The State of Organizations 2023 - Flipbook - Page 16
CHAPTER 1: TEN DEEP DIVES
New rules of
attraction, retention,
and attrition
People are revising their attitudes both to work
and at work.
W
hat’s changing?
“Is there anybody out there?”
It’s a question that senior
leaders around the world
are asking as they try to fill
open positions while keeping existing employees
on board and engaged. In the wake of the COVID-19
pandemic and the accompanying “Great Attrition,”
human capital is scarcer than it’s ever been. Despite
recently announced layoffs in some sectors, in
the United States, for example, there are 1.8 job
openings for every hire, according to the US Bureau
of Labor Statistics.
According to McKinsey research conducted between
2021 and 2022, 33 percent of employees across
nine countries in Europe, 40 percent of employees
in the United States, 45 percent of employees in the
Middle East, and 60 percent of employees in India
were planning to leave their jobs. But our State of
the Organization survey showed that most surveyed
employers in those countries erroneously believed
that less than 20 percent of their workforce were
planning to leave. And relatively few employers have
acknowledged or found ways to reengage the “quiet
quitters”—a spectrum of employees who are doing
less than they had done previously, ranging from
those who fulfill their defined job descriptions but
don’t do anything more to those actively destroying
value by doing nothing.
Many employees are redrawing the boundaries
between their work and personal lives. Some have
left jobs to take on very different roles. Others are
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leaving the workforce entirely. We have found that
what employees want from work—for instance,
flexible hours, remote work, opportunities to
advance, tasks that have purpose and meaning, and
adequate compensation—can vary significantly,
depending on age group, life stage, work
experience, and other factors.
In this changed environment, the question for senior
leaders to ask is, “What do we need to do differently
to attract and retain top talent?”
The benefits of getting it right
Recent research from the McKinsey Global Institute
underscores the critical importance of attracting and
retaining talent: companies that successfully develop
people and manage them well (organizations we refer
to as “people and performance winners”) gain a longterm performance edge (Exhibit 9). The following are
among the key findings:
— Organizational capital. Companies that
successfully build human capital—about one
in ten in the data set for the study—have more
consistent earnings than sector peers do and
greater resilience during crisis. They are also
better at retaining talent, with attrition rates
that are about five percentage points lower than
those of peers.
— Dual success. Some organizations prioritize
talent development and manage to deliver
top-tier profitability at the same time. These
companies are more likely to become large-
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