Employment

Predicting company misconduct before it even happens … really?

Phillip Nones Business, Employment, Government, Human Resources, Social Commentary , , , , ,

Researchers from the Harvard and Tilburg Business Schools think they’ve found a method to do just that.

One of the research techniques that has sprung up in the era of online engagement and interactivity is “mining” reader comments — then analyzing the granular data to discern their wider implications for companies and brands.

One way this happens is by analyzing the words that employees use to describe their own companies on review sites. Doing so can provide clues as to what’s going on inside these companies that others can’t discovers based on forward-facing reporting about the organizations in the business or news press.

Underscoring this point, a study conducted jointly by researchers at Harvard Business School and the Tilburg School of Economics and Management in The Netherlands has found that such information extracted from employee-review websites like Glassdoor.com is helpful in being able to predict potential misconduct beyond other observable factors such as a firm’s financial performance and  industry risk analysis.

The correlating factors revolve around employee observations concerning the environments in which they work – factors like:

  • Company culture
  • Company operations
  • Control practices
  • Performance pressures

Negative or critical comments made within these broad categories contribute to weighing the risk for corporate misconduct.  Business management professor Dennis Campbell of the Harvard Business School notes that the “tone at the bottom” revealed by such comments can be a good early-warning signal of potential misconduct.

“Our theory is that what leads people to commit misconduct is actually the environment they are in,” adds Ruidi Shang, the Tilburg professor heading up the research team.

The Harvard/Tilburg study sifted through information from anonymous reviews of publicly traded U.S. companies that had been posted on Glassdoor.com over a nine-year period between 2008 and 2017.  Focusing on nearly 1,500 companies that had been the subject of ten or more review entries each over the period, by comparing keywords in the comments to actual corporate misconduct cases brought against public U.S. firms over the same period, direct correlations were found between the statements and the companies that were later found guilty of misconduct.

The researchers discovered that certain terms and phrases used by employees in their comments correlate highly to misconduct cases – terms like bureaucracy, compliance, favoritism, harassment, hostile and strict.  Such terms came up disproportionately more frequently in the discussions and comments.

Of course, such analyses are rough measures at best.  Because the researchers drew comparisons between the comments and the corporate misconduct based only on cases that the U.S. government pursued, the methodology would have missed misconduct wasn’t known (or pursued) by the government.  But as for providing “directional indicators,” the methodology seems to be a valid approach. I think we could see it being employed by Wall Street analysts as part of efforts to predict threats to future financial performance – and other potential problems — based on what the granular data reveals.

More details on the study and its findings can be read in this report.

When will U.S. employment dynamics change?

Phillip Nones Business, Employment, Human Resources , , , , ,

Looking around most every community, it doesn’t take long to realize just how many businesses are looking to hire workers.  “Help Wanted” signs are everywhere, and various signing incentives are being offered to entice new employees as never before.

But in many cases the offers of employment are falling on pretty deaf ears. A recent survey of workers conducted by the Indeed employment website reveals that although many people are ostensibly in the market for new jobs, oftentimes the sense of urgency about landing a position simply isn’t there.

The Indeed survey was administered to ~5,000 Americans age 18 to 64 during the summer of 2021.  The sample encompassed individuals in and out of the labor force.

The results of the survey revealed that many of the unemployed respondents don’t feel that they need to land a job right away — but they do express an interest in returning to work at some future point.  The three main factors that appear to be holding people back from returning to work are these:

  • Concerns about the COVID-19 virus and its variants
  • Financial cushions, including employed spouses and the continued availability of enhanced unemployment insurance benefits
  • Care responsibilities at home — particularly involving school-age children

The net effect is that while many employers are making a major push to hire workers in order to take advantage of the reopened economy, many would-be employees simply don’t feel the same sense of urgency.

With the continuing questions surrounding the spread of Delta and other variants of COVID, what was once considered the near-certainty of a “return to normalcy” in the latter part of 2021 hasn’t quite turned out that way.

At this point, it would seem that the employment dynamics aren’t going to change dramatically until the unemployment compensation safety net reverts to its pre-pandemic structure … kids are back in school without the risk of future quarantines or class closures … and no new variants emerge that cause the number of COVID cases to spike again.

