Featured in today's briefing:

  • Lessons from a botched approach to handling societal issues.
  • Deskless workers are restless too.
  • The dimming outlook for office real estate.

The Virus

The latest virus forecast: The US had about 108,000 new cases reported on Friday, up 3% from the level two weeks earlier. The BA.5 subvariant of Omicron—which is more transmissible, including to those who previously had Covid—is contributing to a rise in cases and hospitalizations.

The business impact: Average hourly earnings increased 5.1% in June from a year earlier and non-manager wages jumped 6.4%. The private sector has now recouped all of the jobs lost during the pandemic, with 140,000 more people now employed than in February 2020.

Focus on State Farm As a Case Study in How Not to Navigate Societal Issues

State Farm, the insurer whose “Good Neighbor” campaign exudes unassuming friendliness, offers a case study in how to create a mess with your employees and with customers in a highly polarized political climate.

In late May, an organization called Consumers’ Research published an internal State Farm email encouraging its agents to engage in its partnership with The GenderCool Project, a youth-led advocacy group. The agents were given the opportunity to donate three LGBTQ+ books to their “local teacher, community center, or library of their choice.”

“State Farm is targeting your 5-year-old,” read the Consumers’ Research headline (the State Farm email discussed “conversations with children Age 5+”). The story was swiftly picked up by Fox News and the Libs of TikTok, the influential Twitter account that has emerged as a powerful force in right-wing media, and it wasn’t long before State Farm announced that it would no longer support the program.

“We do not support required curriculum in schools on this topic,” its statement said, adding that the company would continue to support organizations “that align with our commitment to diversity and inclusion.”

Consumers’ Research doubled down, demanding, among other things, a third-party audit of all State Farm’s programs geared toward children. GenderCool co-founder Gearah Goldstein says the State Farm fracas has triggered “an influx of new resources,” including support from “quite a few” State Farm employees. Others on the left said the about-face was proof that the company’s support of LGBTQ+ issues is purely performative. Through all of this, State Farm has continued to proclaim its support of the LGBTQ+ community. “Love is love,” it tweeted last month alongside a photo of a rainbow flag celebrating Pride Month.

Experts on corporate social responsibility described the situation as a disaster. “This is a company that has no clue who they are, and no strategy as to how to interact with society,” said Paul A. Argenti, professor of corporate communication at Dartmouth's Tuck School of Business who authored a Harvard Business Review article on when companies should speak up on social issues. A State Farm representative didn’t respond to a request for comment.

The challenges companies face in navigating social issues have only grown in our post-Roe v. Wade world. To understand the lessons organizations can learn from the State Farm situation, we reached out to Argenti and Alison Taylor, executive director of NYU Stern's Ethical Systems, who is writing a book on how businesses can do the right thing in a turbulent world. They offered these insights:

Prepare to stand your ground.

There’s no denying that corporate ESG goals are now a prime target in the GOP culture wars. If it isn’t State Farm versus Consumers’ Research, it's Disney versus DeSantis. “If you want to do something, look at the battle you are about to get into. Because whatever it is–the NGO, the Consumers’ Research–that group of people is going to come after you,” said Argenti. “Be prepared.”

Avoid knee-jerk reactions to news events.

Both Argenti and Taylor believe too many companies are issuing too many statements on too many causes that they can’t back up. A communications team may fire off a statement, for example, without examining their firms’ political lobbying activities (which may fly in the face of the stand). The result leaves employers vulnerable to criticism that their support is superficial and performative–and gives critics that much more weaponry to attack, leaving the companies, and the causes they care about, worse off.

“Some companies are using this ‘woke’ positioning as a branding exercise–they aren’t changing their political spending or what they’re doing–and this empty PR is exactly the problem,” Taylor said. “All it’s doing is further entering the destructive polarization spiral.”

Do the hard work of bringing different parts of your company together to identify those causes that truly reflect your organization.

Companies “need to get a group together to look at issues holistically,” Taylor said. “If you can’t act meaningfully, you can’t have your business speaking out. Get your ducks in a row.”

Is the issue “tied to your strategy, something legitimately important to your business? If the answer is ‘yes’, then you owe it to yourself to get involved and do something about it,” said Argenti.

You can’t have it all ways.

In announcing it was terminating its relationship with GenderCool while still touting LGBTQ+ issues, State Farm was “trying to still walk that fine line and pretend it’s all in, when in fact, it’s not when push comes to shove,” Argenti said. “That is the worst place to be in. You are in, or you are out. There is a special place in hell for companies unwilling or unable to take a legitimate stand and stick by it.”

What Else You Need to Know

The majority of US workers are worried about losing their jobs in a downturn. Some 78% of employees are concerned about job security should a recession hit, according to a recent survey from staffing agency Insight Global, while more than half say they either aren’t financially prepared or don’t know how to get there.

  • Their apprehension is well-founded: Nine out of 10 managers surveyed said they’d likely have to cut jobs in a recession. The survey also found that job-related anxiety is particularly high among women and millennials.
  • Forecasts from Bloomberg Economics put the likelihood of a recession in the next 12 months at 38%, a jump from 0% earlier this year, with a 72% chance that one begins by the start of 2024.
  • Meanwhile, 55% of US adults believe a recession has already arrived.
  • The country added 372,000 jobs last month, while unemployment stayed at 3.6%, indicators that a downturn may not be as imminent as many believe.

More employers are offering raises to retain employees amid rising inflation. Microsoft and PricewaterhouseCoopers are among the companies that have announced plans to boost employee pay. Others, such as ExxonMobil and Peloton, are offering one-off bonuses.

