00:00:00
well the workplace remains with elements
00:00:02
that are very much in flux at the moment
00:00:04
we've seen people switching jobs at
00:00:07
record levels over the last couple of
00:00:09
years and of course uh remote work
00:00:11
remains a component of the workplace now
00:00:13
and most likely in the future but what
00:00:15
should we expect as we head into 2024
00:00:18
Matthew Bidwell is Professor of
00:00:19
management here at the Wharton School
00:00:21
and he joins us to kind of go over and
00:00:23
give us some ideas on what he thinks may
00:00:25
play out great to see you Matthew good
00:00:27
to see you too let me before we talk
00:00:30
about 2024 let's just look at 2023 first
00:00:33
and realistically what do you think are
00:00:35
the main takeaways when you think about
00:00:37
the workplace and and and careers and
00:00:40
the labor force glad you're asking about
00:00:42
2023 first mainly because we know that
00:00:45
experts do no better at predicting the
00:00:46
future than anybody else so I think I
00:00:48
can give you a good rundown on what
00:00:50
happened 2024 it's anybody's guess but
00:00:52
let's start with
00:00:54
2023 I think of 2023 as being the year
00:00:57
where one interesting thing happened and
00:00:58
two interesting things did didn't right
00:01:00
so the interesting that happened
00:01:03
um the labor market cooled down and so
00:01:07
we saw 2021 and
00:01:10
2022 genuinely historic levels of
00:01:14
attrition genuinely historic levels of
00:01:18
job openings it was a huge Haring binge
00:01:20
it was very hard for employers to find
00:01:22
people they poached anybody that they
00:01:24
could get huge amounts of Mobility like
00:01:26
you said particularly for um hourly
00:01:30
workers if you're an employer this was a
00:01:32
nightmare if you're the fed this was a
00:01:34
problem because you're worrying about
00:01:35
wage inflation if you're an employee in
00:01:38
particularly one with say a high school
00:01:41
education so these employees have been
00:01:43
overlooked in the labor market it was a
00:01:45
fantastic couple of years um 2023 things
00:01:49
cooled down when you look at the
00:01:51
aggregate statistics we're back to 2019
00:01:54
and I remember being in here chatting to
00:01:55
you in 2019 and were saying well since
00:01:57
it's a overheating hot labor market are
00:02:00
very tight and employees have to think
00:02:01
more so I mean it's still we're not in
00:02:04
recession by any stretch but we're we're
00:02:07
back to something that people recognize
00:02:09
as a little more normal and in certain
00:02:11
sectors perhaps some of the ones that
00:02:13
craziest so Tech particularly outside AI
00:02:17
you know it's been a very marked
00:02:18
slowdown so I think that's the
00:02:20
interesting thing that's happened like
00:02:22
some reversion to something looks like
00:02:24
normal um the two interesting things
00:02:26
that didn't happen um one I think is
00:02:29
around remote work um there was a huge
00:02:31
amount of noise about return to office
00:02:34
um and you saw some high-profile
00:02:36
companies particularly Amazon some of
00:02:39
the big Banks it's real kind of we're
00:02:40
putting our foot down from now on you're
00:02:42
going to be back in the office it gives
00:02:44
the impression that we seen kind of a
00:02:46
decline in remote work there are a
00:02:48
couple of series of Statistics that I
00:02:50
look at to understand this there's a
00:02:52
wonderful survey that's done monthly by
00:02:55
um a team based in
00:02:57
Stanford also Castle systems the do
00:03:00
badge swipe data they would release
00:03:02
their back toor barometer um weekly kind
00:03:06
of showing what's happening with office
00:03:07
occupancy they show basically a static
00:03:11
picture all year so while all the noise
00:03:13
has been about return to office you
00:03:15
haven't seen an increase in office
00:03:16
occupancy it stayed flat at around 50%
00:03:19
you know wibbles up and down a little
00:03:20
bit down a bit in the summer back up a
00:03:22
bit afterwards when you look at the
00:03:24
surveys it's the same and so we've
00:03:27
stayed where we were I think we're still
00:03:30
trying to negotiate what the future is
00:03:32
going to look like but increasingly I
00:03:34
think companies have kind of settled
00:03:37
into a variety of different modes um and
00:03:41
I think in a way that is um pre pandemic
00:03:45
we basically had a one-size fits all
00:03:47
like every company you know they might
00:03:49
have a couple of people remote but
00:03:50
basically normal as you're in the office
00:03:52
