Full Transcript Below
[ANNOUNCER]: Breaking down everyday workplace issues and diagnosing the hidden sickness not just the obvious symptom, our hosts James and Coby.
[COBY]: Did we lose a patient?
[JAMES]: No that’s just my lunch.
[COBY]: Hey thanks for joining us. I’m Coby, he’s James. Let’s get started with a question. What to expect from the labor market in 2023?
[JAMES]: It’s a good question. To answer, I like jumping in and trying to answer the question right off the bat, but for this one we need to actually take a step back, and in order to know where we are going, we need to first look at where we have been, and how we got here. So a very brief history lesson of the last five years in terms of labor market expectation and what’s been going on is, if we look at kind of pre-pandemic years 2018, 2019, even the first part of 2020, we saw an increase in both union strikes and union busting activities. The number of strike action that involved large numbers of employees grew drastically between 2016 and 2018. Pre-pandemic we’ve heard requests for better work-life balance, like mental health was already a big issue at that time, and people were talking about work-life balance a lot. Remote working kind of was starting to come to the forefront. But we heard a large percentage of companies saying we just were not there yet. We cannot make remote working a reality.
[COBY]: And you’re right and that was something that we saw a lot of. We started doing more virtual meetings with our clients, and we would… and stuff like that, kind of pre-pandemic. And it was like “Oh, there’s this thing called Zoom? and I’ve never heard of it, I’ll give it a shot!”. So it’s kind of funny now, to think of it that way. But yeah, you’re right there was a lot of people going like, “Oh, Why can’t I work from home?” “Oh well that’s not possible. You know work can only be done from the office, and everything. So don’t even bother ask about that, because that’ll just never happen.”
[JAMES]: “If you don’t have your bum in the seat, in the office, you’re obviously not being productive.”, right? That was the prevailing idea, right? We took a very traditional approach. The technology was there to support it and many, many, many people were already engaged in work from home activities, in a whole bunch of different sectors. But it had not become a… it had not really entered mainstream application. People were not yet taking advantage of the resources that were available to them.
[COBY]: It was kind of like a fringe benefit, like it’s more like; “Don’t take a sick day, take a work from home day., and still work but your home in your pajamas, so it’s more like a sick day”. That was kind of how a lot of companies justified it in some way. But it was never like an actual option to do work.
[JAMES]: Right and then the pandemic hit, right? And nobody’s working from the office, right? The vast, vast majority of people are, like we were in lockdowns all across Canada…
[COBY]: Across the world really.
[JAMES]: Across the world, yeah. I mean the lockdowns happen at different times but very, very few people were unaffected by lockdowns due to COVID. And suddenly what people had been asking for, businesses were forced to look at these options, right? And that’s why remote working and applications like Zoom, and Teams, and these tools that we use all the time now, really became mainstream. And it’s also why we had a lot of blunders with them, and people wearing a suit and jacket in their underwear, because they never have to stand up until they actually forget and they go let their dog out. And all right, there were some amusing mishaps.
[COBY]: Filters and stuff like that.
[JAMES]: It was entertaining But necessity drove the need to for adoption, which it always does, right?
[COBY]: Exactly and but also there was kind of… the two options was pretty much, during lockdowns for the non-essential worker was either layoff or remote work. So let’s not forget like massive layoffs, you know people ended their jobs, but you know, so either people were home whether it was they were working from home, or they were just unemployed and at home. But it really became the two things, it was remote work or layout for a lot of people.
