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How companies can weather the ‘perfect storm colluding against employers’

September 21, 2021, 1:37 PM UTC

The extent to which people have changed their minds about work over the last 18 months is significant. But how significant?

Anne Helen Peterson, culture writer and author of Culture Study on Substack, asked people to share which beliefs of theirs have changed the most over the course of the pandemic. A lot of them were about work (emphasis mine):

“I have always put my job before everything else, including my family,” one person said. “I’ve recently reached a breaking point with the recognition that my job will never go above and beyond for me.

“Career was my identity. Now I realize it’s all a capitalist scam,” another said.

You might want to dismiss these as fringe views, but data would suggest otherwise and the philosophical distance Peterson’s readers traveled over such a short period of time is notable. 

It is safe to assume that a lot of folks who were totally fine with the status quo of 2019 no longer feel that way.

Four million people left their jobs in the month of July alone, and 16 million have left their jobs since April. People are “rage-quitting” and this reckoning is occurring in all industries and types of work.

Brooks Holtom, professor of management and senior associate dean at Georgetown University, explained to Fortune that before the pandemic people made drastic shifts in their career mindset after experiencing a personal “shock,” such as the death of a loved one, a marriage or divorce, a university acceptance letter, or getting laid off.

The pandemic has been a shock (or multiple shocks) for everyone. As a result, everyone is re-evaluating their careers in ways that are significantly altering labor economics and workforce strategy. Combine that with the rising availability of jobs—due to economic recovery and the proliferation of remote work—and we’ve got a “perfect storm colluding against employers,” Holtom said.

Charlie Warzel, a former New York Times columnist who has his own newsletter called Galaxy Brain, went a little deeper on this topic.

“The pandemic has left people sick, tired, exhausted, and rattled,” Warzel wrote. “It has also changed peoples’ priorities and upended their notions of what is possible. For the first time in a while, they’re starting to ask big questions about the status quo. People in charge ought to be listening.

These sentiments were shifting even before the pandemic. Nicholas Pearce, professor at Kellogg School of Management at Northwestern University, told BBC: “I’ve seen more of my students over the last decade opting for what I call ‘the purpose path’. They are willing to sacrifice the mega-payday in order to engage in work that contributes to human flourishing – including their own.”

COVID-19 has accelerated the shift.

For executives today, it’s time to cut out the amoral management practices. This includes wage theft, unhelpful HR departments, ghosting job candidates, forcing people to risk their lives at work, acceptance of managers that harass employees, and failing to advance diversity, equity, & inclusion.

If your strategies around engagement and culture do not evolve for this new era, you will lose people and have a much harder time replacing them than ever before. Today’s workers are armed with timely, relevant information between sites like Glassdoor and all the social media platforms.

Information is traveling faster, and in richer detail. Try searching your company on Twitter or TikTok for proof. In the rising competition for talent, every single one of your business practices is subject to public scrutiny. It’s time to stop pretending you can hurt people and hide it, and stop treating people like they are expendable.

As Ezra Klein put it in a recent New York Times column, “The American economy runs on poverty, or at least the constant threat of it.” Warzel adds that “Most knowledge work runs on the threat of your career being derailed by not giving enough of yourself to it.” Today’s forward-thinking leaders are changing that, many have already been working on it for years.

You can either change your approach based on the evidence, or be forced to change by the shock of losing top employees and job candidates to your competition.

No industry or company is immune to the Great Reshuffling. But there will be winners and losers, and talent strategy is clearly going to be a differentiator.


Aman Kidwai
aman.kidwai@fortune.com

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Ask An Academic

The Future of Tech Talent Distribution

Bhaskar Chakravorti - Dean of global business at The Fletcher School at Tufts University

The case for allowing a fully remote or remote-friendly working model is already quite strong: current employees want it, prospective employees are looking for it, and new markets are open to your business because of it.

For the tech industry, and others in high-paying knowledge-work fields that have historically been focused on major urban hubs like New York City, San Francisco, or Chicago, remote work also presents a unique opportunity to geographically redistribute wealth and opportunity in America and beyond.

Bhaskar Chakravorti at Tufts University sees expanded talent markets as mutually beneficial for tech companies and global equity. 

