Featured in today's briefing:
- A model for public-private partnerships in child care.
- A generative-AI boost in productivity.
- Managers’ role in providing mental-health support.
The Macro Context
- CEO turnover last year hit a five-year high, according to a Russell Reynolds analysis, driven largely by two factors: Chief executives who steered their organizations through Covid may now feel better about stepping down in a relatively calmer moment, and a growing number of boards are looking for a leadership shakeup amid changing strategies.
- The Conference Board’s consumer confidence index, which tracks public perceptions of the economy over the coming six months, fell in April to the lowest point since last summer.
- US wages in March were up 5.1% from a year earlier, countering experts' predictions of slower growth and hindering the Federal Reserve's efforts to curb inflation.
Focus on a New Model for Addressing the Child-Care Crisis
The national child-care crisis is taking a toll on workers, their families, and employers every day—as Americans struggle to find and pay for care for their kids to be able to work.
Some individual businesses have stepped in with subsidies and services for their staff. But the national scale and severity of the crisis also show the clear need for public-sector support as well. To that end, president Biden’s executive order this month targeting child-care affordability and accessibility is a move in the right direction.
A pilot program in Michigan called Tri-Share is also worth closer examination. That public-private partnership splits the cost of child care equally between the family, the employer, and the state of Michigan.
We reached out to Cheryl Bergman, CEO of the Michigan Women’s Commission, which administers the program, to talk about how Tri-Share might be a model for more broadly addressing the child-care crisis. Here is an excerpt of our conversation, lightly edited for length and clarity:
How did the idea for Tri-Share originate?
It started with the Grand Rapids Chamber of Commerce. A few years before the pandemic shut us down, a group of community leaders, business owners, and a state representative came together and started talking about the issue of child care. Employers identified child care as a major barrier to employment for families. And so they asked, ‘How do we solve for this?’ and started formulating the idea for a public-private partnership. Once the pandemic hit and illuminated the child-care challenges that we have, the representative introduced legislation to fund the pilot, and we launched the Tri-Share pilot program in March 2021.
The Women’s Commission had just come off a state-wide listening tour that ran from late 2019 to early 2020. We traveled the state with the governor, talking to women around the state about their priorities. And they were all economic security issues: paid leave, pay equity, a pathway to higher-wage jobs. And at the top of the list, everywhere we went—it didn't matter if it was a rural area, urban area, suburban area—was affordable, accessible child care.
What was the advantage of bringing in the public sector to lead and administer the program?
Traditionally, child care has just not been a focus for employers. They’ve said, ‘Families, you’re on your own.’ I'm thinking back to my own early career, when I had young children. The idea that my employer would help out wasn’t even a thought I had. I just handled it all. It’s almost like employers needed a public partner in order to get in the business of helping with child care at all.
Employers now are starting to see that many women are saying, ‘Screw it. It’s not worth it to work. I can't afford it.’ For many women, it makes more financial sense to stay home with a child than to work and spend all of their money on child care, and a lot of them are making the decision to leave the workforce and stay home instead.
Many employers have tried to make child-care investments on their own. Across Michigan, some do have their own child-care facilities on their premises. But for many employers, once they start digging into offering on-site child care, they start running into problems like legal liabilities and the cost. Even our hospital here in Lansing used to have on-site child care but has since stopped doing it for those reasons.
When the public sector gets involved, we can alleviate some of the administrative burden for both employers and child-care providers. Under Tri-Share, it’s on one of our 13 regional facilitator hubs to recruit the employers; help the families find licensed child care, whether in-home or center-based; collect the payments from the employer, the employee, and the state of Michigan; pay the providers in a timely fashion; and collect all the data that we need to continue evaluating and tweaking.
What has the impact of the program been like so far?
We hired an outside firm to do an evaluation of the pilot program, published at the end of last year. In those three regions covered under the pilot, employers reported that retention increased by 80%.
We had one mid-sized manufacturer over in the Great Lakes Bay region who had really high turnover, and as soon as they started offering Tri-Share, their turnover pretty much just stopped.
Read a full transcript of our conversation, including more on employers’ response to Tri-Share and the relationship between economic development and child care.
What Else You Need to Know
New research finds that generative artificial intelligence in the workplace can boost employee productivity. Customer-service workers who used an AI assistant on the job were able to move through their work 14% more quickly, on average, according to a National Bureau of Economic Research working paper.
