Is 2023 going to be known as “The Great Expectation”?

2021 was referred to, by many, as the year of the great resignation.

Yet I don’t believe that it ever hit the UK.  

I strongly believe that it didn’t affect us significantly here in the East Midlands.

2022 was a year of unprecedented talent shortages.  The most acute “war for talent” that I have experienced in my 25 years at Macildowie.  

Having spent my entire career recruiting white-collar professionals into the best businesses in the region I have never known such a lop-sided recruitment landscape as the one we experienced in 2021/22.  Candidates had all of the power!

As a result of how difficult it was to replace someone leaving, businesses realised that they needed to do what was necessary to keep their current employees as happy as possible.  The initial strategy adopted by most businesses was to pay (everyone) more.  In my opinion, this has been nothing more than a quick short-term sticking plaster.  

This is why I refer to last year as the year of “The Great Payroll Explosion”. (To illustrate my point, I spoke to the MD of a local distribution business last week whose payroll cost has increased by a mammoth 41% year on year!)

Under extreme economic uncertainty, with living costs spiralling out of control, the increase in wages has really done nothing more than balance the books for most individuals and households.  

Your employees are expecting more from you as their skills are in high demand, yet there is low confidence & a seeming reluctance to move jobs due to such high levels of economic uncertainty.  So you still have time to act.  Your team are expecting you to.

For businesses, when combined with all other costs rising due to spiralling inflation, it has led to serious margin and profit erosion.

So, as with any additional investment, businesses want and expect to see a return on their payroll investment.

As a result of both employee and employer expectations rising (with/from one another), I am referring to 2023 as the “The Great Expectation”.

So the question is…

How, as a business, do you win The Great Expectation and what role does HR play?

Below are my observations and thoughts from insights gleaned from local Business Leaders over the last three months:

• Over-communicate with your people.  If you haven’t re-envisioned your Vision and Values post covid then it’s worth considering doing so in order to create greater purpose for your employees along with what they can expect from you as an employer in 2023 (and beyond).  
• Ensure that your staff fully understand your L&D strategy & the personal growth opportunities that are available to them.  
• Ensure that every member of staff knows what they need to do in order to be considered for promotion and invest time to define and clearly communicate everyone’s career paths.
• Give certainty and clarity over your operating model as the “Flexible v Hybrid v Back full time” debate continues to rumble.  Involve your people in the decision-making and don’t force everyone back full-time unless it is essential or they will vote with their feet.  
• Ask yourself “Do our staff think that we care about their well-being?”  If the answer is no, act.  For example, at Macildowie we have just increased everyone’s lunch hour to 90 minutes in January and February to ensure that our staff can make the most of daylight hours during the dark winter months.  
• Your staff will expect you to have an Equality, Diversity & Inclusion (ED&I) strategy.  Make sure you communicate it if you have, and start to work on it if you haven’t.  
• Your staff will also expect you to have an ESG Strategy.  You’re already behind the curve if you don’t.  Involve your people, and build a team of people who are truly interested in ESG.
• Invest in developing your second tier or middle-management as these are the people who feel the pressure from above and below and where employee engagement and therefore culture is won or lost.  Ensure that they are having meaningful one-to-ones with their people.  
• Ensure that people/talent has a regular slot on your Board Agenda.  Agree performance metrics and start monitoring, communicating and managing against them as this will help with any significant economic downturn or under/over performance conversations and help provide parity in salary or bonus discussions.  We know of a few business leaders who have paid everyone more, but feel as if they are getting less from them – this needs managing and expectations need to be set.
• Make sure that you are totally aligned on the strategic goals as a Senior Leadership Team, and agree how and when performance against these will be communicated to the business.  

 The Great Expectation means that once again, we all have lots of work to do to create a great place to work, with highly engaged staff, who are helping us to hit our business goals.

Good luck this year, I look forward to speaking to some of you soon,

James 

PS – if you would like any kind of assistance with any of the points raised in this article, Darius Matusiak is our MD of Talent Partnerships here at Macildowie – he would be delighted to have a no-obligations intro call with you.

PPS – we have a series of on-line free-to-attend events which have been designed to help with many of the points raised in this article.  You can access these here.