“One roadblock on the path to closing the diversity gap is the extreme geographic concentration of tech companies, which limits the industry’s ability to connect with, recruit, and retain talent from a widely dispersed pool,” he wrote in the Harvard Business Review. “To truly make the industry more inclusive, tech companies need to let go of their geographic biases and change the way they recruit, organize teams and allow employees to work.”

 

The Fletcher School’s Institute for Business in the Global Context looked for data based on three criteria: the presence of Black, Latinx and female STEM graduates, cost of living, and digital infrastructure. Six states were identified as ideal for a new office or remote talent cluster: Georgia, Texas, Delaware, Virginia, Connecticut, and Maryland.

Chakravorti spoke with The Modern Board to discuss this opportunity in more detail and why it matters for the tech industry in particular.

 

The Modern Board: Why is it important for the tech industry to think about the many different kinds of diversity that can be present within a company?

Bhaskar Chakravorti: Many of these firms have been publishing the diversity statistics in their companies for a while. When I talk about diversity, it's across multiple dimensions such as racial diversity, gender diversity, political affiliations, sexual orientation. The tech companies actually do pretty badly along all those dimensions...

The tech industry is producing products that are created by these employees, and those products affect us all. If those products are produced by a narrow sliver of the population, then you end up with what is essentially a non-representative product.

[Later] If I'm any of the companies that are building the next generation of tech products, I have to be mindful of the fact that a more diverse workforce, a talented diverse workforce is going to help me build a better product, and thereby continue to stay relevant in the marketplace. If the CEOs make that connection, I think that's when we're going to see a real movement.

 

So what is the opportunity now for the tech industry to change that?

BC: The pandemic had created an opportunity for these companies to hire from places that were further away from the usual hunting grounds… I think this does present an opportunity for the companies to break out of that shell that they had been in, and because interviews are also being done remotely you don't necessarily have to fly somebody over ... but you could pick up some fantastic talent who could do brilliant things just like a typical Google engineer or a Facebook engineer out of Palo Alto.

This opportunity is a window that was created by a pandemic. And it's important that the companies actually use this window to deliver on the commitments and the promises on diversity that the leaders of most of these companies have made in the past.

 

Why are some tech companies resistant to allowing full flexibility around remote work?

BC: There's a lot of work that actually does require people to be in the same room. And if it isn't just because I need to go to the same whiteboard and be able to see everybody in that place in order to brainstorm an idea. There is a notion of morale, which is very important. 

Quite often these companies prided themselves in literally creating headquarters and offices that employees wouldn't want to leave. … These companies believe that proximity helps build camaraderie or better products.

I do believe that there is a need for people to be face to face. However, the reality is that we have gone away from the pure face-to-face model, and with an acceptance of the digital way of people communicating with each other, and especially for tech companies, where their stock and trade is digital, it's easier for them to be able to organize themselves in this way. 

Many companies are also creating room to set up these dispersed workplaces, because people have just moved, or people's expectations have changed and if they want to keep talent they have to stay with what the talent wants and also go to where the talent is. So, the reality is going to be a hybrid reality no matter what.

 

What does this mean for headquarters and office locations in the future?

BC: We are beginning to see smaller offices dispersed in multiple locations such as Austin, Texas, Nashville, Tennessee, Miami, Florida, and Atlanta, Georgia. You've seen smaller offices sort of popping up all over the place in cities like this and that trend is only going to grow.

It accomplishes a few different things. One is, it allows you to recruit from these places, but also because you build a cluster and you hire multiple people who potentially see themselves as colleagues and peers, and they see themselves in their colleagues. If I'm Black and and I see other Black colleagues in the office alongside me from the same region, it gives me a greater incentive to stay with the company. So it's not just recruiting, but it's also retention and building employee morale.

 

Is there anything companies can do to prevent the real estate frenzies occurring in these emerging tech hubs?

BC: I think it's a similar issue when these companies start relocating employees or keeping employees in places like Austin, Texas or the Research Triangle in North Carolina or Miami, Florida, it's going to drive up real estate prices in these cities and put a stress on the infrastructure. 

Are these companies really going to contribute to mitigating those efforts? Maybe they will, a little bit, in order to be good citizens, but those negative outcomes are bound to happen. ... These companies may offer a few subsidies here and there but they're probably not going to go that much further.

If the companies do distribute their work and their workforce enough, you may not see the same kind of almost catastrophic outcomes that you've seen in cities like San Francisco. I think San Francisco should be a cautionary tale for everybody where you just put far too much in one location. … Hopefully, you will not have the same level of catastrophic outcomes as we currently experience in places like San Francisco and increasingly places like Boston and Seattle.