[JAMES]: And we cannot emphasize enough how damaging that layoff structure was in terms of the effect that it had on the labor market as a whole, right? Businesses… the common response to challenging situations, whether that’s a global pandemic, which we had, you know, no basis for, like our reaction to. Or whether it’s a recession, the default is to cut costs and when you view employees as a cost, as just a commodity that can be cut, it causes a substantial number of problems. And we are still experiencing the problems that have come from that reaction, right? When businesses… that was one of the big way, the big reactions that businesses had to the pandemic was, “Our business, we don’t know what’s going to happen to our business, we don’t know what’s going to happen to our contracts, we don’t know when we’re going to be able to bring people back into the office, so we’re just going to lay everybody off and hope for the best. Hopefully we can, if we can recover, we can bring people back.” The problem is that showed… when you do those types of mass layoffs, it shows the labor market that they are expendable, right? We’ve talked about this in other conversations, you know, the relationship that you have with the Labor Market you know it’s very… it operates in a very similar way to Consumer Markets and when people feel like they are not getting the value, when people feel like they’re not being treated properly, either as a consumer or as a part of that Labor Market, they’re not going to engage with you. Anyways that’s a little bit of a tangent. Let’s jump back into our timeline so we can see where we’ve been, and where we are now, so that we can talk about where we’re actually going. All right, so during the huge disruption people collectively realize how stressed, overworked, and burned out they were and unappreciated. And this led to what became known as The Great Resignation, right? People… once the lockdowns were over and people were being forced back into that work environment, they had an opportunity to step away and they saw what life could be without that stress. And that turned into millions and millions of people either quitting, stepping back in hours, or finding new jobs. And actually Coby, you have an excellent analogy that you’ve talked about before with this.
[COBY]: Yeah, okay. We give webinars, or even actually, even in our very first podcast episode on Quiet Quitting I talked about the Boiling Frog Theory. So again I’ll just recap that real quick because if you already heard Episode One, I don’t wanna you to hear the same thing over and over and over again. But the idea is that, when you put a frog into temperate water and you slowly turn up the heat. The frog can survive even at boiling through adapting slowly over time. That is kind of what happened to all of us over the past like 20 years. We were all put into temperate water, like you know, decades ago. But slowly workloads got larger, the gap between… the cost of living gap got larger, more stress, more pressure, all this kind of stuff slowly turned the water up on us. And essentially we were there in 2019, in early 2020, boiling alive and then all of a sudden we were pulled out of our pots. When the pandemic hit and lockdowns happened and we were all home. And while we were there, like a frog pulled out of boiling water, we cooled down. And then when things started to become, you know, more operational again in the fall of 2020 and early 2021, the water was not turned down but the employers were like; “All right everybody. back in the pot!”, and we were like; “No we’re not, we’re not ready for that”.
[JAMES]: “I do not want to be boiled alive”.
[COBY]: And so, this was the reaction, why The Great Resignation really started to happen. And when this kind of came out, like we were giving webinar talks, and presentations, and talking to clients in this time, during late 2020 early 2021, we were saying “Listen, this is a golden opportunity for us to learn that the water is too hot. We need to address things like job dissatisfaction, we need to reduce the problems internally that are causing burnout, we have to turn the water down because people have realized… it’s collective realization has happened. We can’t unring the bell, it’s here and everyone knows it and things aren’t going to go back to the way they were.” And we said if businesses learn from this they will be, they will create a better more sustainable environment and culture with their employees that will stand the test of time, and allow them to almost recover at a much higher rate than those that don’t. But those that don’t, are going to experience, what we dubbed as, The Great Disengagement, people will say “Well I have to go back to work, I need a paycheck, so I’ll work for you, but I’m just gonna do the bare minimum.”, and that became what is now known as Quiet Quitting.
[JAMES]: Yeah and the I really it’s important to really emphasize that the conditions of the workplace is what kept that temperature hot. And without addressing that, that’s what we started to hear along those same lines, kind of in between The Great Resignation and before we started hearing the term the Quiet Quitting. We started to hear about the War for Talent, right? Because so many people were looking for new jobs because everybody wanted out of the environment that they were in. So they were looking for the better opportunity, which created this idea of the War for Talent and what was referred to as a labor shortage, although it’s not a really a labor shortage, it’s more of a shortage of actually decent jobs, but I won’t get on my soapbox right now.
[COBY]: Not right now.
[JAMES]: Not right now, but it’s coming trust me. But that transition of people stopping quitting and leaving, and then they start quitting the job and staying, is what happened with the transition from The Great Resignation to Quiet Quitting. So the question is, we’ve gone from this, we started back in 2018, well even before then, but 2018, 2019 mental health, work-life balance, conditions of the workplace, were top of mind, COVID hit, everybody was pulled out of the environment that they were in, and had an opportunity to really see how bad things had gotten. Businesses tried tossing everybody back into the pot without addressing any of those core fundamental factors of the workplace that caused the problems in the first place. And everybody’s reaction was “Hell no! I’m not going back!”, they jumped out of the pot, right? They could not stand the temperature. Businesses, many businesses, still have not addressed those core fundamental problems which caused… people need a paycheck. They will… the businesses that said “Well, I’m just going to ride it out and wait”, well, yeah. You can do that. But you’re bringing people into an environment that is too hot, so they are going to not quit the job and leave your organization, they’re going to quit the job and stay put and they’re just collecting a paycheck. Which is what you don’t want. It’s the businesses that actually learned from it, that started to invest in their workplace culture, those are the ones who made room at the top.
