The State of Organizations 2023 - Flipbook - Page 80
Exhibit 24
There is a direct link between organizational health and financial performance.
2017–22 TSR, by organizational health, %
43
3×
Bottom quartile in
organizational
health
–17
14
Middle quartiles
in organizational
health
Top quartile in
organizational
health
Source: Corporate Performance Analytics by McKinsey; Organizational Health Index by McKinsey, 50 surveys, 2017–22
concrete steps to balance short-term and long-term
needs and manage the talent crunch: value the
employees, fill the gaps, and build a deep bench.
Value the employees
Whether trying to meet the needs of existing
employees or those of potential joiners, a CEO
and other senior leaders must continually review
and sharpen their organization’s employee
value propositions. It’s important to tailor these
propositions for different individuals and types of
workers. The revised employee value propositions
should bring to life the things that targeted worker
cohorts care about: working in a great company (the
organization’s culture, values, societal impact), being
supported by great leadership (support from caring
managers), having a great job (access to coaching,
mentorship, and learning opportunities), and
achieving great rewards (recognition for a job well
done). Business leaders can use advanced analytics
and organizational data to identify the employees at
risk of leaving and develop interventions specific to
the things that the employees care about.
Fill the gaps
To find the people with the skills that organizations
need, business leaders should think twice about
where they are looking for and the criteria that they
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The State of Organizations 2023
are using to screen candidates. As a result of the
COVID-19 crisis, many companies are shifting away
from standard hiring processes toward ones that
are faster and more candidate friendly—for instance,
reducing the time to an offer and giving candidates
the opportunity to interview with both potential
peers and potential managers. In all cases, a CEO
must ensure that equitable hiring practices are in
play. Organizational commitment to DEI should be
reflected in job descriptions; in employee training,
compensation, and benefits; and in advancement
discussions. Organizations will need to monitor and
measure representation at all levels and functions