Trends and Tensions That Will Shape Work Post-Pandemic (Part 2)
Volume 22, Chapter XII, Number 004
Hello!
This Week’s One Great Thing: Trends and Tensions That Will Shape Work Post-Pandemic (Part 2)
This is a continuation of last week’s letter on the trends and tensions that will shape work in this post-pandemic world. If you want to read that first, click here.
Note: the ideas here were originally shared in this interview at Radio Katipunan: The Changing Workplace. You can watch that video if you have the time. But I had the chance to write it out in more detail here.
Fairness and Equity at Work
We are becoming a very polarised society. And you can look at it from different perspectives, but what I see is that the polarisation is actually really a debate on fairness: race, climate change, COVID vaccine distribution, representation, inclusion. Everyone just wants to be treated fairly and equitably. In fact there’s a study that the frequency of CEO’s of SP 500 Companies talking about issues of equity, fairness and inclusion has increased by 650% since 2018.
As a trend, that continues to this day:
- Who has access to flexible work? In some organizations some managers allow their employees flexibility while other managers don’t. Who decides? What is fair? What is equitable?
- What happens when employees move to locations with a lower cost of living? Should employers lower their compensation even though the impact of their work hasn’t changed?
- In today’s labor market, companies are actually paying more to get new talent — the number is +20% more. Is it fair to pay new employees so much more than your current employees? What does that say about loyalty? Is loyalty really not rewarded in companies?
- Companies are offering new, targeted benefits for specific segments of their workforce (e.g., additional pay to support employees with children). While these benefits are critical to help those employees do their job, employees without children are asking “Why are employees who are parents getting something and I’m not?”
This was what happened during the pandemic and was often created as stop gap measures then. As we get out of pandemic mode and getting some sense of our stability back, executives will need to address how they are managing fairness and equity across the increasingly varied employee experience.
But the bigger context that I see as important to see is that we realise that nearly 130 million people around the world were laid off in a matter of weeks (the number is 81 million in Asia!) as the pandemic took hold. Whether you had strong work ethics, good performance or loyalty to a company, you were laid off. Then months later, many companies were suddenly desperate to rehire. Existing employees (those who were left and not laid off) were often worked to the point of burnout (and told that they should be grateful they still have a job), newbies with less experience were brought on at a higher wage and employers overlooked things that could have cost workers their jobs pre-pandemic.
Workers came away from all of this feeling like the connection between working hard and being rewarded was broken. That’s really discouraging to top performers. And very insecure for everyone. Something happened about our understanding of employment that is changing how employees work. If we are not rewarded for our loyalty, for our hard work, then we should not give our loyalty and hard work to our company.
And because of that, there is another clear trend:
Employee Turnover will continue to Increase
HR Managers in organisations are pressured right now because of employee turnover. And there are several reasons for this turnover. Flexibility around how, where, and when people work is no longer a differentiator, it’s now the norm for knowledge and office workers, and therefore a baseline requirement workers are looking for in companies. Employers that don’t offer flexibility will see increased turnover as employees find roles and companies that offer that flexibility.
Now, what’s interesting is that I’m seeing another trend: even offering flexibility for employees will not slow turnover. For two reasons:
First, employees that work hybrid have fewer friends at work, which means they have weaker emotional and social connections with their coworkers and their companies. In ASEAN cultures, this is important and being friends with your coworkers act as a social pressure to keep employees in organisations. This a classic case of what you thought as medicine is actually causing more sickness.
Second, there are just more potential employers available now than before. It’s an employee’s market because our understanding of where we can work has changed. The geographic radius for potential work has expanded. Even in hybrid models, where employees are expected to come to the office once a week — it’s ok to have a longer commute once a week, and then stay at home or work in a coworking space the rest of the week.
These two factors is leading to sustained turnover rates higher than anytime in history. What we call the Great Resignation is actually becoming the Sustained Resignation.
The Rise of the Passion Economy
Connected to the whole disconnect between hard work + loyalty and work is the rise of the Passion Economy. If I cannot depend on a company, I better depend on myself, and I better do something I love doing. The top-earning writer on the paid newsletter platform Substack earns more than $500,000 a year from reader subscriptions. The top content creator on Podia, a platform for video courses and digital memberships, makes more than $100,000 a month. And teachers across the US are bringing in thousands of dollars a month teaching live, virtual classes on Outschool and Juni Learning.
These stories are indicative of a larger trend: the “creator stack.” Pre-pandemic, the biggest online labor marketplaces flattened the individuality of workers, new platforms allow anyone to monetize unique skills. There are now more ways to capitalize on, and make creativity a viable future. Users can now build audiences at scale and turn their passions into livelihoods, whether that’s playing video games or producing video content. This has huge implications for entrepreneurship and what we’ll think of as a “job” in the future. You’ve seen the paid Masterclasses. But on a bigger scale, TikTokers and Vloggers are now earning a lot of money and not going into employment anymore.