Considering what the past 18 months have been like, getting these three factors to neatly align may be a tall order.

For detailed survey results, you can access the Indeed research via this link.

In a twist, “working from home” benefits big tech in big ways.

Phillip Nones Business, Economics, Employment, Social Commentary , , ,

Remote work has turned each new hire into a national competition.

Historically, one of the challenges faced by smaller urban markets was their ability to hang on to talent. Younger workers often found it more financially lucrative following their education to relocate to major metropolitan areas in order to snag higher paying positions with the companies based there.

In time, however, the high cost of living in the large metro markets, coupled with the desire to ditch the unbearable congestion in those areas, led to the formation of new businesses outside the major tech centers that found it easier to compete with the major urban areas for talent. 

Established companies found the same dynamics at work, too. The rise of markets like Charlotte, Salt Lake City, Pittsburgh and Boise underscored that the spread of the “new economy” had migrated to places beyond the traditional hubs of Boston, Washington, New York City, San Francisco/Silicon Valley, Los Angeles and others.

Then the COVID pandemic came along. Suddenly, it didn’t matter where employees lived as companies quickly figured out ways to have, in some cases, nearly their entire workforce working remotely. 

It didn’t take long for employees in some of the market hardest-hit by COVID to flee to far-flung regions. New York City residents moved to the Hudson River Valley, South Florida and other locations. For California residents it was off to Nevada, Montana or Idaho. Boston-based workers decamped for Vermont or Maine.

It soon became apparent that for many tech jobs, the need to be clustered together in offices simply wasn’t that critical. And in an ironic twist, smaller-city startups and other firms are now starting to feel the effects of the establishment biggies poaching their own employees.

It’s particularly ironic; whereas before, companies that couldn’t compete with Silicon Valley heavyweights on salary could offer a whole lot of lifestyle to even the playing field.  Now they’re finding that “work from anywhere” policies have nullified whatever advantages they had. 

Those big-city salaries can be used to purchase a lot of house in whatever kind of environment desired — even if it’s a lakeside cabin in the middle of nowhere. 

It also means that, all of a sudden, everyone’s competing with companies all over the country for talent — and hanging on to the existing talent is that much more difficult. When people are being offered 20% higher salary with no requirement to relocate, that’s a proposition many people are going to consider.

Another interesting consequence is that tech labor force is probably geographically more evenly distributed than it’s ever been — and the workers residing outside the traditional tech hubs are benefiting accordingly — At least in the short-term. 

In the longer term, companies based in the smaller markets hope that they’ll have access to those same new tech migrants if work-from-home policies change yet again.  But that’s a big “if” …

Not so neat: The rise of the NEET generation.

Phillip Nones Demographics, Economics, Education, Employment, Government, Social Commentary , , , , , ,

Millions of Americans age 20 to 24 fall into the NEET category: “Not in Employment, Education or Training.”

The COVID-19 pandemic has exposed some interesting fault-lines in the socio-economic fabric of  the United States.  One of these relates to young adults — those between the ages of 20 and 25. What we find paints a potentially disturbing picture of an economic and employment situation that may not be easily fixable.

A recently issued economic report published by the Center for Economic and Policy Research (CEPR) focuses on the so-called “NEET rate“– young Americans who are not employed, not in school, and not in training.

As of the First Quarter of 2021, the NEET category represented nearly 4 million Americans between the ages of 20 and 24. This eye-popping statistic goes well beyond the particular circumstances of the pandemic and may turn out to be an economically devastating trend with a myriad of adverse ripple effects related to it.

Look at any business newspaper or website these days and you’ll see reports regularly about worker shortages across many sectors — including unfilled jobs at the lower end of the pay scale which offer employment opportunities that fit well with the capabilities of lower skilled workers newly coming into the workplace.

At this moment, pretty much anyone who is willing to look around can easily find employment, schooling, or training of various kinds.  But for millions of Americans in the 20-24 age cohort, the  job opportunities appear to be falling on deaf ears. Bloomberg/Quint‘s reaction to the CEPT study certainly hits home:

“Inactive youth is a worrying sign for the future of the [U.S.] economy, as they don’t gain critical job skills to help realize their future earnings potential.  Further, high NEET rates may foster environments that are fertile for social unrest.”

