How your business can retain workers as the talent squeeze gets worse

Warren Buffett said to be “fearful when others are greedy, and greedy when others are fearful”. We live in interesting times, where there are relentless negative headlines around an upcoming recession, seemingly unending interest rate rises and untamed inflation.

If you’re an entrepreneur or scale-up in that exciting phase of growing a business, it can be very easy to take these predictions of the future at face value. But Warren Buffet made a living calling that bluff.

When questioned on why he is raising rates, the head of the Reserve Bank of Australia, Philip Lowe, will be very quick to point out he is doing so because the economy is doing very well. At the time of writing, retail spending remains incredibly high, and our unemployment figure is very low. As business leaders, we need to see the big picture.

After all, we’ll never see the headline ‘economy still booming, but may calm down to more normal levels soon’.

Here’s a very real way of describing the challenge for businesses in the current economy: Compono is the technology partner of the Australian Retailers Association Talent Registry, which gives it a unique level of insight into one of the most economically sensitive sectors. Right now, it will come as no surprise to anyone that our data shows that retail companies are getting significantly fewer applicants today in comparison to Compono’s data from this time last year. With the holiday season on the horizon, we would normally see a huge peak in demand here.

As we can tell from the low national unemployment rate, this isn’t a co-ordinated strike of young workers. Far more likely is that many more are being snapped up in internship programs and other opportunities before they even consider working retail this holiday season.

Our data from other sectors shows that this is the case — many more businesses are looking to shore up their talent needs much further in advance. 

The talent squeeze is about to get worse before it gets better. The ability to quickly sort talent and respond to job applications can often be the critical factor.

If you’re taking two weeks to get back to respondents on a position, as we commonly see in retail, the chances are the candidate has already been snapped up. 

For office and field-based workforces, retaining that talent will become the central challenge in the months ahead.

This means keeping remote and hybrid workforces in particular engaged throughout the holiday season, which pre-pandemic was always a hotspot for many to reconsider the direction of their careers.

This will often mean reviewing an often-overlooked aspect of the working regimen: the way we measure success. The traditional office was home to ‘control and KPIs’. The assumption was that work must be done in a certain way and that specific measurements would define your value. In a world where remote work erodes control and gives workers so much more freedom, we must consider changing the model to ‘trust and OKRs’ (objectives and key results) to minimise attrition in the new year.

The OKR model recognises that a ‘good day’s work’ can be a far more open-ended question than the previous KPI model gave room for. By focusing on the end-goal and giving workers more creative freedom on how they get there, businesses can both reap the benefits of that creativity while giving workers the one thing they often crave — more control over their workdays. It’s a rare win-win, and will help give workers something to look forward to in the new year.