The Great Talent Reckoning, or the Great Leadership Opportunity?

Business leaders today are facing multiple concurrent and systemic disruptions such as public health crises, racial justice reckonings, extreme political divisiveness and extreme climate events, just to name a few. Understandably, CEOs, board members, and investors have been keeping people at the forefront of conversation. Why, then, are we facing this “Great Talent Reckoning” with more resignations and employee churn than ever before and, more importantly, what can leaders do to address it? 

Anywhere you look today, it is easy to see human capital in flight. The U.S. Bureau of Labor Statistics reported that 4 million Americans quit their jobs in the month of July 2021, one of the highest monthly number of resignations on record. According to the Harvard Business Review, resignations peaked in April 2021 but have stayed abnormally high for the last several months. The numbers for the near term are not much more promising: in a survey of over 30,000 employees across industries, 41% of employees are considering quitting. When considering Gen Z alone, that number leaps to 54%.

These numbers are stark and sobering. The question on so many minds is, "what exactly caused so many people to pursue 'greener pastures' at the same time?" In short, all signs point to leadership. 

Many workers report that they are resigning in hopes for a “fresh start;” many others – over half in several surveys – cite stress and burnout in their current position as their motivation to look elsewhere. Even more are citing concerns with their current leadership’s response at the outset of the pandemic; and others are worried about their physical and mental health. Other reasons cited – especially among younger workers -- is respecting the leadership they have: are their leaders ethical, authentic, and empathic? Do they work for an organization with purpose and a mission to enhance society? Does their leadership and organization take deliberate steps to develop an inclusive and diverse culture?

The common thread weaving these ‘resignation responses’ together is that they are all a reaction to leadership, which goes to show that strategic talent management is more crucial now than ever before. CEOs need to work closely with their talent during this period of disruption, both to help them and to retain them. And ultimately what this may mean for many executives is to lead through this period of disruption by disrupting oneself. 

The Antidote: Transformative Leadership 

In the age of workforce mobility, it is critical to understand what’s most important to your employees and to lead in a way which captures and inspires these four generations currently in the workforce. Leaders must think of their employees in the same way that they think of their customers. You need to listen to what they want, what they need, and what they value. If you don’t, simply put, you will lose them. 

Many of today’s leaders came of age in the ‘command and control’ era – a time when a leader would set the strategy, communication was one-way, and their teams would fall in line. Leading in the future, however, requires a very different outlook and approach.

Leaders today must embrace the tenets of transformative leadership. They must be resilient, adaptable, and have high emotional intelligence (EQ). They must listen, acknowledge, and seek to understand their team’s motivations and challenges. In disruptive times like these, it is crucial to acknowledge the reality of stress and pressure in today’s workplace, and let your employees know “we are all in this together.” If leaders don’t know how to do this, or need to get better, executive coaching is one way to learn the skills necessary to reach their employees. In addition to disrupting oneself, leaders should examine each person on their leadership team – and those they plan to hire – to make sure that they are also resilient, adaptable, and have high EQ.

For a leader to fully embrace transformative leadership, they must embrace the “Four C’s:”

1. Capture:  Leaders must capture the energy and imagination of their employees through their communications and visible actions, the alignment of their behaviors and decisions with their values, and their ability to put the purpose and mission of the organization into their own words 
2. Connect: Leaders need to really listen to their employees, understand their needs and priorities, and not use a one-size-fits-all approach for anything. This is where they need to demonstrate they know how to balance people with profits 
3. Cascade: Through their executive team and the next levels below them, CEOs need to cascade the right behaviors, based on the firm’s values and purpose, so that there is alignment with key decision-makers throughout the organization. These behaviors need to drive an organization system that rewards, selects, develops and recruits in an aligned manner, all driven from the top  
4. Catalyze: CEOs will, by definition, then, need to drive and accelerate the transformation of their organization: reinforcing a new or renewed culture. Their organization will transform – to some degree – and it is through this transformation that an effective antidote to disruption can be realized

To withstand the Great Talent Reckoning, it is crucial for leaders to embrace these steps, be intentional about their culture, and think of their employees as customers. Above all, leaders must understand – and enforce – that culture cannot be created from the top down, but must be built by and with workers of all ages and types.