… Daily urban strife in Portland, Minneapolis and Seattle, anyone?

It doesn’t much help that younger Americans appear to be less enamored with the basic economic foundations of the country than are their older compatriots.  A recent poll by Axios/Momentive has found that while nearly 60% of Americans hold positive views of capitalism, those sentiments are share by a only little more than 40% of those in the 18-24 age category. 

Moreover, more than 50% of the younger group view socialism positively compared to only around 40% of all Americans that feel the same way.

The coronavirus pandemic may have laid bare these trends, but it would be foolish to think that the issues weren’t percolating well before the first U.S. businesses began to lock down in March 2020. 

And more fundamentally, one could question just how much government can do to reverse the trend; perhaps the best thing to do is to stop “helping” so much … ?

More information about the CEPR report can be viewed here.  What are your thoughts on this issue?  Please share your views with other readers here. 

COVID Casualty: Office Gossip

Phillip Nones Business, Employment, Human Resources, Social Commentary , , , , , , ,

Nearly everyone dislikes “office politics.”  But does day-to-day employee gossip rise to that level?  And have we lost something actually beneficial in the wake of remote work limiting our in-person interactions?

Ever since we were children, most of us have been conditioned to regard gossiping as a negative trait that any caring person should avoid doing. 

At its core, the definition of the term is “people speaking evaluatively about someone who isn’t there.”  But gossip can also relate to talking about rumors and conjecture regarding topics that go beyond just people.

Historically, gossip or the rumor mill in the office often served as a means by which anodyne-sounding corporate announcements would be subjected to a healthy degree of “whispered conversation and conjecture.”  Or, as one DC-area employee put it in a recent Wall Street Journal article, ”You hear the surface story, and then you learn what the real story was – and that’s the gossip.”

In the months since mandatory office workplace lockdowns have been imposed, the gossip mill has fallen on hard times.  Instead of serendipitous conversations happening in the lunchroom, in hallways or following group meetings, many workers are spending their days with just one person – themselves.  Or they might be interfacing via Zoom meetings with the same handful of people from their core work team, where it’s always the same information being recycled among the same group of people.

Even for employees who have returned to working at their corporate offices, hybrid schedules often mean that there are far fewer daily interactions happening with other employees.

On one level, the reduction in gossiping may be reducing workplace “drama” and helping people focus better on their actual work tasks.  Although the evidence is murky, productivity studies do appear to show an uptick in employee productivity since the onset of the COVID-19 pandemic.

On the other hand, in a recent survey of ~500 employees and business owners conducted by international legal consulting firm Seyfarth Shaw, the item that respondents missed the most after a year of remote working was “in-person and grown-up workplace conversations.”

For senior leadership, office gossip has been one way to rely on a kind of “early-warning system” about corporate initiatives or directives.  In every office there seem to be a few people who have the pulse of the organization – it might be an executive assistant or some other staff support functionary – who other people feel comfortable confiding in and who in turn can communicate “the upshot” to the top brass.  While difficult to quantify, that sort of dynamic really counts for something.

Of course, human nature being what it is, office gossip is never going to go away completely.  But Skype or Zoom calls feel forced, and typing out thoughts or conjecture on IMs or e-mails is borderline-weird and feels inherently risky.  

On balance, do you welcome the decline of face-to-face “gossip conversations” with colleagues — or do you suspect that a useful guerilla communications conduit has been lost?  Please share your perspectives with other readers.

The consequences of COVID on office space leasing.

Phillip Nones Business, Economics, Employment, Social Commentary , , , , ,

One of the many ripple-effects of the COVID-19 pandemic is the effect it’s had on the demand for commercial office space. 

In a word, it’s been pretty devastating. 

The numbers are stark.  According to an estimate published by Dallas-based commercial real estate services and investment firm CBRE Group, Inc., as of the end of 2020, nearly 140 million sq. ft. of office space was available for sublease across America. 

That’s a 40% jump from the previous year.  Not only that, it’s the highest sublease availability figure since 2003, which means the situation is worse than even during the Great Recession of 2008.

Of course, it isn’t surprising to expect that more sublet space would become available during periods of economic downturn, when many businesses naturally look for ways to cut costs.  But those dynamics typically reverse when the economy picks up again.  This time around, it’s very possible – even probable – that the changes are permanent.

