A shortage of staff is one of the biggest risks to your organisation

Focus more on recognising individuals

Rather than increasing everybody’s salary, you might instead focus on awarding individual bonuses that are performance-based. Bonuses are often paid to an entire team or a department, whereas in practice staff appreciate it when their individual performance is recognised and rewarded. This point also came across in our survey of LeasePlan's remuneration policy.  

A different approach is needed for the new generation

Most of the executives in the CEO Survey say that shortage of staff is the main factor that will influence profitability in the coming years. I can well imagine that as the problems won’t be over for society even if the labour market became half as tight. At the same time, a new generation is entering the labour market, with different wishes and needs. That's why it’s relevant to examine whether your collective agreement is a good match with the preferences of your current and future employees. 

PwC’s Workforce Preference Study last year showed that the younger generation attach great importance to a good basic salary. That's understandable given the way many of them are being hit hard by inflation and rising house prices. In the same study, young people indicated that they attach less importance to a company's status and reputation. They are far more interested in the organisation's activities, products and services. You should therefore make clear to talented young people what your company does and which challenges it faces. Also outline a clear development plan for them.

Organizations can no longer be everyone's friend

Simply advertising vacancies with a ‘competitive package of employment conditions’ is out of date. Companies need to intentionally invest in their distinctiveness within the labour market by means of more closely targeted advertising and offering elements which appeal to specific target groups. 

In doing so you will need to accept that this will make your company less attractive to other groups inside and outside the organisation, but in the ‘war for talent’ there’s no longer any room for ‘being friends with everybody’.

What’s clear is that employers currently face an unprecedented challenge as regards implementing their strategy, and sometimes even their continuity. The combination of a tight labour market, fundamental shifts in talented people's preferences and a turbulent economic climate is creating a great deal of uncertainty. It’s important for employers to properly understand what motivates employees, to sharply define their company’s distinctiveness within the labour market, and to invest in a more targeted manner in the attractiveness and productivity of the company. That way they will get ahead in the battle for increasingly scarce talent.