THE GROWTH EDGE
The Strategy Edge
People Strategy for Organizational Leaders
July 2026 • Issue #4
A founder told me last month that he’d just lost his head of sales — his second in two years. “It’s the comp,” he said. “We can’t compete with what big tech is paying.” I asked him a few questions about the role, the manager, and the career conversation. The first one had never been redefined since the company doubled. The second was the founder himself, and they hadn’t had a real one-on-one in six weeks. There hadn’t been a career conversation in either tenure. The comp wasn’t the problem. It was the explanation, which is a different thing.
This is the pattern I keep coming back to. Companies attribute regrettable losses to compensation because it’s the cleanest story — a market force, something you could only fix by spending more. The research, including SHRM’s just-released 2026 Talent Trends Report, points somewhere else. Retention difficulty is up. Recruiting is harder than it was a year ago. The skills companies most need (judgment, decision-making, complex problem-solving) are the ones hiring managers find hardest to evaluate. None of those problems get solved by a comp adjustment. All of them get solved by better systems and better managers.
Last month’s posts covered both sides of that equation: why your best people are actually leaving (it’s not the money), and what a real structured hiring process looks like. This issue ties them together and pulls in the latest data on where companies are losing the talent war — quietly, and largely on their own.
What We Published Last Month
The Real Reason Your Best People Are Leaving (It’s Not Compensation)
The departing employee took a better-paying job. That’s true. But why were they open to the recruiter’s call in the first place? This post lays out the three real drivers of regrettable turnover — manager quality, career visibility, and trust in leadership — and walks through why exit interviews structurally fail to surface them, why stay interviews work better, and why counteroffers usually don’t stick. If your CEO’s working theory of turnover starts and ends with comp, this is the one to forward.
Read it: The Real Reason Your Best People Are Leaving →
Recruiting Is Broken: Building a Hiring Process That Actually Works
Unstructured interviews predict job performance at about 0.14 on a scale where 1.0 would be perfect prediction — barely better than a coin flip. Structured interviews come in at 0.55 to 0.70, roughly twice as effective. The gap isn’t talent. It’s design. This post walks through what “structured” actually means (it’s not a script), the three highest-leverage changes most growing companies can make to their hiring process, and the four objections that get in the way — with the counter to each.
Read it: Recruiting Is Broken →
Worth Knowing: What the Research Is Saying
SHRM, 2026 Talent Trends Report. Surveying over 2,000 HR professionals, SHRM found that 42% of organizations now report difficulty retaining full-time employees, nearly 70% still struggle to recruit them, and 80% say the hardest skills to find are systems and resource management capabilities — judgment, decision-making, complex problem-solving, and time management. SHRM’s bottom line is striking: “Organizations cannot hire their way out of today’s talent challenges. They must redesign how they find and build talent.”
The strategic implication is the one most growing companies haven’t internalized yet. If the skills you most need are the ones the market can’t supply, then your competitive advantage isn’t who you can attract — it’s who you can develop. Job rotation programs, for instance, are rated 93% effective at addressing talent gaps but used by fewer than 25% of HR professionals. The companies that get good at building talent rather than buying it are the ones that will pull ahead in this market.
SHRM, Recruiting Executives Priorities & Perspectives 2026. Among 298 heads of recruiting surveyed in early 2026, 46% identified labor market competition as a top challenge, and 42% pointed to talent shortages. But here’s the surprising data point: recruiter talent development — a priority for 10% of recruiting leaders in 2025 — fell completely off the list of top priorities in 2026, to 0%. Recruiting teams are being squeezed alongside the broader workforce, and the people responsible for finding talent aren’t being developed themselves.
If your recruiting function is under pressure, that’s a leading indicator worth watching. The recruiter shortage is happening on the same curve as the broader talent shortage, and it tends to show up first as longer time-to-fill and lower-quality hires. The fix isn’t necessarily more recruiters — it’s a better-designed process (the case I made in last month’s recruiting post) and stronger hiring-manager capability so the function doesn’t depend on a heroic recruiter to compensate for poor interview design downstream.
SHRM, Talent Management Executives Priorities 2026. 51% of employees say they are at least somewhat likely to leave their employer within the next year if the organization doesn’t address their needs effectively. And 46% of leaders cite leadership and manager development as a top priority for 2026 — up significantly from prior years. Employee engagement is now the top issue workers want HR to prioritize, with benefits as one of the most visible signals of whether the company actually cares.
This is the data that ties the month’s posts together. Retention is being driven by management capability and the day-to-day employee experience, and leaders themselves know it. The companies investing in manager development now are getting ahead of a curve that the rest of the market will be paying premium consulting rates to catch up on in 2027. Manager training cuts active disengagement roughly in half — there isn’t another single investment with that kind of return.
Resource Spotlight
First 90 Days as HR Leader. What to assess, who to talk to, and what to build first when you’re the first — or newest — HR leader at a growing company. Useful both for the HR leader stepping into the role and for the CEO trying to figure out what to expect, what to ask for, and how to set the new hire up to succeed rather than absorb every people problem that doesn’t have an owner.
Get the First 90 Days as HR Leader playbook →
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