The reason?  Many companies that reduced their office space footprint in 2020 didn’t doing so because they we’re suffering financially.  It was because of government-mandated lockdowns.  And now they’re expecting many of those employees to continue working from home, either part-time or full-time, after the pandemic subsides. 

Employee surveys have shown that many workers prefer to work from home where they can avoid the hassle and expense of daily commuting.  It’s understandable that they don’t want that to change back again.  In many business sectors which don’t actually need their workforce be onsite to produce revenue, companies are simply ratifying a reality that’s already happened.  Accordingly, they’ve changed their expectations about employee attendance at the office going forward.

Commercial landlords are now feeling the long-term effects of this shift in thinking.  Rents for prime office space fell an average of 13% across the United States over the past year.  In places like New York and San Francisco the drop has been even steeper — as much as a 20% contraction.

For many of the lessees, it’s less onerous to sublease space to others rather than attempt to undertake the messy business of renegotiating long-term lease contracts with landlords.  Still, there’s pain involved; sublease space historically comes with a significant discount — around 25% — but with the amount of sublet space that’s been coming onstream, those discounts may well go even deeper due to the lack of demand.

The cumulative effect of these leasing dynamics is to put even more downward pressure on broader rental rates, as the deeply discounted space that’s available to sublet puts more pressure on the price of “regular” office space.  It’s a classic downward spiral.

Is there a natural bottom?  Most likely, yes.  But we haven’t reached it yet, and it’ll be interesting to see when — and at what level — things finally even out.  In the meantime, it isn’t a very pretty picture.

What are you witnessing with regards to office space dynamics within your own firm, or other companies in your business community?  Please share your thoughts below.

Changing the “work-live location paradigm” in the wake of the coronavirus pandemic.

Phillip Nones Business, Demographics, Economics, Employment, Human Resources, Social Commentary , , , , , , , ,

As the COVID-19 pandemic grinds on, its long-term implications on how we will live and work in the future are becoming clearer. 

Along those lines, a feature article written by urban studies theorist Richard Florida and economist Adam Ozimek that appeared in this past weekend’s Wall Street Journal explores how remote working has the potential to reshape America’s urban geography in very fundamental ways.

Just before the first lockdowns began in April 2020, fewer than 10% of the U.S. labor force worked remotely full-time.  But barely a month later, around half of the labor was working remotely.  And now, even after the slow easing of workplace restrictions that began to take effect in the summer of 2020, most of the workers who were working remotely have continued to do so.

The longer-term forecast is that perhaps 25% of the labor force will continue to work fully remote, even after life returns to “normal” in the post-COVID era.

For clues as to why the “new normal” will be so different from the “old” one, we can start with worker productivity data.  Stanford University economist Nicholas Bloom has studied such productivity trends in the wake of the coronavirus and finds evidence that the productivity boost from remote work could be as high as 2.5%. 

Sure, there may be more instances of personal work being done on company time, but counterbalancing that is the decline of commuting time, as well as the end of time-suck distractions that characterized daily life at the office.

As Florida and Ozimek explain further in their WSJ article:

“Major companies … have already announced that employees working from home may continue to do so permanently.  They have embraced remote work not only because it saves them money on office space, but because it gives them greater access to talent, since they don’t have to relocate new hires.”

The shift to remote working severs the traditional connection between where people live and where they work.  The impact of that change promises to be significant for quite a few cities, towns and regions.  For smaller urban areas especially, they can now build their local economies based on remote workers and thus compete more easily against the big-city, high-tech coastal business centers that have dominated the employment landscape for so long.

Whereas metro areas like Boston, San Francisco, Washington DC and New York had become prohibitively expensive from a cost-of-living standpoint, today smaller metro areas such as Austin, Charlotte, Nashville and Denver are able to use their more attractive cost-of-living characteristics to attract newly mobile professionals who wish to keep more of their hard-earned incomes. 

For smaller urban areas and regions such as Tulsa, OK, Bozeman, MT, Door County, WI and the Hudson Valley of New York it’s a similar scenario, as they become magnets for newly mobile workers whose work relies on digital tools, not physical location.

