How to Have a Successful Business in the 2020s
Learn how mid-sized firms have key advantages to drive growth in a time of uncertainty and opportunity.
For many companies, 2022 presents an opportunity to grow their business with new customers, new sales channels, and new markets. But one of the greatest challenges they face in achieving rapid growth is attracting, motivating, and retaining skilled employees.
Achieving employee satisfaction may prove key to achieving a company’s full growth potential. According to the U.S. Chamber of Commerce’s most recent Middle Market Business Index, 68% of executives surveyed said they expect revenues to increase in the first six months of 2022. Similarly, 62% of respondents forecast that their net earnings would also accelerate through the first two quarters of the year—despite concerns about inflation and persistent supply chain challenges.
To translate that optimism into reality, leaders must attract and keep talent. But the intense competition for talent during the labor exodus being called the Great Resignation, with 3% of the total U.S. workforce leaving their jobs in December 2021 alone, is real and expected to continue.
The Harvard Business Review described the talent dilemma faced by middle-market companies at the end of 2021 as a simmering crisis. "The middle market has a voracious appetite for talent because it grows faster, on average, than the rest of the economy," the HBR article said. "While companies of all sizes are struggling to keep and find people during the Great Resignation, it’s hitting the middle market especially hard—and middle-market companies often find themselves with an inadequate toolkit to address the problem."
In a survey of middle-market company executives released early in 2022, the human resources consulting company AchieveNext found that hiring, training, and keeping employees was the top challenge faced by company leaders. A particular issue: retaining employees with technical skills. Only 7% of respondents said that it was easy to keep high-demand technical workers on the payroll.
Size as an Advantage
In its recently released Future of Work report, the recruitment and consulting firm Korn Ferry noted just how much the dynamics around attracting and retaining workers have changed as a result of COVID-19. "Employees are now starting to ask very human questions about the work they perform. Why am I doing this? What is it for? How can we do it better?" the report said. "Attraction and retention used to be a numbers game. 2022 calls for a much more human approach. Organizations should consider all the levers they have available to them for building and strengthening relationships with individual talent."
Small and mid-sized companies have inherent advantages when it comes to forging the personal relationships that so many employees seek today. For example, leaders and managers should use the fact that they have smaller staffs to promote mentoring opportunities and access to a company’s top executives. That means institutionalizing mentoring programs by encouraging and facilitating mentor-mentee pairings and making it easy to set aside time for people to meet.
Another way leaders of mid-sized companies can take advantage of their size is by taking a personal role in developing and monitoring the career progression of their employees. A survey of 2,000 employees at medium and large companies conducted last fall by the people management platform Lattice explored the reasons so many workers are dissatisfied with their jobs and looking for new opportunities. Some 54% of respondents said they were actively looking to change jobs.
About one-fourth of those surveyed said a lack of mentorship was fueling their job restlessness. A nearly equal amount cited a lack of clarity about their career progression as a reason to look for new opportunities.
Potential ways to bolster career path transparency include collaborating with employees to develop a growth plan. The plan should include specific timelines and objectives and be revisited routinely to track progress and celebrate (with or without a financial reward) when workers reach goals.
Hybrid Work and Flexibility
During the many variants of COVID-19, work flexibility morphed from a perk to a necessity. Pollster Gallup reported that 45% of full-time employees in the U.S. worked at home at least part of the time. Nine out of 10 workers surveyed by Gallup also said they wanted to continue working from home at least a few days a week after the pandemic ends.
Figuring out ways to simultaneously provide flexibility about when and where employees do their work and effectively managing hybrid teams is a challenge leaders must navigate quickly. LinkedIn’s 2022 Global Talent Trends report found that the employee desire for flexibility in their working arrangements is intense.
There's a reason for the emphasis on flexibility. According to LinkedIn’s report, employees are 2.6 times more likely to be happy in their jobs and 2.1 times more likely to recommend their employer to others if they feel as though they have sufficient flexibility to determine their work times and locations. Among members of so-called Generation Z, the people born between 1997 and 2012, company posts that mention the term "flexibility" get 77% more engagement than average posts.
A Hybrid Workforce Demands a Different Leadership Approach
The demand for flexibility has profound implications for company leaders. Allowing all workers to do their jobs from home isn’t a practical answer for all companies, not just those (like restaurants and retailers) who need employees to be physically present. What’s far more likely—and preferable to employees—are jobs that mix work that can be done in the home and in offices. Recent research by Gallup revealed that about 60% of workers want a hybrid model, with the majority preferring two to three days per week in the office.
In its 2022 Global Talent Trends report, LinkedIn lays out the challenges of shifting to a hybrid work environment and provides insights about how to manage it effectively. "Establishing an effective hybrid workforce requires careful planning to ensure that remote employees remain productive, feel connected to their coworkers, and are treated equitably," it said.
Among the measures companies should consider to maintain employee satisfaction:
- Bolster remote work leadership skills. As more employees spend an increasing amount of time working from home, managers need to adjust their approach to maintain worker morale and productivity. The challenges for both workers and managers are significant, and were outlined in this recent article, How to Be a Good Leader for Remote Employees. When employees are working at home, it’s especially important to be transparent about productivity expectations and to deliver frequent feedback. Instead of adopting a consistent management philosophy, leaders also need to customize their approach to take into account employee personalities, as well as the work environment they have at home—including their child care responsibilities.
- Pay special attention to culture. The natural bonding and camaraderie that takes place within office walls can be inconsistent when teams are hybrid. To consistently reinforce important social connections, LinkedIn suggests holding routine virtual events that everybody can join. These can feature guest speakers or opportunities to socialize with colleagues that create a shared non-work experience for employees.
- Train your managers. With so much focus on keeping workers, it’s helpful to understand why people quit and the role managers play in retention. A recent study published in MIT Sloan Management Review revealed that a toxic corporate culture was the main reason employees left their jobs. "The best thing you can do for managers in 2022 is to develop them for the environment they face," Gallup said. "Few were properly trained for managing a hybrid workplace. Most don’t know how to capitalize on employees’ strengths, much less coach them. And when a member of their team is hurting—through burnout, illness, family conflicts, or a lack of skills—the manager hurts too."
One of the main takeaways from recent years is that disruption and uncertainty will continue to impact how companies recruit and retain workers. What won’t change is the importance of talent in the success of any company, especially mid-sized companies. Labor shortages and changing expectations among employees mean that business leaders who want a thriving company should give top priority to how they and their organizations engage with employees. For additional information, contact your Relationship Manager or Find a Banker to learn more.