McKinsey Report: Focus on employee development to gain an edge during recession

varsha sarkar

February 15, 2023

2:24 pm

Research by McKinsey on the causes of and characteristics of the Great Attrition, also known as the Great Resignation says that the Great Attrition is happening, it’s pervasive, and it’s certain to continue—if not accelerate—and many companies, despite their best efforts, still don’t comprehend what’s truly happening. These businesses are acting ineffectively based on incorrect assumptions.

This does not need to be the case. The Great Attrition could turn into the Great Attraction if businesses make a deliberate effort to better understand the reasons why employees are quitting and take effective measures to keep them. By taking advantage of this once-in-a-lifetime opportunity, businesses might gain an advantage in the competition to find, cultivate, and keep the talent necessary to build a successful post-pandemic organisation.

Although Europe has raised its defence spending, senior partners David Chinn and Hugues Lavandier and coauthors point out that this is insufficient to meet the continent’s defence policy objectives. In certain categories, Europe currently employs more than five times as many military systems as the United States. European countries may aim to assure improved efficiency to reduce costs and make funding more effective.

The majority of workers who claimed to quit their previous positions without finding new ones were from the United States (40%). A reminder of the impact of the pandemic on frontline employees comes from the fact that 42% of healthcare and social assistance professionals who left did so without finding new employment. Across all income levels, one-quarter of white-collar employees who left their jobs admitted that they had done so without having a job lined up.

Not only is this tendency likely to continue, but it might perhaps grow considerably worse. About two-thirds of workers who said they are at least somewhat likely to quit their jobs in the upcoming three to six months added that they would do so without finding new employment.

Senior executives must comprehend the causes of high staff attrition, sometimes known as the Great Resignation. Many are having trouble doing this. For instance, when asked why their employees left, employers frequently mentioned salary, work-life balance, and poor mental and emotional health. Employees did care about these concerns, although perhaps not to the extent that employers had anticipated.

In contrast, the top three reasons given by employees for leaving their jobs were that they didn’t feel appreciated by their employers (54%) or their supervisors (52%) or that they didn’t feel a sense of belonging at work (51%). An alarming reminder of the injustices experienced by Black employees and other minority groups can be found in the fact that employees who identified as non-White or multiracial were more likely than their White counterparts to say they had left because they didn’t feel like they belonged at their companies.

For 2023 and beyond, McKinsey has created a wide range of macroeconomic scenarios. The scenarios outline the shorter-term options that will significantly influence which course the global economy may ultimately take while taking into account both good and unfavourable long-term results. In order to move their firms courageously forward, leaders must choose which activities to take regardless of how the environment develops and what measured risks to undertake. Others may perceive distinct possibilities and threats, while some may come to the conclusion that their business model and strategic decisions would remain basically the same regardless of the macro outcomes they believe are feasible.

What has changed, and why there hasn’t been a new variant of concern

Many tests were being put into the world. The COVID-19 Omicron variety was quickly spreading in January 2022. Despite record demand, logistics teams were still having trouble with broken supply chains. The cost of commodities increased by 30%, as did the cost of international container transportation and domestic freight hauling. Wages increased by up to two times the rate prior to COVID-19 due to labour market imbalances, which were particularly severe in the United States and the United Kingdom. At the time, inflation was at what seemed to be at its generational highs.

varsha sarkar

February 15, 2023

2:24 pm

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