Pew Research has found that the number of people moving spiked in the months following the onset of the coronavirus pandemic – who suddenly were relocating at double the pre-pandemic rate.  As for the reasons why, more than half of newly remote workers who are looking to relocate say that they would like a significantly less expensive house. The locational choices they have are far more numerous than before, because they can select a place that best meets their own personal or family needs without worrying about how much they can earn in the local business market.

For many cities and regions, economic development initiatives are likely to morph from luring companies with special tax incentives or other financial perks, and more towards luring a workforce through civic services and amenities:  better schools, safer streets, and more parks and green spaces. 

There’s no question that the “big city” will continue to hold attraction for certain segments of the populace.  Younger workers without children will be drawn to the excitement and edginess of urban living without having to regard for things like quality schools.  Those with a love for the arts will continue to value the kind of convenient access to museums, theatres and the symphony that only a large city can provide.  And sports fanatics will never want to be too far away from attending the games of their favorite teams.

But for families with children, or for people who wish to have a less “city” environment, their options are broader than ever before.  Those people will likely be attracted to small cities, high-end suburbs, exurban environments or rural regions that offer attractive amenities including recreation. 

Getting the short end of the stick will be older suburbs or other run-of-the-mill localities with little to offer but tract housing – or anything else that’s even remotely “unique.”

They’re interesting future prospects we’re looking at – and on balance probably a good one for the country and our society as it’s enabling us to smooth out some of the stark regional disparities that had developed over the past several decades.

What are your thoughts on these trends?  Please share your perspectives with other readers.

Post-pandemic, will the office landscape ever be the same again?

Phillip Nones Business, Economics, Employment, Human Resources, Social Commentary , ,

Nearly every business or organization, regardless of thee industry segment in which it operates, has been at least somewhat impacted by the coronavirus pandemic. 

Existential forces have been responsible for quite a few businesses having to reduce staff working hours, either as a mandatory or voluntary measure. In a world of tough choices, often that action was the most reasonable way to cut costs while preventing redundancies and furloughs.

Months into the pandemic and with more restrictions being put in place again for the foreseeable future at least, what began as a short-term fix to weather the economic pressures of the COVID-19 outbreak now has some employers rethinking the possibilities of how they can restructure jobs to “work” effectively outside of the traditional work-week model.

In doing so, employers are responding to a growing appetite for part-time and flexible working as people re-evaluate their own work/life balance situations.

The economic benefits of allowing a higher proportion of staff to choose reduced hours on a more permanent basis could be beneficial for companies already operating on historically thin margins.  While it’s too early to see widespread policy changes happening, some companies are already actively planning to offer more part-time and flexible work to meet the desires of those who no longer wish to work a traditional 8-hour day/40-hour work week.

Among the numerous repercussions of the “coronavirus economy,” one may be the growing realization that office employees actually can take back some control of their time – that they can still do good work while structuring their work days, weeks or months differently. 

Any lingering stigma once associated with working fewer hours, working from home, or leaving the office early to pick up children has pretty much disappeared.  Employees doing any of those things are no longer the exception – and hence there’s no longer the guilt associated with bending or breaking the rules of attendance at the office.  And that’s before factoring in the economic attraction of saving thousands of dollars per year in commuting and other travel-related costs.

One chief marketing officer, Amanda Goetz of Teal Communications, goes so far so to declare that the 40-hour work week won’t exist in 10 years.  “The way companies operate now, there’s no need to ‘own’ someone’s calendar as long as you know they have very clear metrics and can hit their goals,” this manager emphasizes.

What are your thoughts?  How much will the recent changes be permanent going forward … or will we soon return to the paradigms of the pre-pandemic office world?  Please share your perspectives with other readers here.

The COVID pandemic and the race to raise digital skills.

Phillip Nones Economics, Education, Employment, Human Resources , , , ,

The Coronavirus pandemic has certainly made its mark on many markets and industries – some more than others, of course. But one consequence of the events of 2020 appears to cross all industry lines. 

Because of the rapid adjustments organizations have been required to make in the way jobs are performed – borne out of necessity because of health fears, not to mention government edicts – workers have been forced to come up the digital learning curve in a big hurry in order to do their jobs properly.