Headlines

The Atlantic - The Unwritten Rules About Black TV

In a poignant critique of an industry that has been central to American culture for almost a century, Hannah Giorgis writes that “The medium’s racial progress has been like that of most other American industries: slow, cyclical, uneven.”

A former TV writer explained the concept of negotiated authenticity, “the phrase she uses to describe what many Black screenwriters are tasked with producing—Blackness, sure, but only of a kind that is acceptable to white showrunners, studio executives, and viewers.”

In addition to writing a thoughtful, thorough investigation into how and why progress is made and what impedes it, Giorgis and the idea of negotiated authenticity strike a chord that rings true for those in corporate social responsibility or diversity, equity & inclusion about authenticity and who these CSR or DEI efforts are serving.

A lot of press releases came out last summer about racial equality, making numerous grand commitments to that and other social causes. Are they sincere? On whose terms are we defining progress? Did you really learn and internalize that Black Lives Matter in the summer of 2020, or were you only willing to make that claim once others made it okay for you to say? Giorgis’ article describes in detail how those lines are drawn and how companies choose to avoid meaningful social commentary.

Fortune - Airbnb announces plans to provide temporary housing to 20,000 Afghan refugees

Airbnb shared details with Fortune about this initiative, led by Airbnb.org, the company’s nonprofit arm. They provided emergency funding to the International Rescue Committee, HIAS and Church World Service to provide immediate temporary stays for arriving Afghan refugees and then started working with host partners in their network to place them in longer-term stays after they arrived. CEO Brian Chesky tweeted: "The displacement and resettlement of Afghan refugees in the US and elsewhere is one of the biggest humanitarian crises of our time. We feel a responsibility to step up. I hope this inspires other business leaders to do the same. There’s no time to waste."

Financial Times - Corporate America declines to comment on Texas abortion ban

“Texas-based American Airlines, Dell and AT&T were among more than a dozen companies and business groups the Financial Times contacted that have previously spoken out against controversial legislation in Texas and elsewhere. The companies either declined to comment or did not respond to a request to comment on the new abortion restrictions.” The article notes that while some smaller companies did take action in this moment and others have spoken out about reproductive rights in the past, America’s business leaders stayed mostly quiet as the state of Texas passed the strictest abortion laws in the US. 

Protocol - Andy Jassy overruled AWS recommendation a senior exec be fired for discrimination, sources say

A good example of what not to do and perhaps also the kind of behavior in someone’s history that should disqualify them for future promotions, if the promotion or hiring process had better standards for leadership ethics.

Fisher Phillips - EEOC Files First Pandemic-Related Remote Work Discrimination Lawsuit

“As expected, the EEOC is now attempting to use an employers’ previous remote working arrangements during the COVID-19 pandemic as evidence that employees should have been permitted to continue to accomplish the essential functions of their employment in a remote capacity. This provides perspective on likely attack vectors that will be used against employers who deny remote work requests.”

CBS News - Salesforce says it will help employees leave Texas after strict abortion law passed

One of the few to make a move in response to this restriction of human freedoms in Texas. This move is employee-focused in a way that assures current and prospective employees that this company might take care of them in a way that goes above and beyond, an important signal to send in an era of rising cynicism around work and careers (see above). Salesforce also just announced that it is a Net Zero company across its full value chain and achieved 100% renewable energy for its operations.

What does corporate social responsibility (CSR) mean to you?

Charley Moore, founder and CEO, RocketLawyer

"We must actively embrace the importance of social responsibility, by engaging in the defeat of injustice. That means actively inventing solutions to enhance society and taking positive steps to protect the environment and the wellbeing of the people who depend on us. At Rocket Lawyer, that means employing diverse talent in every part of the business, including our board of directors. It means implementing sustainable practices and philanthropic initiatives, while working diligently to make the law affordable for everyone." 

 

 

Tony Bates, CEO, Genesys

“As a leader, I try to follow something instilled in me by my mother: don’t judge until you’ve walked in someone else’s shoes.  In other words, lead with empathy.  That’s become a beacon for how I make decisions and it’s why I know it’s important not to shy away from talking about the issues our society faces today. … I’ve seen first-hand how validating it can be when a CEO is courageous enough to acknowledge and take action on an issue. I may not have all the answers, but as a leader, I know I have a responsibility to set the stage for foundational change.

