For the last century, companies have heavily relied on their physical office as the hub to attract and retain talent: through the things happening in the building (office layout, wellbeing spaces, any kind of benefit you would provide in situ), and/or the environment surrounding the office (e.g. close proximity to mountains or sea, warm climate, big cities with cultural activities).
If the things taking place in the office are to a large extent replicable, the surroundings of the geographical location are not. How do you copy the Rocky Mountains, sunny beaches, 300 rain-free days per year, the charming ambiance of the narrow streets of Montmartre in Paris, the emulation of Silicon Valley? As long as working was associated with a physical space and location within an office, the battle for talent was clearly under control and only required a company to establish itself in your location with all the investments –and bells and whistles– associated with it.
If you as a manager or company were comfortable with this situation and wishing it would last forever: TOO BAD...the party is over!
COVID busted location as a USP
During COVID, employees experienced working from home, and most of the myths (loss of productivity, distancing from the company culture, lack of alignment, loss of sense of purpose), simply vanished. The fact that workers managed to rebalance their priorities and use the flexibility to work close to relatives has now led to a situation where 80% of the employees want to work from home, or in any case not in the office, for at least for 3 days per week. Many even prefer a schedule not based on days but blocks of weeks: 3 anywhere - 1 in the office. This means that 70% of the working time occurs out of the office. Yep. This is happening. Now. Not science-fiction.
The most agile and distributed companies jumped the gun and have started offering fully flexible working frameworks to employees all over the world: I don’t really care “where” you are, as long as the “what” is delivered and the “how” is “somewhat respected”. The main barrier to access some talent pools has thereby disappeared. As "asynchronicity" is becoming more and more the norm and time zones have evaporated, you can now work from the Riviera for a Silicon Valley startup, or from your home village close to your parents while working for a company in Australia.
In the Tech world this is nothing new for companies which are distributed by DNA (Atlassian, Gitlab, etc.). However, for most, even amongst the most innovative ones, (see Apple’s last week of tension with its employees), the "dematerialization" of the office blew up the traditional paradigm and dynamics of talent attraction and retention.
Companies which were dominant in certain geographical areas by the mere fact of being established in that area have to rebuild their entire sourcing strategy because their value proposition is no longer relevant in the decision making matrix of the employees.
Among highly skilled groups, attrition is skyrocketing, almost doubling for certain scarce skills. Exit interviews show that "hard dollars" are just a qualifier. We all use the same salary ranges and know quite precisely what the market pays for each role, for each industry. Offer & demand is now giving more power to employees of these high skilled groups, and they are collectively and informally setting what are the conditions of satisfaction, the trends and the new rules of the game.
To convince someone to join your company, “soft dollars” are more important than ever, and flexibility to choose your when and where you work has become the gold standard. All those who, at one point in time, had to make the hard choice between living in their hometown and having a career have now a unique opportunity to combine both. We now small companies poaching dream potentials from far more prestigious brands, basing their employee value proposition on their working frameworks of total flexibility.
The new deal
Consequently, if the office and everything you were offering there, from gyms to yoga and painting classes are no longer relevant, what other “non-replicables” are you left with to differentiate yourself as an attractive employer?
First thing that comes to mind is culture. We include into it the talent practices, management practices, mentorship, diversity and inclusion policies and, more and more important Wellbeing.
However, if 70% of the working time occurs out of the office you need to review the entire employee life cycle in order to successfully export the Culture at home or anywhere the employee is working from. For that you need to train your managers to shift their focus into new things: from managing resources to managing context, environment, personal well being, and work/life balance. In the last 30 years we had managers transforming from boss to mentor, and now we ask them to evolve into enabling coaches. While capacity to deliver was the most valuable “currency” in the 70s, today it is all about generating trust.
The physical space of the office was enabling certain personal circumstances or conditions which are now differentiated at home, so managers need to reintroduce those personal circumstances in the framework and take them into account while dealing with a team. The overused “empathy” skill is no longer a conceptual one, but one of the main assets we will require from our leaders. How do we support them?
To add complexity, there is a generational element into the preferences of the employees at the time to choose their Hybrid model. While we see the social life of the more senior being office centric, the youngest ones value the presence at the office more for mentorship and collaboration than to ensure social connection.
These are just tiny examples.
Recruitment focus, competency frameworks, onboarding processes, communication channels, talent development policies, social connection, collaboration tools, comp&ben policies, proximity bias avoidance, team dynamics, off-boarding, sense of belonging and purpose, emotional and contextual support of the employee WFH: it all needs to be reviewed.
In the war for talent the choice is clear: there is no choice. You can stay as you are and be only the prey of your competitors, or you can push the reset button and also be a predator (I acknowledge this is an awful and commonplace metaphor).
The war for talent...not my problem!?
Those believing that this is a trend only affecting the top tech companies are fooling themselves. Today we are all tech! Every company is digitalising, using data scientists and cybersecurity experts.
In the automotive industry, General Motors has announced recently it will recruit thousands of engineers remotely to work on the development of its future electric vehicles. So, as German and French carmakers, you should start ring-fencing your best engineers before GM goes for them. Many pharma companies are shifting permanently to a hybrid model, and opening remote jobs from anywhere, specially in the R&D field. Again, European pharmas, you should lock-down and hide your researchers, scientists and physicians because biotechs are going after them big time.
Lately several research papers (ie Manpower Group, Korn Ferry) have found a global shortage of a half a million software engineers. As most of the trends occurring in the tech sector are a good indicator of what is going to happen in other industries we need to monitor and prepare for a talentpool tsunami.
If you are not one of those companies exposed to talent war, don’t worry, you can’t hide either. You will be indirectly affected, whether you like it or not.
The war for talent is not a matter of quantity. There are tons of unskilled or with the “wrong” skills workers. Most of the companies are fighting for the same scarce group of skills. Dramatic technological and operational disruptions are happening at such a pace that schools and universities cannot adapt the content of their education fast enough to deliver to the corporation's needs. The short-sighted answer to this until now has been to find new locations, if possible “low cost”, (we all hate that word but let's call a cat a cat) to establish offices and exploit the talent pool there: Bangalore, Hyderabad, Manilla, Warsaw, Prague, Kiev, Istanbul, Sofia, Bogotá, San José etc… However, as soon as one company moved into a new location many others were following very quickly, saturating the talent market. Therefore the basic dynamics of offer / demand have the salaries going up, the location is soon no longer a “low cost” one and you need to find a new “low cost” place: a never ending story. An that is not taking into account the problems of cultural integration and alignment.
Now the “new reality” (hey, it seems no good article can afford not to mention this new reality thing) is that the dematerialization of the office offers an opportunity to the most powerful, but also the most agile companies: Work From Anywhere means Poach From Everywhere.
So, how can we surf the tsunami?
These are only the early signals. Who knows the long term ones? We see the first macroeconomic effects of the trend. Only in the US lumber were price skyrocketing, oil price fluctuating, real estate collapsing in certain cities and exploding in some other rural ones. Redistribution of demographics and economic re-dynamization of rural areas, positive environmental impact, natality… name it, who can anticipate anything?
Don't swim against the tideIn my opinion, there is no use in swimming against the tide. Doing so we would not be talking about resistance to change, but about negation of reality.
As we don’t know what we don’t know and we can’t control what is not under our influence, let’s start to untangle the nods which are closer to us: small steps & small wins.
So, as a company, as a manager, as an employee: will you lead or follow the Hybrid Reset?