How do we rebuild society around what we’re going to be next, rather than what we used to be?
This question is top of mind for many leaders who are realizing their employees aren’t responding to the tactics and management practices of the past. What worked in the past simply isn’t working anymore.
Welcome to the Talent Economy, where value comes increasingly from the knowledge of people, the sharing of assets, and the accessibility of digital networks.
In the Talent Economy, if people don’t care about the mission, about their leader, or about one another, the team becomes fragmented, disengaged, and eventually falls apart.
In the Talent Economy, empathetic, trust-based leadership is the most effective way to lead a team and the most profitable way to run a company.
The rise of the Talent Economy indicates organizations are powered more by innovation and ideas than ever before, and knowledge and expertise have become as critical, and in some cases more, as other economic resources.
This isn’t new. The shift toward a talent-based, knowledge-based economy was first identified in the 1990s, alongside the evolution of Google and other dot-com companies. Yet here we are 20-plus years later, and organizations are still struggling to transition.
This is why there’s a literal generation gap in our workplaces. Millennials and Gen Zs have come of age during the Talent Economy; they have little to no memory of the Industrial Era and, therefore, no appreciation or understanding of processes and traditions and doing things the way they’ve always been done.
Young professionals have only known a world powered by knowledge, innovation, globalization, information, connectivity, and expertise. Anything else will seem foreign and irrelevant to them. They will struggle to comprehend why it’s ‘always been done this way’ and why decisions can’t be made on the fly.
Quite simply, this is why turnover is skyrocketing. Organizations rooted in the past will continue to struggle to understand and engage a generation raised in the Talent Economy.
In 2008, the Great Recession led to soul-searching and skills re-evaluation. Between 2000 and 2002, the global pandemic and the Great Resignation launched a similar response. In order for employers to successfully engage talent, they need to be mindful of these shifts:
- Young professionals demanding the respect of their employers and holding their leaders accountable to ethical and sustainable decisions;
- High levels of stress for many as they adjust to the new economy and fears of war, economic decline, climate change, and violence; and
- Increased competition for talent.
In other words, having a job and receiving a paycheck is no longer enough. In a knowledge-driven economy, employers need to care far more about personal development and their contributions to a greater good than offering employees gym discounts, pet insurance, and ping pong.
After a century of working ever harder to own more, Millennials and Gen Zs are calling for an end to that ingrained societal cycle and changing the concept of work and even ownership.
They want to share more and own less. They want to find joy, support, and positivity at work.
Technology raised their awareness of injustice and need in the world. Bombarded daily with new information and threats to survival and a stalled government—young people believe the only way to improve the situation is by innovation and taking matters into their own hands.
That’s why young people are more likely to be social entrepreneurs working for social enterprises, meaning they prefer to work outside government to create innovative and measurably successful solutions to the nation’s problems. The terms ‘social enterprise’ and ‘social entrepreneur’ means young generations engage in collaborative problem solving (social) and take the initiative to make a positive change (entrepreneurship) or work for a company that seeks to make positive social change (enterprise).
It’s these types of attitudes that are leading in the Talent Economy. The vast majority of young professionals strongly favor companies committed to the community, climate, or a cause.
They want more from their employer than just a paycheck, they want a sense of pride and to feel the company’s values match their own.
Ready to bring your team into the future of work? Let’s connect and see how we can help.