I’ve seen a few downturns in my time. They usually come with tough decisions, not least when it comes to people.
Many leaders will be balancing the need to retain talent in their business with the need to cut costs. Redundancies are never an easy choice to make. Aside from the human impact, they can have a toxic effect on morale for the people left behind, and you lose vital knowledge and skills, making it harder to return to growth later.
Occasionally, someone else’s loss can be your gain – if your bottom line is robust enough, you can hoover up some of the talent they had to discard.
But what if those people who aren’t so lucky to get a good new job don’t just hang around waiting for the recovery? What if they leave the sector, creating a talent vacuum?
This is already happening in some sectors. Nearly one in ten nurses left the profession in the UK over the last year, with a third saying they often think about leaving, even as the NHS faces critical staff shortages.
Hospitality meanwhile has never fully recovered from the staff exodus caused by the 2020-21 Covid lockdowns.
Recruitment drives can only go so far, at best replacing skilled and experienced personnel with fresh graduates. That’s because the challenge extends more broadly, to the macroeconomic level.
Leaders may talk privately – mostly – about the impact of Brexit on the labour market. But let’s not forget that half a million people have also left the workforce since the start of the pandemic due to long term sickness.
Millions more are now working from home much of the time, which has many benefits. But for those entering the workforce for the first time, how much less are they learning ‘on the job’, and what is this doing to the talent base across sectors?
Last but not least, there are the twin trends towards automation and business models based on cheap(ish) plentiful labour, often under poor conditions. A proliferation of zero hours and gig work may or may not be good work for people who want a certain level of flexibility, but taken as a whole it’s not a pathway to productivity gains.
The business response
These systemic challenges, which affect some sectors more than others, are clearly beyond the power of any one employer to solve. But they do affect us all, one way or another.
It is not enough to shrug your shoulders and look only at your own talent retention strategy. Instead, it’s time we started looking at talent supply at an ecosystem level, as a common resource to be nurtured rather than simply exploited.
This could be by working with industry groups, NGOs and government to address talent gaps in sectors and communities, strategically.
Or it could be by investing in local talent unilaterally out of enlightened self-interest. Germany’s Mittelstand companies famously see it as their social responsibility to invest in apprenticeships, for the good of the community as much as for the firm.
Yes, the person you trained might leave, but with their new skills they are at least more likely to remain in the sector and/or local area. And indeed, they may continue to benefit you: seeing employees off with a smile and good wishes can pay off in terms of employer reputation and in ‘boomerang’ staff returning with new skills and perspectives.
Ultimately, talent is like oxygen: it is the responsibility of business to replenish, not deplete it or burn it out of the atmosphere. Whatever strategy we take to develop and retain it, we certainly shouldn’t take for granted that there will always be a plentiful supply.