Three focus areas to attract and retain frontline talent

As we close out 2022 and look ahead to the new year, now is a good time to pause and reflect on the emphasis companies today place on retaining and attracting frontline talent and areas they should be considering for investment going forward.

Before the pandemic, CEOs that participated in Gartner’s annual CEO and Senior Business Executive Survey often ranked retaining and attracting talent as a top ten priority. While this may seem encouraging, when we dug into the research on degree of investment, it was clear that workforce, even when noted as a priority, was not invested in as such. It was still viewed as a cost compared to growth (always No.1) or technology/digital strategies.

Then the pandemic and various concurrent disruptions followed. Frontline labor shortages and attrition meant that manufacturing lines could not run, orders could not ship and stores could not open. Business came to a standstill, or slowed dramatically, because supply chain leaders and their partners did not have enough qualified people to run their operations.

As organizations felt the strain from these challenges, we saw a noticeable shift in the response from CEOs that participated in Gartner’s annual survey in 2021 and 2022. In fact, for the first time in 2022, workforce was identified as a top three priority, only a little behind technology-related issues such as digitalization, e-commerce and cybersecurity, and significantly ahead of financial issues such as profitability, cash flow and capital funding.

A terrible mistake

The greater emphasis placed on the workforce now comes at a crucial time. The current way supply chains are being operated is not sustainable for businesses or supply chain workers. Additionally, with a recession already rolling across supply chain-intensive industries, notably tech, apparel and retail, the temptation is strong to put workforce on the investment backburner that it occupied pre-pandemic. This would be a terrible mistake.

Companies’ supply chain futures depend on leadership protecting and executing against the talent priorities in today’s supply chain strategy and roadmap. Armed with what we’ve learned from early investments, experiments and research about what is working for frontline employees, and what is less impactful, let’s get practical and see where we can make an impact in the year ahead.

Three areas of focus

The Gartner 2022 Frontline Worker Experience Reinvented Project surveyed 405 frontline supervisors, middle managers and senior leaders globally, across industries. And just to be clear upfront, frontline here means employees whose work activities require them to be on a company site or other physical work environment (including vehicles) at least 90% of the time.

We studied the employee value proposition attributes that matter most and the frequency with which they’re used. That led to three key take-aways for chief supply chain officers (CSCOs):

Flexibility is crucial: This is hugely important for both retention and recruiting of frontline employees. According to this newest research, it is the most effective investment for reducing attrition and second-most effective investment for recruitment; however, it is least likely to be used. Flexibility beats out compensation for both retention and recruiting effectiveness. Yet, there are considerable gaps in employee preferences and organizational offerings, from the physical location they work at to who they work with and on what days.

Well-being is a priority: Employee well-being emerged as particularly important and highly effective in attracting new employees. This includes investments in physical, mental and emotional health through benefits and programs inclduing gym subsidies, financial education and stress management support. Well-being beats out both compensation and flexibility as the most effective recruiting investment in our research.

Competitive pay: Frontline compensation is already a top investment area and rated highly effective in recruitment, but due to its importance and recent inflationary stresses, it requires sustained attention from CSCOs and their HR and finance partners. Attractive compensation, ready access to that compensation and visibility into financial upside are extremely important for frontline roles.

Looking beyond the classic attraction and retention KPIs, our research shows that employers that invest in their frontline employee experience achieve better operational and business performance. With CEOs’ interest currently peaked in improving the workplace, now is the time for CSCOs to be vocal about making flexibility, well-being and ready access to competitive compensation standard practice in their employee value propositions.

Dana Stiffler is a Vice President and Distinguished Analyst in the Supply Chain Research & Advisory group. She covers supply chain talent strategies and the chief supply chain officer role, as well as supply chain university programs. She launched and led the Supply Chain Strategy & Enablers team within Gartner Supply Chain Leaders and has been responsible for the launch and leadership of the Supply Chainnovators program, the Gartner/AWESOME Women in Supply Chain Survey and the Gartner/ASCM Supply Chain Diversity, Equity & Inclusion Survey. She can be reached at: [email protected]

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