[COBY]: And this is going to be almost like “Spoiler Alert” for the end of this podcast, but the ‘lessons not learned’ is probably going to be the underlying theme here. Like, we… you know, I don’t mean “we” as as you and I, mean we collectively, people have been trying to say this is gonna happen, this is not good, it’s not sustainable, and most businesses again lean into that, I think we use the term another podcast, but the Implicit Bias to Convention, that the old ways are the better ways, and things will go back to normal if we just… so we’ll just ride everything out. But we’re saying, you can’t do that. The time has come, we have to adapt, and you have to learn from this. Because the problem is we’re coming into you know like you know like you know like times aren’t getting easier, they’re getting tougher, and if you keep not… if businesses who keep not learning from these constant lessons are going to be, are probably on borrowed time.
[JAMES]: Well and that leads us to where are we today. Right now in the at the end of 2022, we have record inflation, the cost of living is absurd all across the world. I can speak, like we can speak, specifically around the environment in Canada and because of proximity and how much U.S media we consume anyways in Canada, we’ve got a really good idea… you know North America, we can speak to with some confidence. Both of our countries Canada and the United States every indication says that we are headed towards, we are not currently in a recession, but we are headed towards a recession in 2023. We have… wages have not kept up with inflation so people are earning less today than they did a year ago. Everything is getting more expensive, gas is astronomical, groceries are astronomical, rent is astronomical, if you are… like housing costs are astronomical, everything is just so bloody expensive that this has a major impact on the Labor Market, and what they need and what they expect and what businesses are able to provide. Like this is going to… this is a difficult time for many, many, many people. We have, we’re heading into a recession every indication says that we are heading into a recession, and businesses… what is the typical response? How do businesses typically respond when it comes to a recessionary period? They lay people off, right? They cut costs marketing, which is a dumb thing to cut anyways, like I’m sorry but like if you… if you’re going to stop telling people about your product during the hard times you’re not going to get more sales. But anyways, marketing tends to be something that people cut, I see this a lot with small businesses especially. Labor, right? It’s trying… you cut what you feel is extraneous because we’re in survival mode, which I understand. We have to do what we feel is best for our businesses, right? We need the business to survive so that we have money throughout and afterwards. We need the business to survive so that we can employ people throughout and afterwards. But the response that we take as business owners to the looming recession… people have already, many businesses have already started prepping for the recession by laying people off.
[COBY]: Yeah and I think that, this goes back to what I said before. That I think the theme through this talk is going to be about not learning the lesson.
[JAMES]: Stop doing the same, stop making the same mistakes over and over again.
[COBY]: So what we use to try and clarify this big picture. So part of, I think, one of the advantages that we have in our work as workforce experts, we can see this from a historical perspective and we can always look at things from a psychological perspective. And that’s part of what gives us a little bit different view on things. So we look at this whole thing through the context of what we call the Fragile Grip Principle. Now what is the Fragile Grip Principle? Well it’s the acknowledgment that there’s a fragile relationship that is between employees and employers, and that relationship.. how it’s handled by employers greatly impacts the future success of the business. So there are three types of grips that the business uses to hold on to the fragile bond between itself and its employees. Now the first one is the Harsh Grip. This is where they grip too tight, they crush the fragile bond like a raw egg in their hand and they have oozing down the sides. They try and squeeze every ounce of productivity, or work, out of employees and put a strangle hold on their daily interactions.
[JAMES]: And this is stuff like, the mistakes that we see, this like incredibly restrictive non-competes or even probably far, far more common is invasive software on computers to track eye movement to make sure that people are sitting in front of their desks, right? Tapping into their cameras to monitor them when they’re working from home, key logging software that tracks every keystroke, right? These things are not going to build any type of trust or respect between you and your employees. All it’s going to do is showcase that you don’t trust people, you don’t care about people, and you’re not looking out for them.
