This Week in Leadership (July 19 - July 25)
What the Delta variant means for office returns. Solving the labor shortage with returnships. Plus, tips for how to be a great board director.
No one can predict the future, but that doesn’t mean you can’t try. And offer some surprises along the way.
For 2020, that may include just how much employees will share each other’s salaries to put pressure on leaders, and the greater freedom managers throughout organizations will be expected to give their troops. All over, tenures at the top—about 15 percent of CEOs now leave every year—are growing shorter and putting pressuring on firms to line up better succession plans. Put simply, “we will see an even greater focus on transparency, agility, culture and purpose-driven leadership,” says Byrne Mulrooney, the chief executive officer of Korn Ferry RPO, Professional Search and Korn Ferry Digital.
Here’s ten big trends Korn Ferry sees as the new year starts.
Lead with a purpose
In the not-so-distant past, it was the boss’s job to set the strategy and tightly control an employee’s ability to get something done. Now, leaders are increasingly creating an agile and adaptable culture where teams trust each other and understand the purpose of the work: “why” we exist, who we are as an organization, and what we stand for.
In a way, corporate leaders are adapting to what their employees say they will make them feel engaged. In a recent Korn Ferry survey, 59% of professionals said their personal principal driver at work is the belief that their work has purpose and meaning, and 71% of them said that they worked at their organization primarily for reasons other than compensation. “Without embracing the purpose of an organization—the motivating force of why it is so important that we exist—employees will become disenchanted,” says Kevin Cashman, Korn Ferry’s global leaderof CEO and executive development.
Purpose-driven leadership isn’t just good for the individual—in many cases its critical for the bottom-line. An overwhelming 96% of respondents said that companies see a long-term financial benefit when they make a strong commitment to purpose-driven leadership.
Everyone knows what you’re paid
Asking “How much do you make?” used to be taboo, but a growing number of professionals have no qualms talking about pay. About one quarter of professionals surveyed tell Korn Ferry that it’s OK to share their own salary information with colleagues. More importantly, 37% believe it’s more acceptable to talk about pay now than it was five years ago.
Pay transparency is getting a boost around the world, too. More than 80 countries have passed equal-pay-for-equal-work legislation. And of those countries, more than a quarter have a mandatory reporting requirement. There is also a much more concerted effort to make executive salaries transparent, with the CEO pay ratio ruling in effect in the U.S. and the Shareholder Rights Directive set to impact the European Union in 2020.
Three quarters of HR professionals surveyed by Korn Ferry say transparency on pay and rewards will become even more important in the coming year. HR and pay teams are strategizing on how to create equitable pay programs, more clearly articulate the principles behind those programs, and help managerscommunicate with employees who may feel they are undercompensated. “If employees don’t believe that compensation practices are equitable, this data suggests that they will leave their organization or, worse, stay but be less engaged and productive,” says Korn Ferry Senior Client Partner Tom McMullen.
Diversity and inclusion are important, really
Companies have thrown hundreds of millions of dollars toward programs to diversify their workforces and leadership pipelines across genders, races, and nationalities. Plus, there’s an overwhelming understanding that having diverse voices in the room can help with corporate decision-making, engagement and employee retention. The result of these efforts, however, aren’t great, especially at the upper echelons. An overwhelming amount of leadership positions are held by white men. And the non-white men who have gotten to the top feel they had to either work far longer or take considerably bigger career risks to get to leadership positions.
More organizations are addressing structural inclusion, looking for ways conscious and unconscious biases have been embedded into the talent systems themselves. “Organizations need to address the structural issues that are keeping bias alive, including pay parity, role expectations and high-potential talent criteria that favor one group over another,” says Andrés Tapia, a Korn Ferry global diversity and inclusion strategist.
No more across the board hiring and pay bumps.…
Unemployment may be at historic lows in the United States and elsewhere, but don’t expect companies to be hiring en masse. Hiring for roles that have a direct impact on the bottom line, such as R&D and sales, is being prioritized over traditional service roles like accounting. At the same time, companies are becoming more reluctant to give across-the-board cost-of-living increases. Salaries after inflation will be higher in 2020 than they were in 2019, but only because inflation has fallen in many parts of the world.
