As we look back on the year, it is clear that the persistent theme in 2021 is people. The pandemic affected our workforce in many ways, both positive and negative, immediate and latent. Let’s take a minute to review.

The Boomerang of Demand: The obvious and immediate impact of the pandemic was a precipitous drop in demand in the second half of 2020, followed by an equal to larger in size resurgence of demand in the first half of 2021. Many organizations took the necessary steps to right-size their teams and hunker down. When demand came back, services leaders were not able to simply flip the switch and get back all the needed capacity. This was further complicated by the next development.

A Talent Shortage: As demand came back, services organizations realized that recruiting had become much more difficult. The pandemic, and associated slowdown, actually dislodged some resources from the workplace overall, or compelled others into different career pursuits. Collectively, it was clear that there was a shortage of good talent.

This supply imbalance led to an even greater, latent impact… the destabilization of our resources and resource processes. Recruiting became a significant challenge, with hire intervals expanding and a rise in candidates abandoning their offers for better ones. In Q3, there was evidence that global tech firms were experiencing 30 – 50% of offer abandonment rates. In addition, attrition was on the rise. Service organizations, used to low teens attrition, were experiencing rates in the low to mid twenty percent range. Add to this the data point from Microsoft’s Work Trend Index showing that 41% of the global workforce are considering a job change in the next year.

If you and your organization experienced these impacts, take comfort in knowing you are in the majority.

To combat these impacts, we have highlighted in prior PS Insights newsletter editions, some of the steps organizations have taken:

  • Warm Pool Recruiting: Always be recruiting.
  • Improve Training & Onboarding: A significant contributor to lowering attrition.
  • Resource Forecasting and Capacity Planning: More important than ever. Have better tools, data, and processes to predict demand.
  • Containerization of our People Data: Have a strategy to standardize the data of our people ecosystem.
  • Embrace Virtual: Continue to optimize how teams can work in virtual environments.

We are very excited for 2022. We believe services organizations have weathered the storm and learned a lot from the experience. In 2022, we will continue to see innovation in our service delivery models as temporary fixes become lasting improvements for our organizations.

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