Beating the talent crunch to drive business revenue and profit

The ‘Great Resignation’, the ‘Big Quit’, the ‘Great Reshuffle’ – whatever you call it, this phenomenon describing the surge in people quitting their jobs during the pandemic has caused havoc at organizations.  Although the tech industry is now facing a wave of job cuts as profits and revenue fall, businesses are nonetheless still grappling with a high attrition rate. In India, that rate is between 23% and 28%.  A study by the Everest Group, indicates that India is experiencing an acute talent crunch of 39% in IT and engineering, while the US is at 45%, and Western Europe (including the UK and Ireland) at 43%.

Impact of talent crunch

Talent crunch affects companies’ ability to meet client needs and impacts their revenue and profit. A recent study by Korn Ferry finds that by 2030, there will be a global human talent shortage of more than 85 million people. 

Need to navigate talent shortage smartly

Holding on to staff is linked to revenue growth: according to the Infosys Knowledge Institute’s The Future of Work 2023 report, based on insights from a survey of 2,500 senior executives and managers involved in workplace and workforce planning for large companies across the UK, the US, Australia, New Zealand, France, and Germany, companies that increased their staff retention between 2020 and 2022 were almost 20% more likely to increase revenues and profits than those that saw retention fall during this period.

Shift in talent strategies 

Employees are calling the shots in the IT industry. They are seeking much more than just pay, and placing great value on flexible work arrangements, fulfilling work, and personal well-being. Firms are also realizing that they need to be sensitive to the needs of their employees and find ways to make them feel supported. 

• Flexible working
  
  The end of fully remote work as the pandemic eased was one of the main factors that drove the tidal wave of resignations. Firms have responded by coming up with more flexible ways of working, be it working from home, co-working spaces, or working in the office for few days of the week. We asked why firms are hiring remote workers:  65% of respondents cited the need to attract or retain talent and skills – and new candidates prefer to work remotely. The report found that 41% of companies are planning to increase remote working hires in the next two years. What’s interesting is that remote working is viewed more as a growth tool rather than a cost-cutting mechanism. 
• Increased investment in digital technologies
  
  An increase in remote working has translated to greater focus on digital tools and technologies that enable seamless virtual collaboration. Hence, investment of organizations in digital technologies is also expected to grow. Infosys Knowledge Institute’s Digital Radar report published in February 2022, which surveyed digital transformation leaders from companies across the US., Europe, Asia, and Australia, found that spending on digital shows no signs of decreasing, with 62% of respondents saying they plan to increase their tech spending by 5% or more. Modernization and automation are linked to improved retention. Automating routine tasks allows employees to focus on work that they find rewarding and frees up employees’ time, helping improve their work-life balance
• Diverse sources, diverse hiring
  
  Organizations are beginning to look beyond hiring from traditional talent sources which are highly competitive, not to mention expensive, and are exploring new avenues such as vocational colleges and gig platforms. Our research found three talent sources that are linked to growth: external skills marketplaces, universities, and community colleges (including polytechnics or vocational programs). 
• Focus on training and reskilling
  
  Companies looking to increase talent retention and remote working hires are focusing on digital reskilling in a big way, as it has been linked to greater retention. We found that human-centric levers, such as upskilling, self-organizing, and using advanced collaboration platforms, can increase business growth by as much as 63%. The tech giants are also realizing its value. For instance, Amazon has invested more than $1.2 billion to provide upskilling training programs for 300,000 employees by 2025. Salesforce is aiming to create more than 4 million jobs by 2024 and has introduced a digital upskilling program.

These are broad strategies that will help retain talent and help drive revenue and profit growth. Individual firms need to understand their specific issues as well as the bigger picture. With that in place, companies will be able to create environments where their workers can thrive. 

The article has been written by Rajesh Varrier, EVP, Head of Digital Experience & Microsoft Business, Infosys