five days a
00:03:53
week um I think compared to so I
00:03:55
remember talking about this with people
00:03:57
last year and I was saying I could see
00:03:59
three scenario iOS for remote work so
00:04:01
one is there's a recession just everyone
00:04:03
gets dragged back to the office a second
00:04:05
one is kind of a new normal where it's
00:04:07
like three days a week in the office for
00:04:09
everybody and a third is kind of horses
00:04:11
for courses where kind of different
00:04:13
companies have completely different
00:04:15
policies depending on what works for
00:04:16
them I think we're moving towards that
00:04:18
third that third scenario and so I think
00:04:21
there's kind of be the aggregate
00:04:22
statistics haven't changed but I think
00:04:24
there's been some clarification and I
00:04:25
think we're moving towards a world where
00:04:28
different companies are settling in
00:04:29
completely different policies and
00:04:31
practice so that's one thing that in a
00:04:32
sense hasn't changed so much the third
00:04:34
thing is you mentioned AI
00:04:37
um yeah it has seriously impacted a few
00:04:40
jobs so I think graphic designers have
00:04:43
had a really rough year um I think the
00:04:48
people who have run these paper mills
00:04:50
where they kind of sell essays to
00:04:51
desperate um college students I think
00:04:53
chat GPT has devastated their business
00:04:56
I'm not so unhappy about that but um if
00:05:00
you look at the average um employee it
00:05:03
hasn't yet been right and you know I
00:05:05
mean there
00:05:06
were there were some clearly ludicrous
00:05:09
takes this time last year that you know
00:05:11
within six months various kinds of work
00:05:14
will be dead that was obviously wrong I
00:05:16
me I think what's happening is like I
00:05:18
said all predictions are wrong what's
00:05:19
happening is reasonably predictable
00:05:21
which is it's happening slowly like I I
00:05:24
think it could well have a big impact on
00:05:27
many jobs but this year has been a year
00:05:30
of people starting to figure out what's
00:05:32
happening with it rather than wholesale
00:05:34
implementation do you think then the
00:05:36
impact will be complimentary to the
00:05:39
workers that are in the workplace or is
00:05:41
there an element where you are still
00:05:44
focused on how much it could take away
00:05:48
like the leadership of companies see the
00:05:51
benefits of AI they know how it can can
00:05:54
save on the bottom line by by not having
00:05:56
employees or is there a even a little
00:05:59
bit of a combination of both of those I
00:06:00
mean I I would have thought it's going
00:06:02
to be both right I mean I you know
00:06:04
everybody is saying it's not people or
00:06:06
AI it's people with AI and right I'm
00:06:09
sure that's true but you know if people
00:06:12
with AI is a good solution ultimately
00:06:14
you probably need fewer people for a lot
00:06:16
of and so the question is when we have
00:06:18
people with AI does it drive down the
00:06:19
cost so much we can expand the market
00:06:21
and hire more people or once we have
00:06:24
people AI do we just need fewer people
00:06:26
and probably across different
00:06:27
occupations it's going to be different
00:06:30
let me uh go back to talking about
00:06:32
remote work because as this all started
00:06:34
to develop uh we obviously had to have
00:06:37
remote work because of the pandemic and
00:06:40
as the return to office was was playing
00:06:42
out I I just had the sense and this is
00:06:44
my opinion uh that we were eventually
00:06:47
going to see and it may be a longer
00:06:49
period over time that we will get back
00:06:53
to pretty much everybody being back in
00:06:55
the office but it doesn't even seem like
00:06:58
that's the case like companies have
00:07:00
adjusted and they understand what kind
00:07:03
of The New Normal is uh the voice of the
00:07:06
employee maybe has a little bit more
00:07:08
bite to it than it did back in 2019 what
00:07:11
they want around remote work and these
00:07:13
benefits obviously has a little bit more
00:07:15
bite to it where do you think then
00:07:18
remote work is kind of headed I mean the
00:07:21
way I think about it um what Co taught
00:07:24
us I mean it just remote work was
00:07:26
unimaginable right pre preco this idea
00:07:29
that could do most of our work staying
00:07:31
home just didn't even occur to us right
00:07:33
then we do it and we can do most of our
00:07:35
work and I think what it made Salient
00:07:37
was the cost of coming into the office
00:07:40
like so a lot of people have a commute
00:07:42
