A Roadmap for Thriving the Demographic Drought
As we transition into September, I'm feeling energized after attending CultureCon, an annual conference in Madison that brings together culture advocates to connect, build relationships, exchange insights, and share knowledge to help foster cultural growth in our communities.
This experience inspired me as I look forward to speaking with a group of CEOs later this month about “A Roadmap for Thriving the Demographic Drought”. I'm interested in understanding how well leaders are prepared for the challenges of the demographic drought. The good news is that there's still time to develop a culture strategy today that will position leaders and their organizations for future success.
To provide context, a demographic drought is a labor shortage where there are not enough people to sustain the labor market. This is also referred to as a Sansdemic. Multiple factors caused it, including:
Mass exodus of baby boomers from the workplace
Record low labor force participation rate of working age people
Lowest birth rate in US history in 2020 coupled with the fact we are living below the 2.1 birth replacement rate since the early 1970s
The demographic drought is the new normal as the majority of the US working age population shrank from 2011-2021 and reinforcements are not coming from the younger generation. The COVID pandemic acted as an accelerant and the expected labor work force will taper down in next 25 years. Millions of non-exempt workers are quite quitting citing engagement and culture as needed changes. Lastly, in the aftermath of the COVID pandemic, new expectations around flexibility, culture, and well-being are playing an increasingly decisive role in employment decision.
While this might not be new information, the key question to consider is, "Do you believe your organization is the place people aspire to work?"
1. What You Need to Know as a Leader
Employees are no longer disposable as we do not have the younger workforce to replace our seasoned workers who are exiting the workforce. Additionally, employees who leave may not be easy to replace. In a competitive labor market, building an organization where people want to work is critical. According to Gallup, 55% of people whose company had a good culture are less likely to be looking for another job. What actions are you taking to retain talent? Your culture can be your competitive advantage. This is why diversity, equity, inclusion, and belonging (DEIB) matters.
2. Understand Where You Are on the Five DEIB Stages of Maturity
A Harvard Business Review article describes five stages of DEIB maturity and the percentage of companies at each stage based upon a survey of 10,000 knowledge workers across six countries:
Aware (14%) : DEIB is new to my organization, and we are becoming aware of its importance
Compliant (32%): DEIB in my organization is focused on compliance with the US Equal Employment Opportunity Commission and other legal requirements
Tactical (16%): DEIB has been connected to business initiatives and outcomes in parts of the organization
Integrated (23%): DEIB is part of everything we do as an organization; we have both internal and external DEIB efforts
Sustainable (16%): DEIB efforts are best in class and remain strong over time as we continuously improve and evolve
According to this survey, nearly one-third of organizations are stuck in the compliant stage. Where in the DEIB stages do you consider your organization and where do you want to be? For each stage, there are key questions to ask yourself and actions you and your leaders can take to help your organization advance to the next stage.
3. Your Role Relative to the DEIB Stages of Maturity
By embracing DEIB, leaders can drive organizational growth and competitiveness with these steps:
Reflect on your DEIB Leadership
Educate Yourself on DEIB Issues
Practice Inclusive Leadership
Understand the DEIB Maturity Stage Your Organization is and Where You Want to Be
Set the Direction of Your Company Culture with Strong Leadership and Accountability
Lead by Example and Drive Action
Now what?
Developing a culture strategy today will position you and your organizations for future success. Here are key steps for you to consider:
Understand What Your Employees Value vs Their Pain Points
Advance or Sustain Your Organization in the DEIB Stages of Maturity
Develop a comprehensive strategy that includes both implementation and effective communication
Implement the strategy and evolve as circumstances evolve
Although there’s more to explore, and determining your organization’s stage in the DEIB maturity model may require additional reflection and evaluation, the purpose of this discussion is to encourage you to think about the actions you can take now to position your organization for success during the demographic drought. And, this is a good starting point. Book a free consultation if you are interested in learning more.
Access “Six Tips to Elevate Your Leadership & Retain Talent”, a free resource you can download from our home page and visit our Culture Corner page for access to all our newsletters. Until then, be well and keep shining!
We at Cultivate and Thrive empower women leaders to overcome obstacles by providing guidance on strategy and culture so that they gain clarity, work smarter, improve experience, and optimize their organization’s performance. Book a call so we can learn more about you and how we can elevate your organizational culture and performance.
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