  • Nationwide, pay has gone up by 4.8% since the beginning of the year. Workers who stayed in the same role saw a median increase of 4.5%. For those who changed companies or moved to a new job within the same company, that figure was 6%.
  • Consumer prices rose 8.5% between March 2021 and March 2022, the largest increase in decades.
  • Some 42% of US adults say they’re currently struggling financially, with inflation and gas prices topping the list of financial stressors.
  • Research suggests that remote work may play a role in easing inflation. As more employees accept slower wage growth in exchange for freedom from an office, companies can save money, lessening the need for price hikes.

Deskless workers are having their own Great Resignation. Among employees whose work can only be done in person—a group that includes workers in construction, retail, and health care—roughly a third are planning to quit, or considering quitting, within the next six months, according to a recent BCG poll of workers across seven countries.

  • In the US, that figure is closer to 10%. Across the countries surveyed, Gen Z employees were the likeliest to report that they were thinking about leaving their jobs, at 48%.
  • The most common reason cited for potentially quitting was lack of advancement opportunity, followed by pay and desire for more flexibility.
  • Separate research has shown that for shift workers, having a predictable schedule can be a key driver of both retention and overall well-being. Currently, Oregon is the only state with a law on the books requiring employers to provide advance notice of scheduling, though several cities have enacted their own versions.

C-suites are becoming more politically polarized. More Democrats are clustering with Democrats, and more Republicans clustering with Republicans, according to a recent study by the National Bureau of Economic Research.

  • The study of over 3,700 executives found an 8% increase in political homogeneity, indicating that the growing tendency of Americans to connect with politically like-minded people extends to the highest-level decision makers at work.
  • For all the attacks on “woke” capitalism, the share of Republican executives in 2020 was 68%, up from 63% in 2008 (though down from 2016).
  • The spike in polarization among executives was more than double that of local registered voters during the same period.
  • The polarization may reflect the fact executives are matching up based on affiliation. Plus, “the political ideology of people seems to play a bigger role on how they think about their identity,” said one author.
  • Although political alignment at the top of organizations could allow for more efficient communication and execution, it will probably also limit perspectives of decision-makers.

A labor crisis in the caregiving industry is keeping women out of work. With demand outpacing supply for child and elder care, women are cutting back on their hours or leaving their jobs altogether to shoulder caregiving responsibilities for their families.

  • Compared to February 2020, there are roughly a half-million fewer care worker jobs in the US. Care workers have left the field in droves since the start of the pandemic, driven largely by low pay and a favorable labor market. In May 2021, the average yearly pay for a child care worker was $27,680.
  • Nearly a third of US nursing homes are currently short-staffed, while around half of child care facilities operated with staffing shortages last school year.
  • Two-thirds of caregivers in the US are women, and mothers left their jobs at higher rates in 2020 than fathers. More than a million women dropped out of the labor force in 2020 and 2021, many of them driven by the pandemic’s disruption to child care.
  • Katherine Gallagher Robbins, a senior fellow with the National Partnership for Women and Families, called the situation a “double whammy” in the New York Times, noting: “most of those workers are women, and most of the people who need those supports to enter the work force themselves are women.”

Return to workplace speed round:

  • More than half of executives in a recent survey of CEOs said they hadn’t yet gone back to the office full-time, with many citing convenience and the lack of commute as the primary factors keeping them home. Within that group, just 10% said they intended to eventually work in person five days a week.
  • Spurred largely by the looming threat of recession, 52% of companies intend to let go of office space sometime in the next few years, a jump from the 44% who said last year that they planned to downsize. Meanwhile, office landlords are anxious about the increasing likelihood of a drop in demand for their properties.
  • Many employees that have returned to an office are doubling down on workspace decor, with plants, photos, and mementos that make them feel more like they’re back at home.
  • A few months after CEO Thomas Gottstein called a full office return “unrealistic,” Credit Suisse employees say they’re being pressured to come into the office three days a week, with the company monitoring attendance.
  • Predictions that the suburban office park would withstand the pandemic better than the urban office have largely proven false, as work-from-home employees looking for a change of scenery flock toward the amenities of a centralized downtown hub.

Here are some of the best tips and insights from the past week for managing yourself and your team:

  • Decompress with a high-effort activity. It sounds counterintuitive, but physically and mentally demanding pursuits—like going to the gym or learning a new language—are more effective for recovering from workplace stress.
  • Try a ‘tactical’ meeting for greater efficiency. In this meeting structure, attendees quickly create a list of “tensions” that require collaboration or discussion from the group. Then, they dive into each tension, assigning action items to team members to move forward. The next tactical starts with updates on these action times before jumping into new tensions.
  • Boost retention with a temporary job-swap program. That might look like two employees trading positions one day a week for a quarter, or one person taking two weeks to rotate between different teams. These programs allow employees to gain new skills and explore other careers without the commitment of a permanent role shift—and reduce the likelihood that they’ll feel pulled to look elsewhere for a change.
  • Question yourself. Before giving a presentation, go through each section and brainstorm a list of potential questions that audience members might ask—everything from softballs to the most challenging questions you can think of. Then, draft your answers to include in presenter notes.

Coda

Remote work got a big endorsement in the Netherlands. Lawmakers in the Hague recently advanced legislation to make working from home a legal right.

  • If the law passes the Dutch Senate, employers in the Netherlands will be required to provide a reason if they reject an employee’s request to work remotely.

The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing by email.