Bosses want employees back at their desks, while workers uneasily weigh their options.
Meanwhile, some analysts are saying, “WHAT recession?”
New predictions are popping up about remote work and the direction of the US economy after the hair-raising July jobs report showing 372,000 new jobs in June, exceeding expectations by about 100,000. The first quarter saw jobs exploding at a rate of 500,000 per month (on average), and the JOLTS report showed unemployment rates held steady at 3.6 percent, almost a 50-year low. Insurance industry unemployment rates took a slight jump in June to 2.8%. Layoff rates continue at a low .4 percent.
Could it get any better for employees right now? Well, yes. High gas and food prices are eating away at their (larger than last year) paychecks, and rumors of recession threaten their security.
We all look at the same numbers, and everybody — analysts, CEOs, your financial advisor — has an opinion.
Some of them will be wrong about the answers to the questions on top of our minds:
1. Will we surf in and out of a cooling trend and miss the recession tsunami altogether?
2. Who will decide the fate of the flexible work location?
In the push-pull between employee preferences and employer demands, the employees had the upper hand. But with the slackening of workforce in some industries, we may see more workers in the office. Why? Because that’s what half of employers want.
The Harvard Business Review put it succinctly: “Remote managers are having trust issues.” And with the dynamic starting to change with inflation and the specter of recession at their door, uneasy employees might feel obliged to report to the office to keep their jobs.
Insurance organizations can thank their lucky stars they’re not tech, finance, or other industries suffering through a hiring streak boom that went bust. Companies from Netflix and Uber to JPMorgan Chase are facing hiring freezes and even layoffs, but elsewhere, it’s still a squeaky job market. Returning to work may be a moot question to the companies that didn’t adapt well to remote, or over-hired over the last few years.
For the average employer in the private sector, though, including insurance, workers are in strong demand and still have the upper hand. Companies are treading carefully with existing workforce, as Gartner, a research and consulting firm, estimates U.S. voluntary turnover is likely to jump almost 20% this year from the pre-pandemic average.
This year could see 37.4 million workers quit, and if employers think this is the time to enforce return-to-office schedules, they might want to think again.
Wage gains and inflation will almost certainly demand another interest hike, similar to the one in June, expected to throw cold water on the red-hot job market. Until then, employees enjoy an uneasy advantage.
Now, here’s a bombshell: Some experts now say the recession we thought was imminent is not on the horizon after all. Some, like Commerce Secretary Gina Raimondo, wishes the public would “stop talking ourselves into a recession.” Suddenly, recession may not even be a “thing” in 2022.
“Hiring slipped only slightly in June, with no sign of a looming recession,” NPR’s All Things Considered asserts, echoing other recent assessments.
In fact, one national economist sees only a mild downturn, a necessary damper on rampant inflation. Sean Snaith, of UCF’s Institute for Economic Forecasting, successfully predicted the 2009 recession and resulting recovery. His assessment? We’ll see a shallow dip, nothing like the last one. And he estimates, with some confidence, it will last four quarters. (And, by the way, we’re already in it, Snaith says).
Despite the tight job market, some financial leaders are taking a hard line about requiring employees to return to their offices, recession or not.
Goldman Sachs CEO David Solomon famously ordered workers to return to the office and was widely quoted that the work-from-home era was “an aberration that we’re going to correct as soon as possible.” Remote work, Solomon said, “it’s not a new normal”. Historically, Goldman Sachs, like JPMorgan Chase and other Wall Street bastions, tend to over-hire during boom-times, then lay off in leaner periods. Some close to the brand describe their current headcount as “bloated” and Goldman is expected to enact a reduction in force by the fourth quarter. Will Solomon eat his words? We’ll know by this time next year.
Hybrid work, especially working remotely at least once a week, looks likely to continue, because it’s preferred by employees and tolerated by most employers (aside from Wall Street CEOs and the public sector). Continuing strong, the employment numbers are still in employees’ favor. Employment has exceeded pre-pandemic levels in the private sector, with higher numbers now than February 2020. But with inflation and the threat of a soft downturn, it’s going to be a tightrope walk for both workers and their employers about work location flexibility.
“Employers are likely to demand that you meet them midway,” according to SHRM spokesman, Johnny C. Taylor, and every company will have its own ideas about what “midway” means. If everyone bends a bit, hybrid may be here to stay.
And what about that looming recession? The US economy will slide into a cooling cycle that will effectively dial down inflation, according to Snaith, and we’ll emerge slowly, exactly the way we moved into it.
Don’t you love a happy ending?