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Getting from the Great Resignation to the Great Return
It’s a job seeker’s market.
Over 47 million Americans voluntarily left their jobs last year, almost 13% more than in 2019. That was before the pandemic, which has upended the relationship between workers and employers as much as it has disrupted all our lives.
It’s not just a US phenomenon. High turnover rates extend across comparable OECD economies. Nearly a quarter of Brits and a third of Australians plan on switching jobs in the next several months.
The picture is somewhat different in the developing world. Hundreds of millions of people who lost their jobs during the pandemic — mostly in the informal economy — still can't find work because COVID obliterated entire industries such as tourism. Chinese companies, meanwhile, are struggling to retain young employees who are fed up with low pay and long hours.
The Great Resignation is thus a global problem, in varying ways, as will be the Great Return. With the omicron scare easing in the West, many companies there have begun trying to figure out how to woo millions of now-remote (or recently resigned) employees back to the office — precisely at a time when it’s gotten harder to find and retain talent.
Here are three ways employers might have success.
The most obvious fix is to raise salaries. That’s already happening for some. US wages grew on average 4.5% last year, the highest annual rate in almost 40 years. But with US inflation currently at 7.5%, that annual bump is actually a pay cut in real terms, and higher salaries won’t entice everyone.
What’s more, upward pressure on salaries is likely to contribute to even higher inflation.
Another option is additional benefits for employees, especially those who feel more productive working from home and see little upside to returning to the office. Many companies have already adopted permanent hybrid schedules, with workers coming in twice a week.
But some CEOs want everyone in the office five days a week. They just don't get it, US organizational psychologist Adam Grant toldGZERO World. Grant argues that worker productivity “is about the purpose and the process that you bring to your job (...) not about the place you happen to be doing it in.”
Apart from going hybrid, governments are increasingly backing experiments such as four-day workweeks to deliver more work-life balance. This approach has already been tested — with varying degrees of success — in Iceland, Spain, and it will soon be trialed in England.
Finally, companies that struggle to find talent where they’re based might opt to find it elsewhere — including overseas. That means more people working remotely from other US states or even abroad, which could have big political implications.
Imagine all those American manufacturing jobs that went to Mexico thanks to NAFTA, or to China after Beijing joined the WTO. This time, though, US labor outsourcing would hit the laptop class — the one that has benefited the most from globalization and a digital-first world.
As Eurasia Group CCO Alex Kazan points out on the Living Beyond Borders podcast, a post-pandemic hiring spree of remote labor from low-income countries could be politically toxic amid the surge of nationalism and protectionism we've seen in places around the world. But if done right, it could also be viewed as an expansion of a flexible gig economy that can spur greater inclusion in a global workforce.
“We're still a long way away from a global labor pool, but certainly the normalization and acceptance of technologies that enable remote work make that a more plausible future,” Kazan says.
Meanwhile, WFH is not going away. If companies in advanced economies want to lure their employees back to the office, most firms will need to reshape workplace culture to embrace remote working and hybrid models.
Episode 4: Shifting balance, shifting priorities: Where work goes next
Listen: The nature of work had already been changing long before the global pandemic accelerated trends around flexible work, remote work technology, and the gig economy. While some industries and workers have benefitted from these changes, others have been left behind - including many women who dropped out of the workforce due to family concerns, or service-industry professionals whose jobs evaporated.
The latest episode of Living Beyond Borders, a special podcast series from GZERO brought to you by Citi Private Bank, looks in depth at the future of work and how the latest trends will change business, the economy, and the global political balance. Moderated by Caitlin Dean, Head of the Geostrategy Practice at Eurasia Group, this episode features Ida Liu, Global Head of Private Banking at Citi Global Wealth and Alexander Kazan, Chief Commercial Officer at Eurasia Group.
Ida Liu
Global Head of Private Banking, Citi Global Wealth
Alexander Kazan
Chief Commercial Officer, Eurasia Group
Caitlin Dean
Practice Head, Geostrategy, Eurasia Group
2.6 billion people: “WTF is WFH?”
As the world's wealthier and more fully vaccinated countries begin to emerge from the pandemic, there's a lot of talk about "the office".
When do we go back to it? Do we go back to it? What is an "office" now anyway?
