The labor market is changing so frequently that even the pundits have given up trying to understand it. The volatility is likely to continue for foreseeable future. The BLS (Bureau of Labor Statistics) projects that a large number of open positions will remain through 2030 — which also happens to be the year when the youngest boomers will reach traditional retirement age. As employers struggle to flesh out their workforce, it is clear they have their work cut out for them. But some employers are successfully hiring and retaining a skilled workforce. What can we learn from these next-generation employers?

EX is the new CX

Customer Experience (CX) gets plenty of (well deserved) attention. However, we’ll go out on a limb here and say that employees are SMB’s new customers. Research shows that people who report having a positive employee experience have 16 times the engagement level of employees with a negative experience, and that they are eight times more likely to want to stay at a company. Therefore, creating an Employee Experience (EX) that attracts, engages, and retains qualified employees is job one. In fact, more than 90% of employers plan to make enhancing their employee experience a top priority in 2022. So, what is a positive employee experience and how do SMBs go about creating one?

Leading with empathy, offering flexible benefits and work schedules, providing learning and advancement opportunities are commonly cited elements. McKinsey research on the subject sums it up well, “Workers are hungry for trust, social cohesion, and purpose. They want to feel that their contributions are recognized and that their team is truly collaborative. They desire clear responsibilities and opportunities to learn and grow. They expect their personal sense of purpose to align with their organization. And they want an appropriate physical and digital environment that gives them the flexibility to achieve that elusive work–life balance.”

Digital natives are in charge

Millennials are the largest segment in the workplace. Unfortunately, they are also the least engaged generation in the workforce. Gallup research shows that 55% of millennials are not engaged and another 15% are actively disengaged, leaving a paltry 30% saying they are engaged or actively engaged. Millennials are the last generation to remember a world without the internet and the first generation to fully embrace technology. They even have the dubious distinction of having more screen time than any other generation in history.

What employers must understand in order to attract and retain millennials is that they crave technology and see it as a fundamental part of being productive on the job and an essential aid in their professional development plans. Employers that provide next-generation business management technology, including ERP and CRM, are more likely to appeal to this demographic.

A recent Gallup poll found that 87% of millennials said professional development was an important part of their job. Employers that embrace and promote employee training and career planning will win the loyalty of this group. It’s worth the effort. At companies where managers show sincere interest in millennials, the organization sees an 8x improvement in agility, and a 7x increase in innovation.

Hot on millennials’ heels is Generation Z. These Zoomers were babies when the iPhone was first released. As true digital natives, they are the first to grow up with access to the internet and portable technology from a very young age.

Since Generation Z are just beginning to enter the workforce en masse, employers don’t yet have a definitive idea of what it will take to attract and retain them. However, job site Indeed tells us Zoomers have “adapted to a more diverse, technologically savvy and value-driven lifestyle, which they will expect to reflect in their work-life as well.” 

Zoomers want to understand how technologically advanced your business is before they accept a position. They expect their workplace technology to at least be as advanced as their home and personal tech. And don’t think you can buy their loyalty, In Understanding Generation Z in the Workplace, Deloitte found that Generation Zers value salary less than every other generation. Instead, to win the hearts of these up-and-comers, employers will need to amp up the technology, promote equality and inclusion, and demonstrate their commitment to being a good global citizen.

Together, millennials and Generation Z now make up nearly half (46%) of the full-time workforce in the U.S. In other words, ignore them at your business’s peril.

Human Resources is having a moment

Next-generation employers understand that they have to lead with HR. At next-gen companies,  Human Resources department and its professionals are in the spotlight. When talent is this hard to find, we place a high value on those charged with finding it. It’s no coincidence that LinkedIn’s top 25 jobs include >three employee-centric roles: Diversity and Inclusion Manager (#2), Talent Acquisition Specialist (#12), and Chief Human Resources Officer (#25). 

HR teams need next-generation technology to keep their company competitive. Recruiting and onboarding, risk mitigation and compliance, time and attendance, training and development, employee benefits, talent management, and payroll processing are all critical tasks that technology can improve and streamline. Bringing the subject full circle, your company’s HR professionals are employees too, meaning they are looking for the same opportunities, experience, and digital enablement we’ve been talking about. 

Learn from the best

47.4 million Americans voluntarily left their jobs in 2021. Companies that want to hire and retain the best and the brightest must consider how their corporate culture, values, employee experience, and technologies will appeal to a changing demographic. Next-generation employers are making the necessary investments in these areas and will outpace employers who stick with the status quo.