that's half an hour or an hour each way
00:07:45
right so that's an hour or two hours of
00:07:46
their day just to get into the office
00:07:49
sure um and so the question is when are
00:07:52
those costs
00:07:53
worthwhile and I think kind of the
00:07:57
previous answer was every day you should
00:07:59
be
00:08:00
here not really I mean there's a lot of
00:08:02
work I get done as well and in some
00:08:03
cases most people find that the kind of
00:08:05
the focus work the Deep work they do
00:08:07
better at home yeah um and so if most
00:08:10
things I can do just as well and I don't
00:08:12
have to incur an hour or two hours cost
00:08:15
and by the way that cost is not just
00:08:17
mine right that that is to some extent
00:08:19
coming out of my budget for time that I
00:08:21
can spend on work things so I'm going to
00:08:22
do less work as well because I have to
00:08:24
do that Comm if I can take that and turn
00:08:27
it into productive time what why would I
00:08:29
be coming into the office sure yeah now
00:08:32
there are some benefits to being in
00:08:34
person um it's good for building trust
00:08:38
it's good for managing difficult
00:08:40
conversations and tricky conflicts it's
00:08:43
good for getting to know a broader range
00:08:45
of people than those who we just kind of
00:08:47
encounter directly through our work it's
00:08:49
good for mentoring and so there are
00:08:51
definitely some things that we do better
00:08:54
in the office so there are benefits of
00:08:56
being um in the office there are cost of
00:08:59
going to the office and so I think where
00:09:01
we have tended to come out you that
00:09:03
ratio looks completely different for
00:09:05
different companies and different kinds
00:09:06
of work if the benefits are huge so if
00:09:09
I'm a financial services company where
00:09:11
most of my employees are under the age
00:09:13
of 30 right well actually a huge amount
00:09:16
of what I'm doing is mentoring and
00:09:17
training sure and they all frankly we're
00:09:19
all in New York so they have pretty
00:09:20
short commutes yeah then the idea that
00:09:23
actually the benefits of being there in
00:09:24
person that way the cost that's
00:09:26
plausible but in most cases actually
00:09:29
would say given there are benefits and
00:09:30
there are cost we want to bring in
00:09:31
people for some purposes so at the
00:09:34
beginning of a project we should all
00:09:35
come together when we hire new employees
00:09:37
they should be on staff we want to have
00:09:39
some All Hands meetings from time to
00:09:41
time yeah where everybody's here you
00:09:43
want to do that to get those benefits of
00:09:46
being in person but we can get probably
00:09:49
80 90% of those benefits right while
00:09:52
incurring like 10% of the costs by only
00:09:55
bringing people in once a week once
00:09:57
every two weeks and so you're seeing I
00:09:58
think depending on the kind of work
00:10:00
people are doing different ways of
00:10:02
balancing those costs and benefits and I
00:10:05
I think to most people it just seems
00:10:06
silly now that kind you have to be there
00:10:08
every day and keep incurring those costs
00:10:09
with seriously declining marginal
00:10:11
benefits so off of that then where do
00:10:13
you think companies mindset mindsets are
00:10:17
right now about their employees about
00:10:20
retaining them about losing them because
00:10:22
that you know go back to 2021 and early
00:10:24
2022 it was a massive concern because
00:10:27
you saw such a high level of turnover
00:10:29
the quits rate was you know something we
00:10:31
hadn't really talked about a lot uh but
00:10:34
it became a monthly concern for so many
00:10:37
firms so as we've hit the end of 2023
00:10:40
and into 2024 where do you think that
00:10:42
mindset is the quit R is still
00:10:44
reasonable I mean we're not yet at a
00:10:46
place you know you're in a deep
00:10:48
recession frankly I think when I first
00:10:50
started coming in here kind of you know
00:10:52
ta end of the Great
00:10:54
Recession you um you know you didn't
00:10:57
have to worry too much about attrition
00:10:58
because it was going to be really hard
00:10:59
for your people to get another job we're
00:11:01
nowhere near that and so if you're upset
00:11:03
your employees they're going to leave
00:11:06
and the problem is the people who are
00:11:08
most at risk of leaving are the ones who
00:11:09
are going to find it easiest to find
00:11:11
another job and
00:11:13
so I don't think we're in a situation
00:11:16
where most employers can kind of say
00:11:18
attrition be damned kind of we'll we'll