- Among lower-skilled workers, the use of AI increased productivity by 35%. The researchers posited that employees in this group saw greater gains because of the tool’s ability to capture and disseminate the knowledge of more experienced and higher-performing employees.
- The implication is that lower-skilled workers will be increasingly valuable to their employers when aided by this technology, narrowing the productivity gap with their higher-skilled colleagues.
- A separate March working paper by MIT graduate students similarly found that using the generative AI tool ChatGPT benefited lower-performing workers more than their higher-performing peers. They also found that “exposure to ChatGPT increases job satisfaction and self-efficacy.”
- More than 60% of US employees believe the use of AI in the workplace will have “a major impact” on workers, but just 28% believe they personally will be affected by the technology, according to a new Pew report. (Goldman Sachs recently estimated that roughly two-thirds of US occupations could be at least partially automated by AI.)
In high-paying jobs, tenured employees often make less than their newer colleagues. Competition for talent has led to increased wage compression—the phenomenon in which employees with differing levels of experience and skill make very similar amounts—in some roles, according to a new report from the workplace-equity platform Syndio. Newly hired workers out-earn more seasoned ones in 30% of job categories where pay is more than $125,000.
- The analysis, which encompassed more than 1,700 different job categories, found that a longer time spent in a job is linked to higher pay in just under half of categories.
- As more employers adopt transparent pay policies, the report cautions, this wage compression will likely cause tension among more experienced workers if left unaddressed. You can read Charter’s pay transparency playbook, produced in conjunction with Open Comp, for a guide to creating and communicating a cohesive compensation philosophy.
Remote work is associated with declining levels of feedback for younger employees. After studying interactions between engineers at a technology firm, researchers found that junior engineers working remotely received fewer comments on their code, especially female engineers.
- The working paper, written by economists from the Federal Reserve Bank of New York, the University of Iowa, and Harvard, found that remote work was associated with higher productivity for senior engineers.
- Leaders can encourage continuous feedback even in remote settings using tactics like establishing a regular one-on-one meeting cadence between managers and direct reports and building high quality mentoring programs, which can be successful even in remote environments.
Return to workplace speed round:
- Some urbanists are encouraging cities to merge economic development and tourism departments to woo both visitors and new remote-working residents in a unified strategy.
- Sunbelt cities like Phoenix, Atlanta, and Austin are seeing a slowdown in their office real-estate markets, with slower growth in rental rates and increasing availability of subleased space.
- Some 115,000 Canadian civil servants remain on strike to secure a permanent right to work from home, along with higher wages, contracting regulations, and seniority protections during layoffs
Here are some of the best tips and insights from the past week for managing yourself and your team:
- Build your requests around options. To get a colleague to buy into a task you’re putting on their plate, give them a choice around which element of it to own. For example, you’re planning a team-bonding event: Would they rather be in charge of snacks or coordinating transportation?
- Use polling in hybrid meetings. To ensure that in-person and remote attendees have equal opportunity to weigh in, pose questions to the group and use the polling function on your videoconferencing or internal-messaging software to capture everyone’s answers in one place.
- Define the limits of emotional support. Without clear boundaries, workplace conversations around mental health can snowball into ill-equipped managers playing therapist to their employees. To avoid this scenario, train managers to guide the members of their team to available resources, such as mental-health services included in their benefits, as needed.
- Deepen your expertise with AI in mind. Make your career more resilient to widespread adoption of generative AI by positioning yourself as a subject-matter expert with the experience and knowledge to fact-check and build on AI-generated responses.
The coffee break gets a makeover. As inflation drives up the price of a cup of coffee, Gen Z employees are turning to a more wallet-friendly alternative for their midday caffeine jolt: the Diet Coke break.
- Some younger workers also view the Diet Coke break as a direct descendent of the smoke break, which is disappearing due to inflation and changing social norms around cigarettes. Smoking breaks are “not a great vibe for the office,” one employee told Fortune. “But Diet Coke you can sneak into your workday.”
A victory, sort of. It’s only within the last few years that female CEOs in the S&P 500 have begun to outnumber chief executives with any single male name—such as “John”—a new Bloomberg analysis finds.
- Encouragingly, the same group of CEOs now contains more name diversity across all genders than ever before, driven in part by an increase in non-Western names among top business leaders.