Genesys is fully committed to building a better future for our people and society. I believe we have the opportunity to set the standard for what a sustainable future looks like. This means rebuilding the systems that work against underrepresented groups, committing to the life-affirming mission of sustainability and being aggressive about our goals of attaining carbon neutrality, providing the mental health support our employees need, and continuing to consider how we can invest in a better way forward.”

One good idea

An unlimited expense account for books

Many companies spend a lot of money on learning & development programs that include access to course libraries and other resources in hopes of improving the knowledge and skill set of their employees. Given the universal, urgent need for stronger technical skills and emotional intelligence, the payoff for upskilling employees can be very high.

Andrew Bialecki, CEO of Klaviyo, has an employee benefit in place that not only makes people smarter but also strengthens company culture. He ties the existence of this offer to their commitment to “always be learning” so they can continue to solve hard problems for their customers. 

All employees at Klaviyo can buy any book they want, no questions asked, and expense it to the company. Employees have used this benefit to learn about their industry or job, or to gain broader perspectives on society. They’ve built libraries at home and in the office and are sharing reading lists amongst themselves and to new employees. Many employees have also told Bialecki that this benefit reinvigorated a love of reading that went dormant at some point during their schooling.

Bialecki wants his company to take on the intellectually curious culture of a university more than the “static” approach that many businesses take, he explained, where people don’t learn much after they’ve figured out the basics of their job. 

The book benefit is also quite affordable compared to a lot of other L&D initiatives, and efficient.

“Somebody spent hundreds of hours, maybe years researching a topic and distilled it down to something you can learn in five or 10 hours. I mean, what an amazing efficiency,” Bialecki told Fortune. 

Some of his favorite books that he recommends to employees are The Innovators by Walter Isaacson, No Rules Rules by Netflix co-founder Reed Hastings, Creativity, Inc. by Ed Catmull, Creative Selection by early Apple employee Ken Kocienda, and Working Backwards, the book on Amazon by Colin Bryar and Bill Carr.

Employees don’t have to just read business books or work-related texts, many are reading fiction. Perrin Brown, a customer service representative who joined the company during the pandemic, said this benefit offered her some “escapism” from the monotony of working from home every day and also helped her meet people across the company. Lately, she’s been reading to learn about different cultures so she could grow her capacity for empathy and better serve customers.

“I’ve really striven this year to read more authors of color, especially those who are commentating on modern issues,” Brown said. She shared how she used to read maybe a couple of books a year but has read 30 so far this year with the goal of hitting 50.

“More companies should offer [the free book benefit] if they can afford it,” Brown said. “It’s an easy way to level the playing field… a great way to connect with people… and it’s a great way to share your passions, so I’m very thankful and just looking over what I read this year, I can’t help but say I’m proud of myself.”

Doing the work

In every issue, The Modern Board will share the story of a nonprofit that you should know about. Last time, we highlighted Resilient Coders. This week, we look at another group that is focused on improving equity in tech education, but from a different angle.

100k in 10

This organization is working to address the shortage of STEM teachers and lack of diversity in those ranks as well. Kate Booth, head of corporate social responsibility at SAP, has been working with this organization for a few years through the company’s pro bono volunteer program and is also now a financial supporter of the unCommission initiative, which seeks out the experiences of people from underrepresented communities in STEM in order to elevate their stories to educational decision-makers and the general public. 

“They look for root causes to why there is a lack of STEM teachers and then work on systemic solutions - they are not a teacher training organization,” Booth told Fortune. “I thought it was a really unique approach, everyone always asks why these voices are not included in the programs which are built for them, and this is a great example of an org doing the work to reach those communities.”

Numbers that matter

1.2

This is the ideal number of days to work in the office, according to data from Humu, the manager training solution founded by former Google people operations leader Laszlo Bock. 

Bock specified the data point and what it means for employers in a conversation with Fortune. In a blog post, Humu explained why somewhere between one and two days in the office per week creates the ideal conditions for maximum employee productivity. They found that the distraction-free environment allows employees to be focused on key tasks at home and energized to be in the office when it is their choice to be there. Additionally, the specific days in the week employees were at home or in the office (such as remote Fridays or mandatory Mondays) did not seem to have an effect on productivity.

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