The March 8 jobs report showed that the U.S. economy added just 20,000 jobs in February, dramatically lower than the 180,000 estimate. While this looks horrible, and it is, we saw the economy add 311,000 jobs in January, so the dip in February, the worst number in 17 months, might be less negative that it appears.
Still, companies are reporting that they want to hire, but are having trouble finding qualified candidates. The question is: Is there a lack of qualified candidates, or are employers just not offering what potential employees want?
In the not too distant past, when cellular phones became commonplace, and texting emerged as the preferred method of communications for millennials, a new form of social interaction was born — breaking up via text.
I can recall the negative backlash, mostly within older generations, to this new way of ending a relationship. Our more traditional sense of appropriate social behavior made this seem impersonal and somehow socially objectionable.
Fast forward to today, and now receiving a text from an ex announcing a breakup would probably be viewed as overly formalistic and unnecessary.
These days the acceptable form of communication for ending a relationship is “ghosting.” Ghosting, for those unfamiliar with the term, is when someone wants to end a relationship, so they simply disappear. They don’t call, they just stop all communication and contact, and sooner or later the other person gets the message.
Ghosting has evolved. These days it’s not just for ending a personal relationship. Millennials use ghosting to end employment as well. If they don’t like their job, they just stop showing up. Eventually the employer realizes that they are not coming back, and they have to find a replacement.
There are some interesting possible reasons that younger generations find it acceptable to end employment engagements in this way. There is a trend away from focusing on material things, and more on quality of life — travel, family, intellectual pursuits and the like.
A complimentary trend is for younger people to remain in the family home even after college, graduate school and well into careers. These two trends result in potential employees not needing or wanting to earn sizable incomes, or at least there is not as much of a focus on money as in older generations.
Millennials also are more educated and skilled, and their skillsets are technology-related, which gives them much greater flexibility in terms of the types of jobs they can secure.
The consequence for employers is that younger people are much more difficult to deal with. They are harder to hire, tougher to manage and much more fickle when it comes to sticking it out for the long term.
While this may be difficult for some employers to deal with, and many others may not have even understand the challenges they now face in terms of finding good employees, there are some significant positives, both for employees and for the economy.
For employers, the threat (or in some cases certainty) of employees ghosting the employer, if they decide they don’t like their job anymore, has been forcing some significant changes to the way employers treat their employees.
Today, and I strongly expect this trend will continue to accelerate in the future, employees are demanding more flexibility with regard to work schedule, work environment and working remotely. While many companies — especially early stage firms and technology companies, in particular — have already embraced these new trends, most traditional, large businesses have been slow to respond.
Millennials want to work when they want to work, and when they don’t have something more important scheduled. But for many, especially those who work in technology-related fields, working at night, on weekends, or intermittently throughout the workday, is mandatory.
The challenge relates back to the changing social norms with regard to a focus on quality of life. If a work schedule is too rigid, meaning it is too restrictive on the employee, preventing them from doing the other things in life they value more than work, they will walk away.
Since they don’t care so much about money, they believe (and rightly so) that they can easily find another job.
Employees want to work in a positive, motivating and enjoyable environment. Again, many smaller companies and tech companies in particular have embraced this trend, providing all kinds of amenities and perks for their employees, such as coffee bars, napping pods, game areas and free food with chefs on site.
I remember back in the 1980s when Michael Milken was running Drexel Burnham Lambert’s junk bond operations (before he went to prison for securities fraud among other things). He was probably the first employer to see the benefit of keeping employees happy, and, more important, keeping them at the office and working. He offered similar perks — gyms, chefs, free food and the like.
Of course, he would fire people who didn’t work 20-hour days, but that’s another story. These days it’s not about keeping people in the office, it is about providing them with an enjoyable workplace so they are happy, motivated and, most important, so they don’t quit.
Probably the most critical aspect of hiring and retaining good employees is providing them with the option to work remotely. The biggest complaint I hear from employees today is that they don’t want to be on a set schedule that requires them to get up, take a shower and go to an office every workday.
The trend toward working remotely is probably the most interesting developing trend in the economy and society today, and it has some very broad and exciting implications.
If we think through what it will mean for the economy as more and more people work remotely (from home or from wherever they choose to work), it is far reaching and revolutionary. Think about things like traffic, gasoline consumption, pollution, road maintenance costs, workplace violence and discrimination, demand for cars and strains on public transportation, and the changes for businesses that cater to people working in offices like restaurants, dry cleaners and cleaning services.
These are but a few of the many changes that are taking place right now, and these changes will accelerate over the coming 10 to 20 years.
Companies that want to hire and retain quality talent need to understand these trends and adjust their policies accordingly, and they need to do it now. Those that make these adjustments will have a distinct advantage over the companies that do not, which will also have material consequences for the economy.
Employers that offer flexible work schedules, amenities and perks, and the option to work remotely, and that communicate these workplace characteristics to potential employees, will be able to attract and retain good people. Those that don’t, won’t.
— Craig Allen, CFA, CFP, CIMA, is president of Allen Wealth Management, and has been managing assets for foundations, corporations and high-net worth individuals for more than 25 years. He can be contacted at craig@craigdallen.com or 805.898.1400. Click here to read previous columns or follow him on Twitter: @MPAMCraig. The opinions expressed are his own.
