Resignation to reflection: The challenges of a changing talent market
Our recent eBook, "Powering Performance: How People Teams Can Create A Performance Culture That Really Delivers," offers a comprehensive exploration of the dynamic of the constantly evolving workplace and how to understand the new challenges and opportunities in talent management with a focus on how businesses can adapt and thrive in this new environment.
In this blog post, we dive into one of the eBook's key sections, "Resignation to Reflection: The Challenges of a Changing Talent Market," to uncover how the pandemic and the Great Resignation have reshaped the landscape of employee engagement and performance. This segment provides invaluable insights for tech companies and others facing similar challenges, offering strategies to navigate this new talent market effectively.
Pandemic to Great Resignation
It’s safe to say that the last few years have been more than a little volatile for tech companies and their employees.
First, the pandemic forced an overnight shift to remote work - which has defined much of our working lives ever since. Then came The Great Resignation, where employees left their roles in droves in search of greener grass elsewhere. Since then, economic uncertainty has defined the world of work, leading to smaller budgets, less hiring, and high-profile redundancies across the industry.
Against all this volatility, tech companies have had a varied time. Those providing collaboration technology did very well out of 2020’s stratospheric rise in remote working - and the same is true for AI startups in 2023. But others have struggled. Across 2023, 240,000 jobs in tech companies have been lost, a staggering 50% rise in 2022. And with high-profile redundancies from the likes of Google, Amazon, and Microsoft, it’s clear nobody’s safe from the disruption.
Many tech companies are now having to be more realistic about what they can achieve and the resources they have to do it with. That’s where performance management comes in.
But here’s the challenge: employees have been on their own journey in the last few years. The pandemic made many rethink what they really valued at work, which is why so many decided to move on in the immediate months after. Today, employees might be less willing to jump ship than in 2021 and 2022 - but the employee engagement concerns that led to the great resignation are still there. This creates a key issue for people teams: how do you implement effective performance management without impacting the employee experience? Ultimately, disengaged employees won’t perform well, even if they do stay with the business. That means performance and employee experience are implicitly linked. To improve one, you have to focus on both.
It’s time to redefine performance management
If instability was the watchword of 2023, performance management is the obvious solution. But to improve performance management, we have to first define and understand it.
Even a few short years ago, this was pretty straightforward. To be frank, it was a tool used by companies to make the lowest performers better at their jobs. Often, it was simply a tick-box exercise on the road to redundancy. But in the last few years, organizations have increasingly started to look at performance management very differently.
Today, 32% of respondents from HR teams indicate that employees now have greater input into their performance goals. At the same time, 30% indicate that managers are now touching on issues aside from performance – such as wellbeing. All of this is symptomatic of a much wider shift in how businesses view performance
To understand this transition, it’s helpful to refer to the attitude/aptitude matrix. This is an increasingly popular way of thinking about employee performance and how it relates to the wider company culture. Essentially, it splits employees into four categories:
By framing performance in this way, we can start to see the issues with traditional performance management, and the reasons many are now moving away from it. Essentially, the old approach focused entirely on low attitude, low aptitude employees. Sure, all businesses will, at some point, have to deal with people who aren’t working at their best. But if this is all you’re focusing on, you’re missing a huge opportunity to get the most out of the vast majority of people who don’t fit into this category.
Done right, a good performance management process should get the most out of everybody. But to do that, you need to reconsider how you define performance management and the specific goals you expect it to deliver. Today, effective performance management needs to be about much more than simply setting targets, performance reviews, and annual appraisals
This, ultimately, is the journey that performance management has been on in the last few years. Increasingly, people teams and line managers are realizing the potential of a properly joined-up performance management strategy. To oversimplify, it’s now far more about the carrot than the stick. And this is why you can’t deliver effective performance without prioritizing employee engagement.
So, what does that look like in practice?
It’s all well and good talking about attitudes and mindsets. But for decision-makers in HR and People Teams, the imperative now is to create tangible changes that make a real impact on both key performance metrics and the employee experience.
In our eBook, we explain how to do just that across six main sections.
1) Understand the skills you have - and those you need
2) Build a long-term strategy for talent and skills
3) A new approach to targets, goals, and reviews
4) Define a winning employee value proposition
5) Democratize learning for better results
6) Get the right learning tools for success.