[COBY]: And it’s kind of like, you know, so the individual managers may make the mistake in micromanaging, but the Harsh Grip is kind of like when the organization’s policies are too micromanage. Like it’s about crushing that relationship and pressing it to a point that you are mistakenly assuming that this extra attention, and effort, and control is improving output and improving productivity. When it is definitely not.
[JAMES]: I under… I get the logic behind it. Because the logic is we need to tighten our belts. We need to do more with less, or we need to squeeze every ounce of productivity to make sure that we can remain profitable. But you don’t increase productivity by squeezing the life out of somebody. You don’t… you don’t cut off somebody’s oxygen and expect them to run a marathon.
[COBY]: Yeah so and the whole idea of the Harsh Grip, you’re right it is that you know, we have to do more with less or whatever. But it’s a sense of, like you know, when things are tough, the more control I have, the more I can guarantee that we’re going to, you know last and succeed and ride this through. And what that does is it damages that fragile bond, that fragile relationship.
[JAMES]: I just want to talk very briefly about that relationship. Because we have to understand that it is perfectly normal and natural that employers, businesses are going to do what is best for them. We also need to acknowledge that it is perfectly normal and natural that employees are going to do what is best for them, right? This is the inherent conflict in the employer/employee relationship. You have two opposing sides that have different needs, right? They each need, they are each going to act in their own self-interest because we all do this. We all need to prioritize what is best for me and my family over what’s best for somebody else’s, right? I need to make sure that my family is fed, but the way that we approach this relation… that’s why the relationship is fragile. When we say there’s a fragile bond, it’s because of the inherent conflict there. but just because it’s fragile doesn’t mean that it isn’t… that we’re not able to sustain it through hard times. It means that it’s going to require more intentional effort to maintain that relationship during the hard times, then maybe it does when things are going really, really well.
[COBY]: And part of it is actually it just acknowledging its fragility. And not letting the fragility almost be its weakness. So let’s move on. So with that, so the first one we mentioned was the Harsh Grip where you crush too tight. Now the second one, second mistake that a lot of businesses make is the other end. The Weak Grip, where they grip it too loose. Where they neglect the fragile bond, like dropping that raw egg out of their hands.
[JAMES]: Like laying people off.
[COBY]: When they see the hard times, yeah they abandon the rapport and the relationships at the first sign of trouble, their gut reaction is “Well these things are getting hard, everybody out!” Which again, makes the, you know, which is more of the common the reaction, and it’s increasingly frustrating on the workforce side, when you see the recessions coming and all these big companies are laying people off, and then they’re posting record profits and stuff like that. And those, that type of contradictory information can make, can even damage what’s an already, you know, broken relationship between the employee and employer even worse.
[JAMES]: But I mean and that’s also that right there, that comment about you know the inequality in laying people off and posting continuous quarter, after quarter, after quarter profits. That going back to what we talked about earlier like there’s a reason why unionization rates and union activity has become more prominent with large strikes, with big recruitment efforts, with big unionization efforts especially in industries that have traditionally been very, very hard for people to unionize. Starbucks has just gone gangbusters with the unionization like props to them and the organizers there, because they’ve done an amazing job. Amazon which has resisted unionization for a long time and they’ve got a firm grip, like they squeeze the life of most people. I don’t think I’m gonna get any hate mail from Amazon, but if I do it’s all good.
[COBY]: We’ll just put it on the pile with the rest of your other hate mail.
[JAMES]: Yeah well I’m used to people not liking me, it’s okay.
[COBY]: So this brings us to the third group which we call the Stable Grip. And this is actually when they can grip with balance and support to actually maintain the Integrity of the fragile bond. Where they provide the required attention and required care, and they understand the long-term mutual benefit that the relationship between the employee and employer was designed for. And this is when we say about learning your lesson, is to learn, maybe we need to stop crushing people with the Harsh Grip or letting people drop with the Weak Grip and actually lean into the Stable Grip and maintain the integrity of this fragile bond between employees and employers.
