Looking back to the beginning of 2020, the US economy was ripe for business. We lived in the “good old days”, characterized by low interest rates, low to no inflation and steady, sustainable economic growth. But the “good old days” are over.
According to our research at Vistage, CEO confidence has changed more dramatically each quarter over the past two years—with rapid peaks and sudden drops—than it had in the seven years before the pandemic. Rising inflation, geopolitical conflict, protracted hiring challenges, supply chain slowdowns and exorbitant oil prices are among the factors causing US business leaders’ confidence to plummet in the second half of 2022. CEOs have begun to accept disruption as part of their new reality.
Next, business leaders are laser-focused on areas they have more control over, such as talent. Whether we are entering or already in a recession, we are not experiencing the job losses we have traditionally associated with economic downturns. The labor market has consistently beaten expectations and unemployment has remained at near-record lows. The right talent is out there, but recruitment and retention remain top challenges. Today’s talent has their choice of roles – if they’re not happy with their current salary or culture, they’re empowered to join the big upgrade and find a role that better suits their needs.
To tackle recruitment and retention in a meaningful way, it is important for managers to first understand the modern worker. Accelerated by the increasing dominance of Millennials and Gen Z in the workplace, the modern worker is empowered. They’re looking for a job that fits their needs, as opposed to finding a job they can fit in. They expect their organization to align with their values, and they want their day-to-day tasks to have some kind of greater meaning. They are no longer willing to settle for a job that doesn’t allow them to live the life they want.
As the modern worker proliferates the workplace, the traditional Monday-Friday 9-5, the end-all-be-all solution for all workplaces, is on its last breath. CEOs trying to revive their previous mandates for teams that have adopted hybrid working during the pandemic are often met with resistance. In fact, a recent ADP survey revealed that two-thirds of the workforce would consider looking for a new job if asked to be in-person full-time. More than half (52 percent) said they would be willing to take a pay cut to gain more flexibility. Most CEOs cannot afford to lose this battle.
Nevertheless, this shift comes with its own issues for managers. CEOs report reduced corporate culture and collaboration as a result of remote working. Frontline managers struggle to manage hybrid teams. CEOs are looking for a silver bullet to help energize the future of flexible work, but finding the right formula for in-person vs. home working isn’t prescriptive. Each team in each organization must find what works best for them, and that will require continued trial and error. It’s new territory for all of us. But if properly harnessed, it represents the potential to unleash the next wave of human productivity.
CEOs who master flexibility – from offering L&D and reskilling programs tailored to managing modern teams, to updating technology to better serve hybrid workers, to redesigning shared office spaces to better suit personal work needs, to looking at flexible hours for companies that can or can’t increase retention, increase hiring efforts and withstand the headwinds of a volatile and unpredictable economy in the years to come. Managers who create an environment that allows employees to seamlessly shift between autonomous and collaborative tasks will eliminate the need to supervise. Instead, encourage employees to take an active role in deciding which hybrid level makes them most efficient and productive.
The “good old days” may be over, or we may just be entering them. By recognizing what employees want and want, we’re unlocking a new wave of work that puts employees first. Regardless of what the economy does or doesn’t do, having the talent in place will set companies up for long-term success.