January is said to be the best month to job hunt. On the hiring side, managers return to the office with fresh budgets and renewed impetus. On the talent side, many people enter the new year resolute to seek out new opportunities.

According to a BCG survey of 11,000 workers across 8 different countries, 28% say they do not see themselves with their current employer within a year.

The So What

“Given there is still record low unemployment in many countries across the globe, it is vital for companies to prioritize retention. At the end of the day, in places like the US, there are companies looking to fill more jobs than there are people available to fill them,” says BCG Managing Director and Senior Partner Deborah Lovich.

• For every person looking for a job in the US, there were 1.34 job openings as of October 2023, according to data from the Bureau of Labor Statistics. This figure has been persistently higher than one since April 2021.

High staff turnover—and the recruitment and training needs that follow—have many implications for morale, performance and the bottom line. But labor shortages have also hit operations, with many factories, distribution or retail outlets unable to find enough staff to keep operations running or uphold service norms, Lovich says.

“The result is a fundamental change in the relationship between employer and employee, with companies needing to reframe how they think about their employees and take urgent action to protect themselves.”

Now What

• Consider Employees like Customers. The shift in the power dynamic between employer and employee means that companies need greater understanding of their staff’s needs, preferences and behaviors. As with customers, this will require deep discovery and segmentation, so that appropriate employee value propositions and offerings are created. Companies should also apply personalization, design thinking and true employee journeys to strengthen their connection with their employees.
• Don’t Forget the Basics.  Employers will need to deliver against functional needs like pay, benefits and hours. This is what we call table stakes—it’s what staff have come to expect and can’t be overlooked, especially given the cost of living, explains Lovich. And, given the advances of generative AI, job security is also important to employees alongside having access to the right resources to carry out their job.
• Work to Meet Employees’ Emotional Needs. Successful employers must go above and beyond to make employees feel valued and appreciated. This includes making sure staff feel supported by their senior managers, and that everyone is fairly treated and respected. Employers should also prioritize inclusion and equity, so that people feel they have a fair and equal chance to succeed, as well as having a sense of belonging and connection.
• Grow Great Managers. A good boss is one of the most compelling reasons why people stay in their job. BCG research shows that great managers are associated with a 72% reduction in attrition when comparing employees who are very satisfied with their managers with those who are very unsatisfied. It’s not simply a case of training managers, Lovich explains, but rather actively seeking out the happiest and best performing teams in your organization and examining what those managers do in order to replicate it. Good management can’t be taught on a course, but must be practiced every day, systematically building the routines and rhythms that make it a habit, she says.