[JAMES]: And I just want to say that with this Stable Grip we’re not saying that you can’t ever lay somebody off. Business needs will be paramount. We will have to do what is in the best interest of our businesses, full stop. But we can do that in a way that is respectful of the individuals that we work, that who work with us, and for us. And that is one of the cornerstones of this Stable Grip, is transparent communication, right? Simply acknowledging that there are, like we all know that we’re heading into hard times, being upfront with people about that, and saying and, you know, making a commitment that we’re going to do everything that we can to minimize the impact. Gives people a sense of care. That they are actually seen and valued as a person, right? These things can make a difference and if you can avoid the mass layoff approach, or if you can avoid the strangling the life out of people approach, which you probably want to avoid generally strangling the life of a people just as a like hard rule. Just don’t do it. Yeah, I need to stop cracking jokes in the middle of my train of thought because now I’ve lost it, but those who can learn from the lessons of the past, right? If we can actually move towards respecting the fragility of the relationship, acknowledging that and actively working to find a balance that will create many, many more opportunities for you as a business.
[COBY]: Yeah, so the one thing that I think is really important for people to know, that we’re not saying that, look out for the Harsh Grip and the Weak Grip that’s coming, we’re saying that’s happening now. The Harsh Grip is what is led to what is a new term du jour, which is Productivity Paranoia, we did a video on our YouTube channel, Solutions Explained by Roman 3, a little while ago that explains that in more detail. But it’s the idea of, that overbearing fear, that paranoia that people are not working. So they ramp up the oversight to maintain that. And then on the Weak Grip side that we’ve actually seen this, we’ve seen this a lot since COVID because this was kind of, since the lockdowns, because this kind of was, you know, how this was responded to. And I think the the term that we see for the Weak Grip is the “No One Wants To Work Anymore” mentality. That’s really what the Weak Grip looks like. The effect of, the consequences of the of the Weak Grip, that’s what that looks like now.
[JAMES]: And Spoiler Alert! It’s not that nobody wants to work anymore, it’s that they don’t want to work for you anymore.
[COBY]: Yes, so if you’re, if you are a business that has leaned into the Weak Grip…
[JAMES]: You can change that.
[COBY]: And that’s really what we’re trying to get to. Is that we are on the precipice of needing to make some hard decisions, and we’re, and some of them are people already are making them. But we’ve been, you’ve been, we’ve been given enough lessons to learn that we can avoid the mistakes of the Harsh Grip and avoid the mistakes of the Weak Grip and start to lean into the Stable Grip. Because the Stable Grip is largely what we talk about when we’re talking about things like a strong employer brand, or you know the creating the, becoming a culture leader, these are not the same thing, but those are kind of the mentality of employees are not expenses, they’re assets. You know, we invest in people. We don’t… you know, they’re not a commodities. This type of mindset, mentality, approach to business and leadership. And this humanistic view of the world can, it can be… it exists within the Stable Grip. And it’s almost like we’re saying, what we are saying is that the humanity, the humanity approach, the understanding people as people, and seeing them as people, that is a true option that can actually allow you to weather the storm.
[JAMES]: Yeah, absolutely. And so we need to go back to our original question of what can people expect in the Labor Market in 2023? Well we know that, we know that we’re headed into a recession. And what happens, what is the predominant response when recessions hit it’s to lay people off. What we can expect is a race to the bottom. In terms of how businesses treat and operate, operate and treat whatever, their employees. But here’s the thing, and this is really what I want to convey to people, is that in a race to the bottom, it leaves a whole lot of room at the top for new players to become leaders, right? When everybody else is making the same mistakes that they’ve made in the past, then it gives you an opportunity as a conscientious employer as a business that wants to progress beyond the recession. Because we know the average length of a modern recession is 10 months. This is not… recession is not going to last forever. It’s going to feel like it’s lasting forever, and it’s going to be a really difficult time for all of us, but it’s typically lasts about three quarters of the year or maybe a little bit more than that. So what are you going to do coming out of the, or coming into the end of 2023? Where the recession is at an end? And now you’ve destroyed your reputation in the Labor Market, or now you have laid off all of your top talent they’ve been poached by other people? We already are experiencing tremendous challenges in attracting and retaining good people, good workers, that’s only going to get worse if you continue to act in the way that you have in the past of laying people off or suffocating them with control.
