Earlier this month, the United States Bureau of Labor Statistics reported that the number of job openings rose to 10.7 million at the end of the third quarter of 2022. That is a half million more than what was predicted in August. For every person looking for a job, there are 1.9 job openings. These statistics make clear that it is not getting easier for corporates to find but also retain talent, often referred to as the war for talent.

The Great Resignation

The pandemic had a major impact on almost every aspect of life, including human capital resources. About nine months into global lockdowns and stay-at-home orders because of COVID-19, millions of employees quit their jobs, referred to as the Great Resignation. Employees were forced to rethink their priorities. For many, this resulted in a heightened search for purpose, reshaping their career paths and shifting what they expected from their employers. They were not wrong. According to a study by the Mayo Clinic, if an employee finds 20% or less of his/her tasks meaningful, chances of suffering cognitive overload (burnout or boreout) are increased by 6.7 times, independent of how much he/she earns.

On the boardroom agenda

Companies need the right people to hit ambitious business targets, especially in turbulent times. However, devising the right talent development strategy is not straightforward. A recent survey showed that more than 80% of leaders are worried about workforce turnover and attracting talent. 68% expect recruitment challenges in 2023, up almost 20% from this year (49%).

Employees are progressively weighing workplace culture in their decisions to join, stay, or leave a company, especially for highly valued skill sets. A good salary alone is no longer enough for many. With demand higher than supply, what was once a routine management task, has now become mission-critical. It is, therefore, not surprising that the war for talent is also a high-ranking concern for the board and that human capital strategies are found increasingly on the boardroom agenda. Employees on their end expect boards and management to ‘walk the talk’ and proactively establish company culture from the top down.

Walk the talk

From new trends in remote/hybrid work models to the growing focus on diversity, equity, and inclusion (DE&I), the war for talent is shaping the topics on the agenda of the board of directors, and even the board itself. Similar to the rising demand for directors with knowledge in cybersecurity as a result of swelling cyber threats, the war for talent has added expertise of DE&I and HR to the board’s skill matrix. The number of board seats taken by directors with an HR background has increased from 11.3% in 2020 to 19.4% in January 2022, many of whom are first-time directors. PwC’s 2022 survey reported that directors feel the board needs to spend more time on talent management, beating crisis management and strategy for the first time.

For corporates, human capital is proven to be key during tumultuous times. Having the right person in the right place is essential, whether it is an unfilled job opening or an unfilled board seat. Good leadership, including from the board of directors, can help a company win the war for talent and weather a crisis.

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