This “digital upskilling” dynamic isn’t affecting only office workers.  It’s happening across the board – in the private and public sector alike. 

Simply put, digital upskilling isn’t a matter of choice.  If workers want to remain relevant — and to keep their jobs — they’re having to ramp up their digital skill-sets without delay.

Moreover, the new skills aren’t limited to the efficient use of mobile devices, digital meeting/presentation functions, cloud applications and the like.  According to LinkedIn’s recruitment data, highly in-demand skills over the past few months encompass wide-ranging and comprehensive knowledge sets such as data science, data storage, and tech support.

Not so long ago, there were “tech jobs” and “non-tech jobs.”  Now there are just “jobs” – and nearly every one of them require the people doing them to possess a high comfort level with technology.

Will things revert back to older norms with the anticipated arrival of coronavirus vaccines in 2021?  I think the chances of that are “less than zero.”  But what are your thoughts?  Please share your perspectives with other readers.

As the American workplace reopens, not all employees are onboard with returning to the “old normal.”

Phillip Nones Business, Employment, Human Resources, Social Commentary , , , , , , , , , ,

A new survey finds that nearly half of employees who are currently working from home want to keep it that way.

The forced shutdown of the American workplace began in mid-March. Only now, ten weeks later, are things beginning to open back up in a significant way.

But those ten weeks have revealed some interesting attitudinal changes on the part of many employees. Simply put, quite a few of them have concluded that they like working from home, and don’t much care to return to the “traditional” work routines.

It’s an interesting development that illustrates yet another manifestation of “the law of unintended consequences.” For decades, the opportunities to work from home seemed to be a realistic proposition for only a distinct minority of certain white-collar workers and top-level managers.

Reflecting this dynamic, prior to the Coronavirus outbreak just ~7% of the U.S. private sector workforce had access to a flexible workplace benefit, as reported in the 2019 National compensation Survey released by the Bureau of Labor Statistics.

Suddenly, working from home went from being a rarefied benefit to something quite routine in many work sectors.

In late April, The Grossman Group, a Chicago-based leadership and communications consulting firm, conducted an online survey of nearly 850 U.S. employees who are currently working from their homes.  A cross-section of age, gender, geography, ethnicity and education levels were surveyed to ensure a reliable representation of the U.S. workforce.

The topline finding from the Grossman research is that nearly half of all workers surveyed (48%) reported that they would like to continue working from home after the COVID-19 pandemic passes.

The reasons for preferring work-from-home arrangements are varied. Certainly, the prospect of reduced commuting time is a major attraction, along with other work/life balance factors … and while some employees have found that setting up an office in their home isn’t a simple proposition, it’s also clear that many employees were able to adjust quickly during the early days of the workplace lockdown.

David Grossman, CEO of The Grossman Group, sees in the survey findings a clear message to employers:  Worker preferences have evolved rapidly, necessitating a re-imagining of traditional ways of working. Grossman says:

“A great deal has changed in employees’ lives in a short time, and if we want them to be engaged and productive, we’re going to have to be willing to meet them where they are as much as possible … that’s a ‘win-win’ for companies and their people.”

He adds:

“Many employees have gotten a taste of working from home for the first time – and they like it.”

Interestingly, the Grossman Group survey found practically no generational differences in the attractiveness of a work-from-home option; whether you’re a Baby Boomer, a Gen X or Gen Z worker, the attitudes are nearly the same.

Of course, not every type of work is conducive to working remotely. Many jobs simply cannot be done without the benefit of a “destination workplace” where mission-critical machinery, equipment, laboratory and other facilities are accessed daily. But the COVID-19 lockdown experience has shown that employees can be productive no matter where they are, and a “one-size-fits-all” approach to the workplace likely won’t cut it in the future.

This might be a little difficult for some people to hear, but employers will have to set aside concerns about potential slackening employee motivation and productivity in a remote working environment, lest they lose their talent to other, more flexible employers who are figuring out ways to manage a remote workforce effectively over the long-term.

As David Grossman contends, “More flexibility adds value to the employee experience, builds engagement, and brings results.”

Additional findings from the Grossman Group research can be accessed here.

What are your thoughts on the topic, based on your own experiences and those of your co-workers over the past 10 weeks? Please share your opinions with other readers here.