The war for talent is raging on, with no end in sight, as available jobs continue to outpace people looking for work. Quit rates were at record highs of 4.5 million in March. Meanwhile, according to our recent research at Vistage, 65 percent of small to midsize business (SMB) CEOs plan to increase head count in the year ahead.

While technology is a bright light for business because of its ability to improve productivity and performance, the labor shortage has reinforced that people are the lifeblood of a company. In fact, Vistage's research shows 72 percent of SMBs believe hiring challenges are impacting their ability to operate at full capacity. The value of talent has skyrocketed because of scarcity, and employees have more power than ever before. As a result, retention has become the single most important data point informing CEOs' strategy.

Business leaders are faced with a variety of factors that are outside of their control (i.e., a global pandemic, international war, supply chain slowdowns, inflation, and even the labor shortage.) However, retention -- one of the most important and impactful considerations of all -- falls directly within every CEO's domain. Keeping top talent on staff is an invaluable recruiting tool, as well as the only way to truly win the talent war. While pay is important, it is not the end-all-be-all. Employee experience, or creating an environment that people want to work in, is the most holistic and effective way to approach retention.

Employee experience can be broken down into three entirely controllable elements: culture, workplace, and boss.

Culture

Culture has long been the CEO's responsibility, but it has become even more important, and even more challenging, amid the rise of hybrid work. A strong culture can unify employees whether they are in-person, fully remote, or somewhere between the two. A leader's most important job is embodying the culture they desire and pulling it through to the entire organization. Culture can stop an employee from applying elsewhere, and make a candidate choose one organization over another. It must be authentic, and it must come from the top down and be brought to life for the worker by their "boss."

Workplace

On the most basic level, business leaders must regularly invest in physical workspace. For in-person work environments, this means ensuring facilities reflect employees' evolving needs and desires, as well as offering tools and technology that increase employees' efficiency and productivity without friction. Beyond that, flexibility is the new black. Hybrid leaders are currently testing their flexibility formulas. As we settle into routine, flexibility will become custom-fit to each team's needs and responsibilities -- there is no one-size-fits-all solution to where and when all employees should work. For instance, individual tasks like writing, processing spreadsheets, and completing individual work are more productive when done from home, but collaboration, innovation, problem-solving, and team building are best suited for in-person. Additionally, hybrid leaders are now tasked with creating a seamless workplace that is uninterrupted when an employee works from home one day and the office the next. Ensuring employees are equally equipped at home and in the office will require fine-tuning over the next few years.

Boss

 People don't leave companies, they leave bosses. Bosses control and dictate their direct report's entire work experience: They build their job description, define their tasks and activities, measure their performance, and even charter their growth and salary. No one has greater influence over an employee's day-to-day experience than their boss. And no one's job has gotten harder as a result of the pandemic. With increased pressure to retain employees, the new boss is more than just a manager: They are a leader, creating their work group's vision and determining how that connects with the organization's overarching mission; they are a conduit of culture, disseminating it to their direct reports who may be any mix of remote and in-person; they are a coach, driving employee development on an individual basis. Bosses have become the most critical element of the employee experience. CEOs should ensure frontline bosses and managers are aligned with overarching strategy and goals by seeking transparent and open dialogue. Additionally, regular leadership development and training have become key determinants of an organization's ability to execute on employee experience.

As long as the talent wars persist, employees will have the upper hand in deciding whether to stay in a role or look elsewhere. If they determine the experience they are currently being offered does not suffice, they have more options than ever at their fingertips. CEOs who foster a superior employee experience stand to attract and retain top talent, despite external challenges or roadblocks. We can anticipate outside factors will continue to shake up the world of business for years to come. Controlling the controllable has never been a more imperative mandate for CEOs, and nothing is more controllable for the CEO than the employee experience they create for their workforce.