Firms are using discretionary incentives, such as bonuses, to reward top performance. For everyone else, companies are hoping that additional benefits and career development programs can make employees feel engaged.
…unless you are really good
Big paydays are going to people with the tech skills to help firms with digital transformation. Indeed, many companies are hiring people who have niche technical skills, even if they don’t have an immediate role available for them. As organizations figure out their digital strategies, they increasingly want people immersed in the skills on hand. More than three-quarters (77%) tell Korn Ferry that they are hiring for roles today that didn’t even exist a year ago.
Firms may not be throwing money at other top candidates, but they’re using other innovative methods to bring them into the fold. They’re reducing the number of actual interviews before a hiring decision is made, inviting them to events to show off the company’s culture. Experts say the trick to becoming an employer of choice is to be authentic and transparent.
Got a question about a job? AI will answer.
While some worry that AI may take their job, companies are increasingly turning to it to let candidates know about jobs.
AI programs are often quicker and more efficient at telling candidates where they stand in the process, help them navigate career sites, schedule interviews and give advice. HR professionals say AI is significantly transforming the candidate experience, potentially enhancing engagement and elevating overall satisfaction.
On the flip side, there’s a nascent movement to use AI to help figure out when existing employees will quit. These so-called “predictive attrition” programs then suggest what managers should do to engage with the employees, although some worry that these programs, if designed or used improperly, could exacerbate turnover rather than reduce it.
Reskilling for the future.
Even at full employment many workers worry about how long their job is going to last. Talent professionals are recommending that people, even those who have a job, look to sharpen their skill sets. But instead of sending people back to school, more organizations are helping their employees sharpen their skills while still on the job.
Organizations have also made reskilling existing employees a key initiative, as they know many of the skills that are critical today may be irrelevant tomorrow. In a recent Korn Ferry survey, 27% of HR professionals say reskilling workers is their top priority. Firms are hoping improving both worker hard skills, such as programming or data analysis, and soft-skills, such as learning agility and organizational awareness, will help its workers be ready for the jobs of tomorrow (and maybe convince more of them to stick around).
Although reskilling workers is important, it’s not enough. Companies today are moving away from one-time change initiatives and toward a culture of continuous transformation. More than people development, companies are redesigning their jobs and structures for more agility and scalability.
Experts say that any time leaders make a strategic change that requires people to do things differently, they need to closely examine how those changes impact company culture and amend as necessary. If this doesn’t happen, reskilled people who go back to their old jobs and culture could create a recipe for failure.
Rise of the “career nomad.”
How work is changing is on the minds of talent professionals, but so is how workers themselves are changing. Indeed, there’s an increasing amount of employees who actually want to make walking out the door a major part of their career. These “career nomads” are high-performing talented pros who have no qualms switching jobs, organizations and even careers. Millennials, people born between 1982 and 2000 and now the largest part of the US workforce, seem particularly disinterested in staying put.
Talent is expensive to replace, so firms are increasingly aiming to keep these job hoppers happy by laying out career paths, helping them constantly upgrade their skills, or offering flexible work schedules. Some firms may want to just avoid candidates who say they have no intention of sticking around, but experts say firms may miss out on top talent if they ignore nomads.
More CEOs and board directors to leave
The average CEO tenure at corporations around the world is less than eight years, which means that 15% of chiefs are leaving every year. About one in five of those CEOs likely will be forced out, and increasingly it’s not because the boss was missing financial targets, but because the CEO’s ethics or personal behavior was questioned. Experts say that if those factors aren’t a wake-up call to improve succession planning, then nothing will.
In addition, approximately, 25% of public board directors are older than 70, and sooner or later they are going to be replaced. Many companies are trying to use the transition to bring younger and more diverse voices into the boardroom. They’re being pressured by both investment groups and governments to do a better job faster.