Talent Retention and Supply Chain Issues in 2022
In hindsight, a CEO’s incessant quest for a “return-to-normal” business environment now seems odd. Today’s global economy is unforgiving to the leaders who are unwilling to take remedial action in response to significant market disruptions. Clearly, applying a legacy status-quo mindset is unwise.
Furthermore, long before the COVID-19 pandemic erupted, some enterprise employers already had concerns about their declining employee engagement. And, a few policymakers warned that moving essential manufacturing to the lowest-cost foreign provider was very risky.
Regardless, it appears that “common sense” risk appraisals were relatively uncommon.
Global Pandemic Ongoing Impact Assessment
Executives are now very concerned about their ability to deliver substantive value propositions that satisfy employees, and a subsequent inability to retain and recruit talent, according to Gartner’s latest ‘Emerging Risks Monitor’ report.
Talent risks topped pandemic-related concerns, including supply chain disruptions and inflationary pressures, according to the survey of 254 senior executives across industry and geography, conducted in the fourth quarter of 2021.
“Talent risks are particularly concerning to executives because they are being driven by multiple root causes,” said Matt Shinkman, vice president at Gartner. “High levels of voluntary unemployment and new expectations among the workforce are fueling an already hot labor market.”
Organizations continue to struggle with questions related to a timeline for returning employees to the office and developing new working models — including flexible remote and hybrid work — to satisfy their discerning workforce.
Gartner has concluded that the potential consequences of an inadequate talent strategy this year could lead to multiple organizational disruptions. Really, is anyone truly surprised by these survey findings?
A historically high quits rate indicates that employees are willing to pursue better value propositions, particularly related to flexibility and pay. Constant turnover can lead to a degradation of workplace culture and loss of institutional knowledge.
Finally, organizations may also face a lack of skilled workers to deliver on strategic initiatives, such as digital transformation, if unable to attract and retain the most skilled high potential employees.
“The positive aspect of talent risk is that organizations have more direct ability to influence positive outcomes than many other types of risks they face,” said Shinkman.
By focusing on innovating their workforce management of hybrid and remote workers, offering employees more flexibility when possible, and expanding their recruitment approaches, Gartner analysts believe organizations can develop a competitive talent strategy that meets the challenges of the moment.
Moreover, supply chain disruptions have been a persistent concern for executives over recent quarters. Executives continue to express concerns about rising costs and supplier contraction because of a fragile and stressed global supply chain.
They also face loss of market share to competitors with more robust distribution or the ability to procure goods at lower prices. “Persistent supply chain issues have helped push broader inflationary concerns to the forefront of executives’ minds,” Shinkman said.
Justification for Raised Leadership Expectations
According to the Gartner assessment, a constrained supply is meeting heightened demand in many sectors, threatening organizations with a loss of labor, goods and materials to competitors willing to pay a higher price.
Gartner cautions, if above-trend inflationary pressures persist, market share consolidation by the largest firms, as well as the threat of a broader economic cooldown, could become tangible risks in 2022.
That said, from a senior executive and enterprise board member perspective, I’m somewhat puzzled by these survey findings. What were they thinking when they performed their last corporate risk appraisal?
Originally published at https://blog.geoactivegroup.com on February 21, 2022.