Whiplash Team, 9th September 2022
Organisational culture and talent retention
The phenomenon that has shaken the U.S. labour market after the pandemic and that was baptized as The Great Resignation has got to Spain. Although the figures are not as alarming as in that country, so far this year some 30,000 Spaniards have given up their jobs. More than ever, attracting and retaining talent is a must for companies.
For a few months now, there have been more Spaniards giving up their jobs than ever before. The trend has reached historical highs causing alarm both in the government and in companies. According to the experts, The Great Resignation has now reached Spain.
This phenomenon, whose name was coined by Anthony Klotz (professor of organisational behaviour at the University College of London’s School of Management) rocked the American job market in 2021, and it’s not yet over. In fact, between 2021 and 2022, it has been replicated in many countries, especially Anglo-Saxon ones.
According to the data recorded in the official employment affiliation reports, in Spain 30,307 people have voluntarily left their jobs in the first eight months of 2022. The highest figure was recorded in April, with 5,467 resignations, a monthly historical maximum since the day this data is being collected (2001).
However, April’s is not an isolated figure. We are facing a trend that continues to advance. Between January and June, the number of resignations shot up by 110% and the massive abandonment of employees continues.
Who and why are they leaving?
The range of reasons why many have quit their jobs is wide. However, the pandemic and all the changes it brought, from work to personal scope, is perhaps the factor that has driven the trend to go global.
Confinement, telecommuting, restrictions, uncertainty and the awareness that life is short have made people, in general, rethink their life goals.
However, in the Spanish case, a significant pattern in the data on voluntary resignations arises. So far this year the largest number of resignations has occurred in the population segment of 30 to 45 year-olds, the Millennials. In other words, they belong to a generation that grew up with technology and have a different conception of times and working methods.
Not only do they value more flexible hours and the possibility of telecommuting; they set the bar very high when it comes to assessing the values and purpose of companies and whether these are consistent with their own values and personal purpose.
It is true that the Spanish figures are very far from those of the United States, where the massive resignation resulted in 50 million people leaving their jobs. In our country there are about 20 million people employed, and 30,307 resignations do not seem too significant.
However, according to a report by the Madrid Business Forum and the Pons Foundation, this record of resignations, added to absenteeism, has resulted in a loss of 1,800 million working hours at a cost to companies of around 39,000 million euros.
What employers say
The tendency to resign from jobs for no apparent reason has been confirmed in Spain since the second half of 2020. Slowly but steadily, the exodus of workers is emptying Spanish companies and this beginning to worry managers, who when seeing the high rotation figures stumble on an obstacle to retain and attract talent.
The report The Great Resignation, keys to winning the battle for talent in Spain, published by Antonio Nuñez, senior partner at Parangon Partners, Jose Ramón Pin, professor at IESE Business School, and Elena Rodríguez, from Opinno, offers a vision of what the businessmen think about it.
The study is based on a survey of 2,430 CEOs and senior managers including questions regarding the causes of leaving. According to those surveyed, resignations do not occur without reason: 67% affirm that the main reason given by those who leave is “to find a job with better conditions”.
On the other hand, although 73% of those surveyed declare having Talent Retention Plans, only 5.5% of the organisations have staff dedicated to this function with a specific budget for that purpose.
An interesting fact that the report reveals is that “The companies that invest most in innovation are the ones that also have the best performance in terms of retention and attraction of talent, therefore, in their productivity.” For this reason, the study points out, “it is important to invest in innovation also ‘internally’, that is, to transform the work processes themselves”.
Antonio Núñez, one of the authors of the survey, highlights that “the report points to the growing need to establish strategies that link employees with the company in terms of vital purpose and an ideology that combines the vision of the employees and the company”.
Employees are much more than a “resource”
Of course, salary, working conditions, benefits and the possibility of reconciling professional and personal life are key factors in retaining talent. Flexible hours and telecommuting are relatively new factors in this equation, but no less important.
To all this, another element is added: the need for employees to be valued by their employers beyond being considered as a “work unit”, an “asset” or a “resource”. Therefore, personnel management is becoming a coaching process and traditional control structures are disappearing.
In this context, the organisational culture becomes a critical element for companies to attract and retain the best talent.
It must be considered that the organisational culture is built on the values and purpose of the brand, which are decisive when it comes to offering a differential experience not only for external customers, but also for company personnel too.
Employees’ attitudes and perceptions toward an organisation are just as influential as those of its customers. However, very little attention is often paid to internal audiences when considering branding –understood as a strategic and not a cosmetic exercise– of an organisation.
Activating the brand within the organisation is rarely seen as more than a communication exercise. The brand’s purpose, vision, mission, and values are talked about without explaining or applying these concepts to the workforce. And that has consequences.
A recent global Gallup poll reveals that almost half (42%) of people quit their jobs because of how they feel about their bosses and the organisational culture. Only 35% strongly believe that their employer cares about them.
To meet the challenge of a high workforce rotation, the brand must be built to inspire and inform both employees and customers.
It must create a space shared by internal and external audiences that clearly and consistently explain the reason for the brand, its differentiating elements, and what is the positive change with which it wants to contribute to improving people’s lives.
Thus, in today’s world, to attract and retain the best talent, building an organisational culture where employees feel an integral part of the brand and share its values and purpose is of vital importance.