline, on top of fatigue caused by those events, has taken a toll. The percentage of employees who report feeling energized has dropped significantly — from 74% in 2019 to 63% this year, the lowest level in this Study’s seven-year history. But at the same time, employees are more optimistic about what the future holds: when asked to describe the future of work, the top response (51%) is that they expect it to be more balanced, with more time for family, hobbies, health and learning.
Nearly all companies (97%) are planning enterprise-wide transformation this year, but employee fatigue is cited as the number one barrier to delivering on that transformation in the eyes of all three stakeholders. Employees also cite organizational complexity as a critical barrier. As we transform, it will be critical to rethink the employee experience with an eye towards energy as 65% of Executives believe that as they have automated HR processes, they have lost valuable contact between HR and the business.
“With energy levels at critically low levels, there is a collective fatigue that is impacting productivity,” says Bravery. “Technology is both a contributor and a savior. Enhancing digital adoption, improving the communication of strategic vision, and addressing organizational complexity will be key. This requires a rescripting of the work experience through the lens of life experience and redesigning HR based on the desired target interactions with the new personas occupying our workplaces and workspaces,” Bravery added.
About the 2022 Global Talent Trends Study
The seventh edition of Mercer’s Global Talent Trends Study brings together the voices of nearly 11,000 C-suite executives, HR leaders and employees representing 16 geographies and 13 industries. Read the report.
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 83,000 colleagues and annual revenue of nearly $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.
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