The single most crucial factor for business success is the engagement level of your workforce. Engagement creates energy, which is required for your crew to create a winning strategy, execute plans skillfully, and grow profits. If employees aren’t highly engaged, your organization is in trouble. On the other hand, if a high-performance culture supports your team, your company will outperform the competition.
Navigating a Competitive Labor Market
Today’s business environment has changed radically because of the pandemic. One of the most meaningful transformations is the unprecedented shift in the employee-driven labor market. Talent has the upper hand in choosing the place of work, compensation, benefits, and work hours. The U.S. has nearly 11 million job openings, which is 3x higher than the average over the past 20 years. Companies can’t hire enough employees to fill vacancies, and employers are working harder than ever to recruit and retain talent.
Many business leaders and economists projected that the labor shortage would subside when the pandemic unemployment assistance programs ended, and people returned to work in droves. But that hasn’t been the case. The unemployment rate has returned to its pre-pandemic level and stands at 4%. Economists equate this to full employment, as unemployment is inevitable in a free market economy.
Being at full employment with a record number of job openings means that the worker-tilted balance in the labor market is here to stay — at least for the foreseeable future. That is arguably great news for the economy and society (presenting an opportunity for considerable improvements in the quality of life and a long-overdue shrinkage of the income gap and wealth distribution). Still, it poses a significant challenge for employers. Unless a dramatic event slows down the economy soon, CEOs and their leadership teams must navigate the organizational and financial implications of the most favorable labor market in recent history.
Managing Employees During a War for Talent
The ease of use and surge in popularity of job search engines and professional networking platforms requires employers to rethink retention and employee engagement strategies. The right approach for CEOs and their leadership teams is to implement strategies that engage their employees at the highest level. Here are some Do’s and Don’ts to help you pivot in the red-hot job market and plan for 2022 and beyond.
1. Don’t Micromanage
Nothing makes an employee feel more stifled than a boss who’s constantly looking over their shoulder. When someone is continuously checking in, the message becomes one of distrust in performance and time management. On the converse, employees who experience trust and autonomy feel valued by their employer, which creates an environment of safety and can release neurochemicals such as dopamine, serotonin, and oxytocin, which help reduce anxiety and increase happiness. Without micromanagement, employees experience a greater sense of engagement, trust, freedom, and satisfaction.
2. Do Communicate Expectations
Every employee must know the precise performance and cultural standards expected of them. The key performance indicators (KPIs) that the worker must deliver should be measured, tracked over time, and compared to the organizational goals. KPIs are an easy way to communicate expectations and assign metrics for tracking and reaching expected results. When hiring, be specific about which performance indicators an employee is responsible for and be explicit that the KPI is measured numerically. Being transparent about results-oriented performance expectations may help you find top talent more quickly and drive engagement for recent hires.
3. Do Be Accountable
Accountability is a two-way street. Employers need to hold themselves to the same standard of accountability that they expect of employees. Anyone serving as a people manager must ask themselves, “What results are my employees expecting me to deliver?” Employees expect transparency and accountability from their leaders. For example, a startup CEO must share who will fund the company until it is profitable and how much more they need to raise to be covered. In contrast, the CEO of an established firm must share how the company will solve a compliance issue to satisfy legal commitments and remain faithful to the company’s values. When your employees realize that you are accountable to them, they gain trust, a sense of security, emotional safety, and confidence about the company’s future.
4. Don’t Overwork Your Teams
Following two years of emotional distress, isolation, and anxiety from the pandemic, employers should pay acute attention to work-life balance. Coupled with the “Great Resignation,” many employees are working more now than ever. Companies must actively train employees in time management. Managers must also model work-life balance and set clear boundaries with their teams. For example, they may establish policies that deter “after-hours” emails, meetings, and deadlines at night and on the weekends. Burnout leads to disengagement 100% of the time and encourages employees to search for new opportunities.
5. Do Schedule Regular Check-ins
All employees should have monthly one-to-ones with their managers, with a goal of open, transparent, and honest conversations. No topics are off the table. Managers who are skilled at listening can quickly assess employee engagement levels. New hires need frequent check-ins, and weekly 30-minute meetings are a best practice during the first three months. Employees who have passed the probationary period should have biweekly 45-minute sessions. For employees who have been with the firm for at least six months, a monthly hourlong conversation allows for more in-depth dialogue. These sessions can be powerful catalysts for change by creating a safe space for employees to articulate challenges, successes, opportunities, and changes they’d like to see. Managers don’t need to come into these sessions with all the answers. The goal is active listening and creating a space for open dialogue. Employees who feel heard by their managers are more likely to feel valued and engaged in their work. The famous saying is often true, “People quit their bosses, not their companies.” This easy-to-implement practice of checking in creates a safe environment to boost workforce engagement at every org chart level.
6. Don’t Overlook Executive Bonuses
Engagement rises in upper management when the company provides financial rewards based on the business's overall success. Starting a new firm is easier than ever, and your top talent will be bombarded with attractive offers to partner with other entrepreneurs and create a new business. Therefore, it is essential to provide financial rewards to all C-suite executives and division, department, and branch heads.
7. Do Share Company Vision
The CEO should also operate as the Chief Visionary Officer, designing the company vision, clearly sharing it with all employees, and welcoming feedback. A quarterly session for the CEO to share the strategy is healthy. Companies should invite employees to a quarterly roundtable discussion with teammates, led by a facilitator, to gather collective feedback and wisdom. At this session, team managers should ask questions, listen, take notes, and help clarify the CEO's vision. This practice has an enormous impact on workforce engagement.
We're kicking off a new year with an unprecedented leadership model to drive employee engagement. Adopting these seven practices should help CEOs succeed in the challenging new labor environment.