[COBY]: Yeah, and so this is really what we feel, at Roman 3, is coming next. And we’re calling it “The Amazing Race To The Bottom”. Because you know everything needs to have a fun little name. But really, those are use the Harsh and Weak Grip, those ones are going to be racing to the bottom, where they’re going to be sacrificing the long-term reputation and the integrity of their fragile relationship with employees, for short-term gain. Going beyond what’s operationally necessary, and just leaning into either the Weak Grip or the Harsh Grip to try and maintain control or just to do what they’ve always done. But what James is saying by “there’s room at the top”, what that means is that that this provides an opportunity, and it’s a big opportunity for people, that acknowledge the value of the Stable Grip to say, “What if we did only one was operationally required to cut costs? What if we actually let employees know that there was actually going to be, we’re going to do everything we can, everything creative, everything collaborative, everything Innovative, we can try and maintain this fragile relationship and support them, and our long-term success with them and try a weather the storm together?” Because we see businesses that lean into the cultural leadership, that lean into the, you know, these progressive and human-centric workplaces, that kill it in the Labor Market. That never have to worry about about filling vacancies, their talent pipeline is strong and secure, and their consumer reputation is equally as strong, because it’s leveraging the value of the Labor Market. And there… and what’s so funny is, like we work in different groups and we see these these rare few Diamonds in the Rough that are these, you know, these industry leaders in the labor end especially. And we’re like, you know what there is enough room for like four, or five, or six of these, of their competitors to be there with them. That’s how big this room in the top is. But everyone is fighting for, or jocking for space at the bottom it seems like.
[JAMES]: Well and that’s just it. And when your competitors start laying off their talented employees, you want to start investing and picking them up, right? If you’re struggling for talent, you actually have an opportunity coming up to pick up some excellent people who are going to be treated like garbage by some of your competitors.
[COBY]: Yeah, and I mean because, again, tough times tend to bring out the worst in people and businesses. But what we’re trying to say is to learn the lessons from the past, and break the cycle of these mistakes that we always make when it comes to hard times and recessions, and really value and lean into the Stable Grip. Okay so I think I’ll give us a bit of a summary and then we’ll we’ll call it a day. So we want to look at what’s going to happen in 2023 for the Labor Market, we need to understand of where we’ve come from and how we got there. Pre-pandemic, we had a raise in union strikes and union busting and people wanting to work from home that they were told was not an option. Then we had, you know, the pandemic kit and all of a sudden it became a real option for people, but people got to see what their lives were like without the stress, and being overworked, and being burned out, and unappreciated at work. And this gave them a collective realization that they were being boiled alive in their old, in their in their old life, pre-pandemic, and they weren’t going to put up with anymore. So this was an opportunity for businesses to learn to adapt and cool the water in the proverbial pots but many, many, many didn’t. And that caused a wave of what is now known as Quiet Quitting, where people are actively disengaged as a form of protest against the hot water that they are sitting in. And we are coming into a recession, resulting from the inflation everything, like everything, that that has been happening to date. We at Roman 3 use the context of the Fragile Grip Principle to say that there is, a that the way that we handle this fragile relationship that we have when the businesses have with employees, is something that is going to be very telling of how we’re going to weather the storm. And we need to realize that we need to learn from the mistakes of the past and all the lessons that we have been being forced to see. Like Quiet Quitting and like Productivity Paranoia, and all this other kinds of stuff. And all the union action. We need to do things differently, that we cannot lean on convention to handle these new issues. And when it comes to the Fragile Grip Principle, the best way to think of it is that using a Harsh Grip crushes the egg that’s in your hand, destroying its integrity. Using a Weak Grip neglects the egg in your hand, dropping it at the first sign of trouble. And using a Stable Grip supports the egg in your hand, balancing its care. Balancing the care of the fragile bond that your business has with employees is a very viable and long-term successful option to weather the storm that’s going to be the coming recession. All right, anything else James?
[JAMES]: No I think that’s good, I’ve said a lot.
[COBY]: All right so that about does it for us. So for a full archive of our podcasts and access to the video version hosted on our YouTube channel visit our website at roman3.ca/podcast. Thanks for joining us.
[ANNOUNCER]: For more information on topics like these don’t forget to visit us at roman3.ca. Side effects of this podcast may include improved retention, high productivity, increased market share, employees breaking out in spontaneous dance, dry mouth, aversion to the sound of James’s voice, desire to find a better podcast…