They say that life is short. But in fact, it is the longest thing that any person will ever experience. Every aspect of our existence falls under the category of life, and every single thing we do makes up for the whole of it. Regardless, it always seems that no amount of time will ever suffice. Life moves at such a swift pace that we never even notice it scrambling right in front of us, and we always assume that we are always out of time. Likewise, businesses also operate in a very similar manner. And because businesses are merely by products of our creative ingenuity, we usually associate them with the pace at which we perceive our own lives—unpredictably fast. Moreover, to help them meet their goals and trajectories, companies often invest heavily in their hiring management and processes in order to obtain the assets that they feel will fit their environment the best. In short, companies will always prioritize honing their people and placing their trust in them. And thus, the cycle of quick, unending momentum for businesses begins, and whether businesses fall short of keeping their prized talent in this fast-paced world depends largely on how optimistic one chooses to be.
To give you a better idea, recent market shocks and geopolitical unrest have caused mid-market companies to become increasingly accustomed to anticipating the unexpected and making plans for it. Despite ongoing economic uncertainty, data from Grant Thornton’s most recent International Business Report (IBR) shows that optimism among business leaders remains relatively buoyant. As they entered 2023, 59% of mid-market firms were optimistic about the year ahead, only 6% lower than the figures six months previously.
The modern world is riddled with socioeconomic challenges, and business owners are not safe from these threats. While economic development is sluggish and inflation and interest rates are high in many countries, employment rates are nevertheless high, which means that skilled employees are still in short supply. Hence, to attract and retain talent and satisfy their clients in the face of these challenges, businesses will need to invest more in their people strategies. A successful business will depend on how its leaders develop and invest in their workforce throughout this time. Good leaders know that they need the right teams in place to do this, and how they develop and invest in their people during this period will be crucial to overall commercial success. Nevertheless, here are a few suggestions for improving talent and employee retention.
A competitive market for talent
Fierce competition for talent is a notable concern for most businesses, and the lack of skilled people continues to be a major barrier. According to Grant Thornton’s most recent International Business Report (IBR), labour costs also remain a concern. With more than half (55%) of mid-market business leaders identifying this as a barrier to business growth. Although down a few points from the highs of 59% in 2022, concerns about labour costs are still outstripping pre-pandemic levels, which averaged at 45% in 2019. However, for businesses seeking to cut costs, lowering employment might not be the most appealing choice. A record number of businesses cite availability of skilled workers as a key constraint to growing their businesses (57%). Leaders will need to take a very broad perspective in how they address these challenges, so that they avoid being understaffed when economic uncertainty subsides, and demand expands.
The struggle between pay and inflation
Another obstacle to people management is the struggle for pay. Coupled with rising inflation rates, it has become increasingly difficult for businesses to keep up with the growth in wages.
In the Philippine context, for example, the inflation rate has affected various economic sectors, such as travel and hospitality, financial services, and healthcare. According to a recent article by McKinsey & Company, one of the major challenges that the country faces is a high inflation rate. The article further mentioned that increased healthcare wages, which are in short supply both locally and globally, are a big factor in inflation. It also discusses how healthcare employees are likely to leave the field at a high rate, placing pressure on service providers and possibly lowering the standard of healthcare here in the Philippines.
Grant Thornton’s IBR also shows that average private sector wages had grown by 7%, while public sector earnings were up 5.6%—the highest growth rate in 20 years but still significantly behind inflation. Globally, four in every five mid-market businesses (82%) intend to give pay raises this year. Nevertheless, given persistently high levels of inflation and additional costs, there is a limit to what businesses can afford through pay rises, with only 24% of businesses indicating they intend to offer ‘real increases’ over the next 12 months. Therefore, finding value outside of money will be crucial to keeping talent. Many businesses are seeking alternative strategies to differentiate themselves as desirable employers as they struggle to compete for salaries. Global business plans to offer wage increases or compensation increases that are higher than inflation.
Diversifying talent: propelling business into the future
Another contributor to people management is the talent diversification enriched within the company environment. With skills in short supply, many firms are aiming to be more creative and inclusive in where they look for the talent they need, to make the most of all the skills available. Organizations can access fresh, untapped talent pools by actively seeking out applicants from varied backgrounds. Indeed, diverse organizations are more creative and innovative because they draw from a greater range of perspectives and experiences, which enables them to come up with fresh solutions to the problems they encounter.
Embracing technology to create better jobs
Due to their often modest pricing and user-friendly interfaces, AI platforms like Chat GPT and Google's Bard, which are accessible to most businesses, may present chances for businesses to enhance efficiency while also innovating to create more desirable jobs and occupations.
No matter what we do, we always want more. But in fact, we should focus less on looking towards the future and more on the people around us and the present journey that will take us there. In doing so, maybe we can think less of how life can be short and more of how life can be absolutely abundant.
As published in The Manila Times, dated 19 July 2023
