Featured in today's briefing:
- How economic uncertainty affects the war for talent.
- Results of a four-day workweek pilot.
- Treating meetings like science experiments.
The Macro Context
- With US Covid cases and hospitalizations on the rise, surgeon general Vivek Murthy warned that hospitals are straining to handle the influx in patients with respiratory viruses.
- Wages in November were up 5.1% from a year earlier, according to new data released by the Bureau of Labor Statistics.
- Overall unemployment stayed flat from the previous month at 3.7%. The unemployment rate declined to 3.9% for Hispanic workers and 5.2% for Black women, down from October’s numbers of 4.2% and 5.8%, respectively.
Focus on the State of the War for Talent
“The war for talent is over. Talent won,” Tim Ryan, US chair of PricewaterhouseCoopers, said recently at the CNBC Work Summit. As an economic downturn, waves of layoffs, and return-to-office mandates change the way many organizations are approaching their talent strategies, we reached out to Ryan to learn more about whether that statement holds. Here are excerpts from our conversation, lightly edited for length and clarity:
You said that talent has won the war. Can you unpack that a little bit?
The world has fully changed with the pandemic, but it's important to realize the world was already changing prior to the pandemic. We are an aging population here in the United States, and we continue to see shrinkage in the full-time workforce. We also see declining college enrollments happening across the United States. And immigration has been in many ways significantly diminished, if not shut off. So when you look at those three factors, they all point to the fact that talent will be short.
And then on the flip side, we see significant growth in the US economy, albeit a little slower than we have before. I'm not saying globalization is dead, but we're seeing more onshoring and we are seeing significant inbound investment into the United States of the world's capital in important areas like fintech, clean tech, climate, health tech, all of which will create jobs. So when we look at just those big fundamentals—aging population, no immigration, the strength of the US economy, a record number of startups in important societal areas like climate and healthcare—it points to a very, very robust opportunity for talent.
Then you overlay the fact that what Covid did, for many people, is give us a sense of what life could be and should have been. We know that if people aren't happy at work, they're likely not going to stay at that place. Or they're going to stay but not be committed, not do great work for customers or clients or produce a great service or a great product. The basic thing we learned in our days in college is the law of supply and demand, and the good news is we have a lot of demand for talent. And unfortunately, given aging and immigration, the supply is down. Anybody who wants to think differently, the numbers and the macros are right there for us.
So one of the big reasons we believe the war for talent is over is they hold all the cards right now. It's up to us to treat talent the way we treat our customers and clients and give them an amazing experience. And the belief in doing that is that they will do much better work. If we create a work environment for people where they feel they can be themselves—and not this rigid 40-hour corporate world that we all, frankly, just grew accustomed to—the business community has a better chance to continue to thrive.
Does an economic downturn affect that power balance?
At the end of the day, when you look at the basic overall medium-term to long-term strength of the US economy, I don't see a slowdown changing it. I've said very clearly that at PwC, we do not believe we are one good economic downturn from getting the power back. We believe that this war for talent will be present the rest of our careers. We look at things like climate, energy transition, modernizing healthcare, the world moving to the cloud. Business is reinventing itself. Those are all going to happen irrespective of whether we're in a strong, moderate, or weak economy. We've never been faced with these big societal challenges before, which will drive demand for talent. The economic slowdown is important, we all have to pay attention to it, but I don't think it changes the hypothesis and thesis that we have.
The question is who's going to win? And we would hypothesize that those who will win will be the ones who can inspire and lead the tens of thousands of people on that journey. It won't be that those who have people show up to the office. The skill sets in the c-suite are different. There's a time and place for every type of skill set, every type of leader. There's a time where you need a hardcore leader. There's a time where you need a marketing visionary or a growth visionary or finance visionary. What is clearly needed right now is those who can inspire change.
I think with showing up to the office, you can win the battle and lose the war. The war is, how are we going to lead people on these transitions and do it in a way that creates value for investors and value for customers? Our fundamental belief is if people are feeling more fulfilled and happier about themselves, our clients win. You cannot serve clients if you have people who show up who are—the analogy I use is, I don't know if you've ever seen “Finding Nemo”, but I have six children, I've seen it a hundred times. But like those gray fish just swimming in the harbor. The workforce can't be a bunch of gray fish just swimming in the harbor. We've got to inspire them and create environments where they want to go serve that customer well.
What are the most important traits a leader needs to accomplish that?
Humility is one. The biggest risk leaders have is that we unintentionally get out of touch. What is the customer experience really? What is the employee experience really? The humility to know that you can't get out of touch like that. And the self-awareness that you could be out of touch, because the schedule is so demanding for leaders that you run that risk.
The second one is to remember what got them excited when they were growing up in whatever organization they're in. Most of the time what people get excited about is when someone made them feel good, when someone taught them and someone mentored them and someone helped them in a time of need.
The third one is to keep up with studies and reading and psychology and evolving research. It's the humility to know that you never stop learning. And clearly modern research clearly shows that what people want from work has changed and how people get motivated changed.
