Looking back to the beginning of 2020, the U.S. economy was ripe for business. We were living in the “good old days,” marked 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 dramatically each quarter over the past two years–with more rapid spikes and sudden drops than it had over the seven years leading up to the pandemic. Heightened inflation, geopolitical conflict, prolonged hiring challenges, supply chain slowdowns, and exorbitant oil prices are among the factors causing U.S. business leaders’ confidence to plummet in the second half of 2022. CEOs have started to accept disruption as a part of their new reality.
Subsequently, business leaders are laser-focused on areas they have more control over, such as talent. Whether we’re entering into or already in a recession, we are not experiencing the loss of jobs we have traditionally associated with economic downturns. The labor market has consistently beaten expectations and unemployment has stayed at near-record bottoms. The right talent is out there, but hiring and retention remain top challenges. Today’s talent has their choice in roles–if they aren’t happy with their current pay or culture, they are empowered to join the Big Upgrade and find a role that better fits their needs.
To tackle hiring and retention in a meaningful way, it’s important for leaders to first understand the modern worker. As accelerated by the growing dominance of Millennials and Gen-Z in the workplace, the modern worker is empowered. They are seeking a job that fits their needs, as opposed to finding a job they can fit themselves into. They expect their organization to align with their values, and they want their daily tasks to have some sort 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 through Friday 9 to 5 being the end-all-be-all solution for all workplaces is on its final breath. CEOs who try to resurrect their former mandates for teams that have adopted hybrid work during the pandemic are often met with resistance. In fact, a recent ADP survey revealed two-thirds of the workforce would consider looking for a new job if they were asked to be in-person full time. More than half (52 percent) said they’d be willing to take a cut in pay to have more flexibility. Most CEOs can’t afford to lose this battle.
Still, this shift comes with its own sets of issues for leaders. CEOs report diminished company culture and collaboration as a result of remote work. Frontline bosses are struggling to manage hybrid teams. CEOs are searching for a silver bullet to help fuel the future of flexible work, but finding the right formula for in-person versus at-home work is not prescriptive. Each team within 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 leveraged correctly, 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 space to better fit the needs of in-person work, to looking at flexible hours for companies that can’t–can increase retention, boost hiring efforts, and withstand the headwinds of a volatile and unpredictable economy for years to come. Leaders who create an environment that allows employees to seamlessly shift between autonomous and collaborative tasks will eliminate the need to monitor. Instead, encourage employees to take an active role in determining what level of hybrid makes them the most efficient and productive.
The “good old days” may be over or, maybe, we’re just entering into them. By recognizing what employees want and desire, 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.