Issue #88
#88 - The Employee Power Surge ๐Ÿ”Œ Continues
October 20, 2023


Distinguishing the signal from the noise requires both scientific knowledge and self-knowledge: the serenity to accept the things we cannot predict, the courage to predict the things we can, and the wisdom to know the difference. -- Nate Silver


The "future of work" can be an awfully noisy -- even scary -- place. Just look at these recent headlines, plucked from Fortune, the Wall Street Journal, and the NY Times:

But alas, your faithful TalentStories curators cover work with neither fear nor favor. We just want it to get better.

We're also 88 issues into writing this newsletter, we have a thesis -- and we are sticking to it:

There is an intergalactic battle for power being waged between employers and employees right now. The cause? A revolution in the way we work; a sea change that kicked off during the pandemic but is rooted in a much deeper-seated and longer-running distrust of the fundamental work equation: come to the office, work hard, stay loyal, retire.

If you've followed the news, you'll know that over the past year, different phenomena were meant to bring employees to heel, and swing the power pendulum back to employers: inflation. Interest rate hikes. Layoffs. Recession. Return to office mandates.

At each stage, as each lever was wielded, we were skeptical. But we gave each the benefit of the doubt. After all, we're just watching and observing! We don't have PhD's, run research studies, or work at the Federal Reserve. Maybe layoffs would spread beyond the headline-grabbing cuts in big tech; maybe interest rate hikes would cool off the red-hot labor market; maybe CEO's arm-twisting would have us all commuting five days a week to the office again?

But here's the thing, folks: it's still not happening. The fundamental work equation is still not balanced. Workers still haven't fallen into line.

And the fact that they haven't is not just proof of the change that's afoot. It's an indictment of the degree to which modern work is broken; a measure of employees' dissatisfaction with it; and a sign of the diminished friction to exploring alternatives to it.

And today , we bring 3 Stories that make us want to triple down on our thesis:

๐ŸŽฏ Story #1 - We look at cold, hard data: the latest remote work data from one of the leading experts on the topic, and a more sobering set of data on employee satisfaction, help set a baseline for where we're at at the end of 2023. ๐Ÿง

๐ŸŽฏ Story #2 - BlackRock looks after $9.4 trillion -- yes, trillion, with a t -- in investment assets. And per its mid-year report, one of the five 5 "mega forces" driving its investment thesis is demography -- and the transformative effect that shrinking populations will have on the way firms hire and retain talent. โœ…

๐ŸŽฏ Story #3 - A tech CEO spoke about the need to treat people as humans with agency, not as resources to be controlled. His simple statement making big "news" is a reminder of how rarely we see this kind of language. But we use the quote to draw a line in the leadership sand, and ask whether his take shouldn't become more of the norm, in light of Stories 1 and 2. ๐Ÿ™Œ

Thanks for reading and exploring with us -- and have a great end to your week!

Aki + Usman




#RemoteWork #Data


Nicholas Bloom is a professor of economics at Stanford University. He's also a widely-cited remote work expert who puts out some of the most data-driven updates on the trend. In an op-ed this week entitled "The Five-Day Office Week Is Dead", he wrote in the NY Times:

Working from home is here to stay. I can prove it with data โ€” lots and lots of data showing that returning to the office (R.T.O.) is D.O.A.
A telling data point is the number tracking how many Americans swiped and tapped electronic cards to gain entry into their offices. This month, occupancy rates were at 50 percent of February 2020 levels. That is shocking โ€” only half as many days are spent in the office compared with prepandemic times.
That number has flatlined not only in office buildings in San Francisco and New York but also in workplaces in Atlanta; Charlotte, N.C.; Dallas; Denver; and Philadelphia. Blue and red, inland and coastal, Northern and Southern workers...have quietly united behind work-from-home habits throughout 2023.

Meantime, HR software maker BambooHR surveyed 57,000 different employees at 1,600 companies between June 2020 and June 2023, and reports this steep drop in employee satisfaction:

Elsewhere in the report we learn that over the past three years: "Employee sentiment has declined at a rate 10 times faster than the three years prior."

BambooHR's head of People, Anita Grantham, explains that macroeconomic uncertainty is affecting how people are feeling:

"There's a general sense of uneasiness โ€” whether it's the rate of inflation, rounds of layoffs, uncertainty with return to office, hybrid or remote work policies, and the isolation that comes with it, plus the most recent wave of COVID, a lot is happening right now to make [employees] feel gloomy."

The two studies combine to paint a real-time picture of employees who continue to work remotely, on the one hand; but also report plummeting levels of dissatisfaction, on the other. ๐Ÿ˜ฎโ€๐Ÿ’จ One take is that the steep decline in satisfaction we see in the graph, between January and June this year, coincided squarely with the recent return to office push.

A more optimistic one? To the extent remote work is causing some of the dissatisfaction, it could be that a lack of clarity around remote work policy is partially to blame. And that as we get deeper into remote work, and better at working remotely, we'll define our policies with less ambiguity, and learn to better connect with one another and our organizations.




#Demography #ShrinkingSupply #Retention #Growth

This graphic ๐Ÿ‘†๐Ÿป is from BlackRock's 2023 Midyear Outlook report. It shows a striking contrast between the shrinking work populations of China, Europe and Japan, with the growing work populations in India, lower-income countries (and to a lesser extent, the US).

But it is BlackRock's take on the implications of these growth rates that is especially interesting, and relevant to our exploration of how work is changing:

The shrinking supply of workers in several major economies due to aging means a low unemployment rate is no longer a sign of the cyclical health of the economy. Broad worker shortages could create incentives for companies to hold onto workers, even if sales decline, for fear of not being able to hire them back.

Keep in mind that this is a firm whose entire reason for being is to maximize ROI. BlackRock is the biggest asset manager in the world, and it is saying that it now expects to see companies hold on to employees -- even during downturns -- rather than face the long-term struggle and cost of re-hiring them. And even if it means lower margins in the short term.

Coming from BlackRock -- and given its $9 trillion in assets and clout -- this feels like a rather transformative statement. ๐Ÿคฏ It would mean a huge adjustment to the traditional signals investors use, based on the belief that firms will need to radically change the way they manage their teams going forward.



#Leadership #HumanResources #DecisionTime #SmartBusiness

In a world where employees are "human resources" to be allocated, the way we allocate cash on hand, or machines in a manufacturing plant, Dropbox CEO Drew Houston offers a refreshingly different approach. For Drew:

Your employees have options. They're not resources to control. Trust people, and treat people like adults, and they'll behave like adults. Trust, over surveillance.

We all have a choice to make as to how we'll lead against the backdrop of the trends in Stories 1 and 2: either continue to operate under an outdated model in which employees are cogs in the machine; or adopt a more progressive approach that recognizes the agency of our teams, and the leverage they now possess.

In the context of those same trends, it's also worth pointing out that Houston's approach isn't just about doing the right thing for people; it's also about ensuring the sustained success of his company. It's not just kind; it's also smart business. ๐Ÿ™Œ

Thanks for reading. ๐Ÿ™

Work moves pretty fast. If you don't stop and look around once in a while, you could miss it.
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