Nuancing Employee Wellbeing
Let’s nuance employee well-being a bit here. So everyone’s talking about employee well-being and mental health. In fact, many companies have added mental health benefits like company counsellors and therapists, and mental health breaks. A Gartner Survey showed that 94% of companies made significant investments in their well-being programs. 85% increased support for mental health benefits. 50% increased support for physical well-being. 38% increased support for financial well-being.
And for those who avail this, our research shows that talking to counsellors/therapists/coaches has been very beneficial — an increase of 23% in mental health (almost 2 points in a 10 pt scale of self-reported happiness), 17% higher levels of physical health, and are 23% more likely to say they sleep well at night. These improvements in personal outcomes translate to higher levels of performance and retention.
The main concern is that not a lot of people avail it. Across the last 12 months, data shows that less than 40% of employees have taken advantage of any well-being benefit provided by their employer. This is concerning: everyone talks about mental health, but 60% don’t seem to want to do anything about it. So there’s a challenge to increase the uptake, because once people avail of it, it’s beneficial to them.
Retirement or a 2nd or 3rd Career?
The last trend I want to talk about is already ongoing for some time, but is even more pronounced in the past five years. Because of improvements in health care and medical technology, we now have this phenomenon of retirees who are at crossroads in their lives because they retire at 65 yrs old but still have 20 to 30 years ahead of them. 20 to 30 years is the time you can build and master a whole new career!
Germany became the first nation in the world to adopt an old-age social insurance program in 1889, designed by Chancellor Otto von Bismarck. The idea was first put forward in 1881, at Bismarck’s strong suggestion by Germany’s Emperor, William the First, in a ground-breaking letter to the German Parliament. William wrote: “. . . those who are disabled from work by age and invalidity have a well-grounded claim to care from the state.” The German welfare program provided contributory retirement benefits and disability benefits. Participation in the retirement system was mandatory and contributions were taken from the employee, the employer and the government.
Retirement began to be widely adopted in the United States after the Industrial Revolution, when aging factory workers began to show signs of their age: slowing down assembly lines, taking excessive sick days and usurping the spots of more youthful and energetic men with families to feed. Also, older workers brought about unemployment among the younger population by declining to resign. By 1935, the idea that in order to get old individuals to quit working was to pay them enough so they can quit working became widespread. President Franklin D. Roosevelt had a team study this and in 1935 he secured the Social Security Act of 1935, which made workers and their employers fund their retirement at age 65.
With the global focus on mental health though, there are studies that have confirmed the strong correlation between retirement and mental health issues. According to the Mental Health Foundation, one in five of present-day retirees experience depression. This risk is even higher for those who are divorced. Recent studies have indicated that “retirement increases the chances of suffering from clinical depression by around 40 percent, and of having at least one diagnosed physical illness by 60 percent.”
Partly because of these issues, but also really because our senior citizens have a great wealth of experience we can all benefit from, there is a trend of many knowledge workers scaling back on their jobs at around 55 or 60, and then taking consulting work (there is even a term for it: Gray Hair Consulting Practice), or even changing careers, but still working productively for 15–20 more years. It’s worth noting that Xi Jinping is 69 yrs old, Vladimir Putin is 70 yrs old, and Joe Biden is 80 yrs old. The three most powerful men in the world today would all be retired if we used the same criteria of a 65 yr old retirement age on them! Oh, and Warren Buffet of Berkshire Hathaway is 91 yrs old!
What do you think of these trends? Shoot me an email and let’s discuss!
For our readers who are part of the Christian tradition, a Blessed Christmas! And for those who are Jewish, a grace-filled Hannukah!
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More Great Stuff:
The Four Kinds of Side Hustles
Justin Mares observes that side hustles have a few common traits. Reverse-engineering them will help you become financially independent and grow out of your day job:
- They solve a problem someone is already aware of
- They do NOT require a lot of maintenance or hand-holding
- They have a no-brainer path to profitability
So what can you do? Here are some examples (explained in the article itself):
- Buy an existing asset
- Launch a product on a marketplace with existing demand,
- Launch a unique, one of a kind product in a new space where you can buy demand (Adwords, Facebook, etc.)
- Arbitrage (Craigslist, Airbnb, trading, Uber)
The Mental Health Benefits of a Daily Routine
This is proof that routines and rituals help with our mental health, because it helps us feel more in control of everything and make room for all that’s important.
Now pause, get yourself to a window, look up to the sky, smile, and have a great day!
☕ eric santillan