And I think you need a skill set to really be able to manage multiple stakeholders. I just did a session yesterday with a group of CEOs and I said, ‘With all due respect, 10 years ago, five years ago, you had three stakeholders. You had customers, employees, and investors. It was easy. Today you've got multiple multiples of that in terms of numbers of stakeholders.’ The skill set to know how to deal with it is not a set most of us roll out of bed and are born with. It's a skill set that has to be developed.
Maybe the biggest one is patience. It doesn't come easy. Yelling and telling doesn't work anymore. It might work Monday and get you to Wednesday, but it's not going to get you a decade-long run of that type of work environment. We know that.
What Else You Need to Know
Business leaders don’t know where their teams will be working one year from now, according to Charter’s research. In our recent survey of 507 US-based CHROs, CEOs, and CFOs, Charter researchers Emily Goligoski and Melissa Zwolinksi learned that only one-third think their organization’s current arrangements will hold over the next 12 months.
Other findings from the survey, which our research team unpacks in more depth here:
Almost all the employers in a large-scale pilot of the four-day workweek are keeping the shortened schedule. The six-month trial, run by the advocacy group 4-Day Workweek Global, included 33 employers in the US, Ireland, New Zealand, Australia, and the UK, covering nearly 1,000 employees. Of the 27 employers who filled out a survey at the program’s conclusion, 25 said they were definitely continuing or planning to continue working four-day weeks, while one said it was leaning yes and one was unsure. None reported any plans to return to a full five-day week.
- Other survey data from the program found self-reported improvements in employee performance, along with increases in physical and mental health and work-life balance, while stress and burnout decreased. Overall company revenue increased by around 8% over the course of the six-month trial.
- 4-Day Workweek Global is currently running the world’s largest trial to date of a four-day week, with 3,300 employees across 70 companies.
The number of stay-at-home dads is increasing. The number of men who have left the labor force to take on caregiving responsibilities at home full-time is at an all-time high, according to some measures.
- A Pew Research Center survey found that there are some 2.1 million stay-at-home dads in the U.S., comprising 18% of all stay-at-home parents, compared to 10% in 1989. One fourth of stay-at-home dads who responded to the Pew survey cited caregiving as the main reason they had left the labor force.
- The rise of full-time parenting among fathers is occurring amid a larger trend of declining labor force participation among men in their prime working years, driven largely by a shrinking number of jobs in traditionally male-dominated sectors and lower educational attainment by men, among other factors.
Only a third of employees believe that they are compensated fairly. According to a new Gartner survey of 3,500 employees, only 32% of respondents think they’re paid fairly for their work, and 34% believe they’re paid equitably in relation to their colleagues.
- The study’s authors recommend increasing communication and accountability related to pay equity as a way to increase employee trust.
- For best practices surrounding developing fair compensation strategies and a pay equity communication strategy, download Charter’s Get Your Organization Ready for Pay Transparency: A step-by-step guide.
The Labor Department has made it easier for 401k plans to include ESG funds. The new regulations reverse a Trump-era rule that made it more difficult for 401k sponsors to consider climate change and other environmental, social, and governance factors in determining investment offerings.
Return to workplace speed round:
- New data from collaboration platform Kadence adds to the growing list of evidence that Tuesdays, Wednesdays, and Thursdays are the most popular days for workers to come into the office.
- Starting in February, all Snap employees will be required to work in the office four days a week, a move CEO Evan Spiegel says will help the company achieve its “full potential.”
- Demand for work-from-home jobs currently exceeds supply, with an average of two active applications for each remote position posted on LinkedIn. (For comparison, the numbers are reversed for in-person jobs, with two openings for every applicant.)
- Between January 2020 and December 2021, the conversion of office buildings into residential buildings led to the creation of some 11,000 rental apartments in the US.
- Some finance employees are ignoring return-to-office mandates, according to a new survey by Women in Banking and Finance and the London School of Economics and Political Science.
Here are some of the best tips and insights from the past week for managing yourself and your team:
- Instead of asking yourself if you can fit in a new project, ask yourself if you have what you need to get it done well. Adding this extra guardrail helps protect against the overload that leads to decreased job performance and mental health.
- Treat your meetings like science experiments. Play around with different tools, check-in and check-out rituals, and documentation systems, or try moving around the day, time, or format (virtual or in-person) to unlock new ways of making meetings more productive and engaging.
- Build in delays between ideas, decisions, and actions. Use that time to collect feedback before executing your plan, which ensures that your next move will be more rigorously vetted.
- Normalize small breaks throughout the day. Just as team leaders should model unplugging for longer stretches of time away, they can promote the habit of taking quick refreshes as needed. Next time you step away for a coffee run, a stretch, or a midday catch-up call to a friend, share that update with your colleagues to encourage them to do the same.
A cautionary tale about mandatory workplace fun. Earlier this month, a judge decreed that the French consultancy Cubik Partners had wrongfully fired an employee for not embracing the company’s self-described “fun” culture of heavy drinking and inappropriate behavior.
- An alternative fun activity: winning 3,000 euros in damages from a toxic employer, as this worker did.
The exact amount of exercise needed to counteract a sedentary workday. Around 30 to 40 minutes of moderate activity can balance out the negative health effects of sitting all day, according to recent research in the British Journal of Sports Medicine.
- That’s three 10-minute walks or movement breaks throughout the day—and then when the time comes to shut down for the night, you can curl up on the couch in peace.