The vast majority of business execs say they expect employees will split time between home and the office now, according to a recent McKinsey study. Designer salad companies are keen to serve the wave of office returnees, while savvy entrepreneurs are making special speakers for remote workers to feel like they're in the office even when they aren't.
The office debate is an important one for sure — full disclosure: this piece was written from home! But for billions of people around the world, it's not relevant to their work or lives.
That's because they have jobs that can't be done from afar: like giving haircuts, serving food, or tending to seriously ill or injured patients. Or their jobs are in occupations like farming, deliveries, sanitation, or transportation that are essential but not confined to any specific space.
How many people are we talking about? According to the International Labor Organization, just 18 percent of the global workforce, or about 557 million people, were able to consistently telework during the pandemic. That's triple what it was before COVID. But it still leaves 2.6 billion people around the world for whom the "back-to-the-office debate" sounds like something from another planet.
Those 2.6 billion people and their families have been hit hardest by the pandemic in terms of hours and wages lost, psychological stress, and unemployment.
Work from home, you say? "Most of us in the Philippines don't have that luxury," said Liezl Gayeta, 30, who runs the kitchen at the Manila-based health food delivery company The Sexy Chef. "If we don't come to work," she told us, "we don't get paid. If we want to feed our families, we need to show up for our jobs."
But the division between the "Zoom class" and the rest of the world also closely tracks some of the broader fault lines of inequality that cut across our societies.
Rich countries vs poor countries. Even in wealthy economies, only a small portion of workers can telework consistently. In the US, it's about a fifth. But in lower and middle income countries, the size of the "laptop class" plummets. In India, for example, where more than 450 million people work in retail or farming alone, only 5 percent of workers can Zoom to the job. The numbers in sub-Saharan Africa are similar, says the ILO.
Part of this is because in-person services jobs are more prevalent in less economically developed countries — you are six times as likely to be a street-vendor in a middle-income country as you are in a wealthy one, and 16 times as likely to work in agriculture.
But it's also about limitations on internet connectivity and service. Most countries simply don't have the internet infrastructure to support massive teleworking populations.
And many of these countries have suffered the additional blow of evaporating remittances from their citizens working abroad in professions that often aren't "remote-workable."
Ramshid, a 34-year-old driver from southern India who has worked in Qatar for more than a decade, told us that the pandemic had slashed his monthly earnings from about $2,000 a month to less than half of that, leaving him with no money left over to send home to his wife and children in India.
Meanwhile, high debt loads and scarce cash mean that governments in low and middle income countries can't roll out the kinds of unemployment benefits or infrastructure rebuilding programs that we've seen in Europe and the US. Rich countries have uncorked close to 30 percent of GDP to cushion the pandemic blow. Others have barely mustered 7 percent, says the IMF.
That's one big reason why the pandemic has put decades of poverty-reduction in reverse. Last year, more than 120 million people fell below the poverty line globally, and the number of people in extreme poverty rose for the first time since 1997.
Haves vs have-lesses. Even in wealthier countries, non-remote jobs are overwhelmingly in lower-income, economically vulnerable professions. According to a Pew study, more than three-quarters of low-income workers in America can't work from home at all.
What's more, the ILO found, non-remote jobs have higher proportions of women, ethnic minorities, and younger people — groups who went into the pandemic at an economic disadvantage, and all suffered disproportionate economic losses during the crisis itself.
What's to be done? There are two separate things to focus on, says Janine Berg, a senior economist at the ILO. Globally, rich countries need to look at the thorny question of debt relief for cash-strapped lower-income countries.
But even within richer ones, better compensation and labor protections for "essential workers" are, well, essential.
"It's really nice to be out on the balcony applauding them," said Berg "but unless you start compensating them more, what happens if another pandemic comes around?"
Tell us where you're working from and what you think about all this here.
Adam Grant on post-pandemic WFH: CEOs still don’t get it
Where does US organizational psychologist Adam Grant stand on the raging debate on post-pandemic work from home? His message is clear: CEOs demanding everyone return to the office like COVID never happened simply don't get it. "Productivity is about the purpose and the process that you bring to your job (...) not about the place you happen to be doing it in." Catch his interview with Ian Bremmer on the Season 4 premiere of GZERO World, which begins airing on US public television Friday, July 9. Check local listings.
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