Mid-Year 2022 Outlook: Aligning Your Talent Strategy to Market Realities

As organizations across the United States enter Summer 2022, they confront a market for skills and talent that is unlike anything that business executives and leaders have experienced. Even as the COVID-19 pandemic recedes, geopolitical tensions both exacerbate existing challenges, and create a range of new scenarios that affect how organizations should think about recruiting, engaging, retaining and growing the talent needed to deliver on strategy.

Through thousands of corporate client relationships, we gather feedback and direction to help us align our programs and offerings. These unique relationships with our corporate clients provide us with insights into the current demands of teams and organizations. The following five key areas of focus is what we’re currently hearing. I will also break down some critical tasks for each as you plan for the remainder of the year and beyond.

During the second phase of the pandemic, a range of factors, including  no advancement opportunities, child care issues and lack of flexibility caused the nation’s “quit rate” to reach a 20-year high last November. And now, sustained inflation – particularly in key skill areas – is putting significant budgetary pressure on organizations to retain talent without being able to pass costs fully on to customers. And while the looming specter of a potential recession may cool demand for “labor” more broadly, the chronic supply/demand imbalance in key skill areas will almost certainly persist.

With the current geopolitical landscape, organizations are taking stock on several key areas of risk. The most obvious is the need for more rigorous cybersecurity and information management risk management, which requires additional people and teams in an already tight cyber labor market. In addition, organizations are dealing with the possibility of moving key technology work back onshore, as conflict disrupts offshore operations and increased “tech and data nationalism” makes it more challenging to move data around the world.

Perhaps the most lasting legacy of the pandemic will be the radical transformation of consumer and business behaviors through sudden, rapid adoption of digital tools and processes. Almost every facet of basic commercial activity has been reshaped – from telemedicine, to touchless commerce, to digital supply chain management. In the process, the very nature of work and skills has also been changed – with need for both newer technology skills (e.g. hybrid cloud administration) and a broader need for tech-literate leaders and teams. In particular, leadership teams will need to confront three new realities:

Across the past three years, we have seen a remarkable shared commitment by organizations across industries to create a more diverse, equitable and inclusive leadership team and workforce. Driven by data like McKinsey’s Diversity Wins report, which states “companies in the top quartile of gender diversity on executive teams were 25 percent more likely to experience above-average profitability,” organizations have launched programmatic efforts – often backed by public targets and compensation plans – to create diverse teams at all levels. The challenge now confronting leaders is how to meet these goals without relying entirely on a narrow pool of “known” candidate sources.

Setting aside the oversimplified “return or remote” media debate, the pandemic has changed the very nature of how people and teams get work done. The most obvious change is that all organizations will continue to use collaborative and remote technologies substantially more than in the past. But organizations will also need to consider how they engage a more diverse organization through a deeper connection to purpose. Against this backdrop, the role of the manager/leader looks wildly different than just a few years ago.