Good morning.
Whether you call it the great resignation or the great reshuffling, or just a great battle for talent, there is something going on in the labor market that is unprecedented in modern times.
But I was encouraged and even inspired yesterday by a conversation among forward-thinking CEOs, assembled by Fortune and McKinsey, who are using the talent-challenge as an opportunity to reinvent HR. They are shifting to skill-based from degree-based hiring, finding new and unconventional ways to source diverse talent, up-skilling existing employees rather than replacing them, providing new flexibility to workers as to when and where and even how they work.
The battle for talent is forcing the best companies to become better, by rethinking policies towards people. Some excerpts:
“The great resignation is real… But you can greatly mitigate it by ‘re-recruiting’ existing employees and talking about what are the benefits, what is the career path, what is the workplace experience (if they stay)… We use A.I. to determine which employees may be at risk of leaving, and then sit down and make an assessment of what’s driving them out.”
—Arvind Krishna, CEO, IBM
“We are now looking at how to extend the incentive compensation plans through the whole hotel, as opposed to just for managers and above… The people who can move the guest experience data, which we’re tracking very carefully, are the ones who are intersecting with the guests directly.”
—Mark Hoplamazian, CEO, Hyatt
“You have to think about training and hiring differently… We have a group of companies—there are 50 or 60 in Chicago, and we’ve expanded this to six or seven cities across the U.S.—that are using apprenticeships, working with city colleges, and, I kid you not, we have come to realize this is as a source of talent that is performing as well as our current talent ever performed.”
—Greg Case, CEO, Aon
“There are actually 100 million people in the United States alone who do not have four-year college degrees, but are employable, if we take a skills-based approach.”
—Asutosh Padhi, Managing Partner, McKinsey North America
“I have to say, I was not in favor of this virtual way of working. But early on, we said you can work from wherever as long as your supervisor agrees. And it’s working. And if anybody on the line doesn’t want to be flexible, tell me your company name, and I’ll be happy to recruit your employees.”
—Dave Burritt, CEO, U.S. Steel
“We’re reducing our real estate footprint over the next three years by 70%. And our whole senior team, starting with myself, is going virtual… We’re able to source talent, not just from the traditional geographies, but wherever the best talent is available.”
—Rod Martin, CEO, Voya
“In health care, we are seeing people doing remote work who we never thought would do remote work. I mean physicians in remote work—10 years ago people would have laughed at that. But that is a real thing now .“
—Anne Klibanski, CEO, Mass General Brigham
“We have a program to prepare returning veterans for technician-level skills for our customers.”
—Blake Moret, CEO, Rockwell Automation
“You have to build an environment where people feel empowered. It gives people agency if they understand the why of what we do and feel connected to a bigger thing. They’re more inspired to do it. “
—Joanne Crevoiserat, CEO, Tapestry
“I think, high level, people seek more autonomy. For more freedom, people leave their countries. They leave their families… So my belief is that if you don’t give the autonomy that people want, they will find companies that will give them the autonomy.”
—Ari Ojalvo, CEO, REEF
“Corporate responsibility is an area that we really doubled down on through the pandemic. We created a new metric for the number of patient lives that we touch… We actually counted 100 million last year, and we’re going to track that every single year. And it was wildly positively received by our employees.”
—Kevin Lobo, CEO, Stryker
“We can learn so much from our teams. At the beginning of COVID, there were lots of town halls, which is very good for management communications. We’ve switched to spending a lot of time listening to our teams.”
—Stanley Bergman, CEO, Henry Schein
“We think about why people come to work, and it is really three things: ‘What’s the job?’ is number one. Number two is: ‘What’s the pay?’ And number three is: ‘Who’s my boss?’ So we spent a lot of time on the last topic, which is leadership.”
—Steve Rusckowski, CEO, Quest Diagnostics
CEO Daily will be off tomorrow. See you next week.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
All eyes on the ECB
Later today, it's the European Central Bank's turn to calm inflation fears. With consumer-price growth running at a 7.5% clip, the central bank is expected to rein in its bond-buying. Deutsche Bank, for one, expects the ECB to stop its purchases by July, and begin raising rates in September. (Yes, it's a good six months behind the Fed in beginning to tighten.) European stocks are flat ahead of decision day. CNBC
NATO expansion
Vladimir Putin really won't like this: Russia's neighbor Finland has begun the process to obtain NATO membership, and there are reports out of Stockholm that Sweden is considering the same. Meanwhile, Organization for Security and Co-operation in Europe on Wednesday says it's amassed "credible evidence" that the Russian military has violated the human rights of Ukrainians, a step towards determining whether the country is guilty of war crimes. The Guardian
Musk makes a bid for Twitter
Twitter shares are booming in pre-market this morning after Elon Musk said he wants to buy his favorite social media platform and take it private. Musk is offering $54.20 per share, a 20% premium over yesterday's closing price. Fortune
AROUND THE WATERCOOLER
Everything you need to know about the housing market
Today Fortune publishes its much-anticipated Quarterly Investment Guide. The topic: the red-hot housing market. In the guide, Fortune’s crack finance team analyzes the top regional real estate markets, they do a deep-dive into beaten-up home-builder stocks, and tell you why this market looks far different from the pre-2008 one that boomed, and ultimately popped. Fortune
How to calculate a fair pay-raise in 2022
The tightest labor market in memory plus runaway inflation is a rough combination for employers and their employees. Add it up and the pressure is higher than ever to give staff a raise this year that not only runs above inflation, but tells them we value your work. But how do you make that calculation? Fortune’s Geoff Colvin has some tips after speaking with top pay consultants for major companies. Bonus read: Employers can’t afford to raise wages as cost of living soars—here’s what they’re doing to retain talent instead Fortune
The Fed is really wrong on inflation
That’s the take from Johns Hopkins University economics professor Steve Hanke. As Fortune’s Shawn Tully points out, Hanke has been saying for some time that Jerome Powell’s view—that temporary supply chain snarls are to blame for rising prices—is flat out wrong. He also says inflation will last a good two years, again contradicting the Fed. Fortune
This edition of CEO Daily was edited by Bernhard Warner.
This is the web version of CEO Daily, a newsletter of must-read insights from Fortune CEO Alan Murray. Sign up to get it delivered free to your inbox.
