How many HR leaders and professionals have had to hold back an eyeroll when they hear their CEO say that people are the company’s most valuable asset – yet talent management never seems to make it onto the CEO’s list of top priorities? While C-suite commitments to supporting talent often ring hollow to their HR teams, the tide may be turning as concerns around attracting and retaining talent continue to rise on CEOs’ list of priorities.
New findings from DDI’s Global Leadership Forecast 2023 revealed CEOs are more concerned than ever about talent. For the first time in more than two decades, talent concerns took up the top three spots for what’s keeping CEOs up at night, outranking other economic and business challenges. CEOs reported their top three concerns were:
- Attracting and retaining top talent
- Developing the next generation of leaders
- Maintaining an engaged workforce
Amid a rapidly changing economic climate, 54 percent of companies saw their turnover increase in the past year. Thus, CEOs are keenly aware that their greatest risk is not having talented leaders who can quickly adapt to new challenges and drive growth in their organizations. This heightened awareness of talent management catapults HR into the spotlight to develop key strategies to drive retention, engagement and growth.
In line with this research, there are three critical steps CEOs and their HR partners can take to combat these concerns:
1. Build a strong leadership bench
One of the most concerning trends over the past decade has been the shortage of leaders to fill critical roles. This year, only 12 percent of organizations said they have a strong bench to fill critical leadership roles.
While very few organizations are getting this right, companies building a strong leadership bench are reporting significant business benefits. Our research shows companies with strong benches are:
- Six times more likely to be capable of engaging and retaining top talent.
- Five times more capable of preventing employee burnout.
- Three times more likely to be among top financial performing organizations in their industry compared to those with weak benches.
Leaders in these high-performing cultures also rated their company’s overall leadership quality 10 times higher than in companies with lower bench strength. Two ways to proactively achieve a strong, diverse pipeline of leaders are to constantly plan for future talent needs and identify high-potential candidates for leadership roles earlier. Often, the greatest source of untapped leadership potential is at the lowest levels of an organization. Leaders should consider leveraging digital assessments to identify this talent and provide them with the opportunities to develop their careers.
2. Make trust a top priority
As people grow weary of constant change, trust can quickly begin to erode. Less than half (46 percent) of leaders report that they trust their direct manager to do what’s right. Worse, only 32 percent say they trust their senior leaders. These statistics match Edelman’s latest trust index findings, which proves trust in leaders has plummeted, although expectations of businesses to do what’s right has risen.
In general, older leaders tend to be more cynical; 45 percent of workers under 30 say their managers maintain high trust and confidentiality, while only 31 percent over age 40 say the same. It’s likely that as older leaders have climbed the ranks, they’ve gotten closer to decision-makers and been disappointed in the process.
Of course, the challenge in building trust at an organizational level is that it’s hard to build and easy to break. Our research identified seven behaviors leaders need to practice consistently to build trust:
- Listen and respond with empathy.
- Provide opportunities for team members’ growth and development.
- Share thoughts and rationale for decisions.
- Genuinely acknowledge your own failures.
- Inquire and care about employee well-being.
- Encourage others to challenge old ways of doing things.
- Recognize the success of team members.
3. Encourage a sense of purpose from the C-suite
Too often, leaders overlook the importance of purpose in their success. But purpose can be a powerful tool to engage employees and helps provide an answer to employees who may be questioning, “Why should I spend my time, effort and talent working here instead of somewhere else?”
The first step, however, is for the C-suite to make sure they are deeply connected to a sense of purpose themselves. The data reports fewer than two-thirds of C-suite leaders find their jobs full of meaning and purpose. And those numbers continue to drop when looking at lower levels – only 41 percent of frontline leaders report a strong sense of purpose at work.
Company leaders should not underestimate the value of purpose – those who report a strong sense of purpose in their roles are:
- Nine times more likely to be engaged in their role.
- 2.4 times more likely to plan to stay with their company.
Building a strong sense of purpose is not relegated only to industries that deliver noble societal benefits, such as health care. Indeed, the industries that showed the strongest sense of leadership purpose were agriculture, retail and pharmaceuticals. A sense of purpose depends on how leaders model meaning in their work from the top down and communicate to their teams about the value of what they do.
