A New Industrial Revolution May be Hitting the Reset Button on Work
The endgame of the pandemic is giving both employers and workers a chance to create a more humane relationship — both in the office and out of it.
The big picture: Companies need workers, but many employees aren't ready to go back to the way things used to be. A hybrid setup could provide the best possible way forward, if both sides are willing to give.
What's happening: As the most acute stage of the pandemic draws to a close, American companies face a new challenge: getting workers back to work.
- There were 9.3 million job openings in April, the highest level since at least 2000, while the number of resignations and layoffs reached record highs and lows respectively.
- Wages are rising, and companies are offering everything from educational assistance to free appetizers to get potential employees to sign on. But millions of unemployed workers are holding back, while millions more who are employed are eyeing the exit signs.
Between the lines: The primary conflict — and the primary opportunity — is in where work will take place: in the office, at home or somewhere in between.
- While the pandemic demonstrated that white-collar productivity, for the most part, could be maintained remotely, with a few exceptions most companies are pushing for at least a partial return to the office.
- Workers appear to be significantly less eager. 64% would pick permanent work from home over a $30,000 raise, according to a survey last month by the professional network Blind of employees at 45 of the largest companies in the U.S.
What they're saying: "This is our new industrial revolution, equivalent to when everyone was moving off the farms and into the cities," says Kristi Woolsey, associate director at the consultancy BCG.
- "We're not going back to the way things were, and companies know that if they want to attract the best and the brightest, they're going to have to offer a level of flexibility that they didn't beforehand."
Be smart: It's not that white-collar employees hate the office or have fallen in love with working out of spare bedrooms and off kitchen tables during the pandemic.
- But workers absolutely hate commuting — it's ranked as the least favorite daily activity overall — and they've come to value the control that the option of remote work gives them over their lives.
- "It used to be that you fit life into work," says Kate Duchene, the CEO and president of the global human capital company RGP. "Now it's the opposite — how do you fit work into life?"
What to watch: How companies handle both current and prospective employees who say they value flexibility above all.
- A hybrid setup — where workers come to the office at most a few days a week — offers the best opportunity to provide flexibility on both sides.
- Yes, but: As Microsoft CEO Satya Nadella wrote recently, "Everything becomes more complex, not less complex, in hybrid work."
- Out are the ping-pong tables and free kombucha of the pre-pandemic times, says Matt Watson, CEO and co-founder of the benefits management company Origin. Instead, "companies are looking to offer benefits that directly impact a worker's life" outside of the office.
What's next: Sheer demographics mean that U.S. workers could find themselves with unaccustomed leverage for years into the future.
- Population growth for Americans 20 to 64 turned negative last year for the first time in U.S. history, while the Congressional Budget Office predicts that the potential labor force will grow for the 2020s at roughly half the rate it did from 2000 to 2020.
The bottom line: It's been a very long time since U.S. workers held this much leverage, and that could help shape some better compromises in the work world.
If you would like to discuss any of these issues further and examine how they may impact your workforce, we would love to talk with you - give a call.