00:11:20
just go ahead and do it and
00:11:23
so you want to be you want to be the
00:11:26
most attractive employer you want people
00:11:27
to be excited to come to work for you
00:11:30
and you want them to be excited to
00:11:32
remain working for you and given for
00:11:34
most people the
00:11:35
flexibility of remote work the ability
00:11:38
to do it as at some point is something
00:11:40
that's important to them it's still um
00:11:43
you are handicapping yourself in
00:11:46
competing for talent these days if you
00:11:48
have a kind of 5day in the office policy
00:11:51
how do you think the mindset of either
00:11:54
the manager or the seite has had to
00:11:57
change because of some of these Dynamics
00:11:59
I it's really tricky you know I spend a
00:12:02
bunch of time talking to chro and on
00:12:04
this topic um it's funny kind of the
00:12:06
first thing that everybody says when
00:12:07
they explain their policies well my CEO
00:12:09
believes that right right um and part of
00:12:11
the challenge is there's not yet a lot
00:12:13
of great data on this topic a huge
00:12:15
amount is being driven by CEO beliefs um
00:12:19
and they miss the buzz of a full office
00:12:21
right sure there's an excitement there
00:12:24
and again I'm not saying that um remote
00:12:28
workers is Costless right but it's about
00:12:31
balancing the costs and benefits and I
00:12:33
think they have been I mean it varies
00:12:36
hugely from organization to organization
00:12:37
there are some CEOs that have really got
00:12:40
on board with this and kind of said this
00:12:42
is what we need to do for our talent
00:12:44
it's a new way of working we can make it
00:12:45
work I think there are a bunch of other
00:12:47
CEOs that kind of still vaguely believe
00:12:49
if I can't see them working I'm not sure
00:12:52
they actually are and it's a big mindset
00:12:54
shift a lot of discussion around the
00:12:56
issues of mental health and stress espe
00:12:58
especially in the workplace how do you
00:13:00
think companies have adjusted to that
00:13:02
and and where that potentially is going
00:13:04
it's a great question it's something
00:13:06
that I think we didn't really talk about
00:13:09
in a corporate context four or five
00:13:11
years ago um I think Co really brought
00:13:14
it to the four and so yeah is wherever
00:13:17
you get two or three HR professionals
00:13:18
gathered together these days they'll
00:13:20
start talking about mental health it's
00:13:23
it's a huge priority
00:13:26
um I think companies are starting to
00:13:28
take it very
00:13:30
seriously sadly I think the issues are
00:13:33
more serious particular when you look at
00:13:34
kind of the incoming Generations there
00:13:36
are these terrifying statistics about
00:13:39
how mental health among kind of young
00:13:41
people has declined over the last 10
00:13:44
years or so and obviously they're
00:13:44
starting to sharpen the workplace um I'm
00:13:48
not sure anybody quite knows what to do
00:13:50
about it I mean again it falls into this
00:13:53
conversation it's kind of another
00:13:54
dimension of inclusion um another thing
00:13:57
you want to be thinking about about how
00:13:58
do we manage stress how do we manage
00:14:00
burnout so it is clearly a part of the
00:14:04
conversation now I'm not sure yet to
00:14:07
what extent it's really starting to
00:14:09
inform how people manage so as we turn
00:14:11
the calendar to 2024 what are you
00:14:13
watching what are you most interested to
00:14:16
keep an eye on in and around careers
00:14:18
labor workforce I mean I think these are
00:14:21
these Remain the big trends um are we
00:14:25
going to see big impacts of AI um again
00:14:29
the evangelists think it's just around
00:14:31
the
00:14:32
corner I'm thinking it's in the years
00:14:36
until it really starts to um starts to
00:14:40
show up in the labor figures but I've
00:14:42
been proved wrong many times in the past
00:14:44
so I look forward to being proved wrong
00:14:46
here um I think that's the one everybody
00:14:48
wants to talk about
00:14:50
um we've seen a cooling off in the labor
00:14:53
market
00:14:55
um what's going on in the economy um is
00:14:59
is we've been again serially wrong right
00:15:02
I mean this time last year everyone was
00:15:04
clear we were going to have a recession
00:15:05
in
00:15:06
2023 and we never did now everybody's
00:15:09
convinced that it's a soft Landing we
00:15:10
should probably start worrying well it's
00:15:12
just cuz I'm a died in the W pessimist
00:15:14
which grow happens if you grow up
00:15:15
supporting England
00:15:17
um I if you ask me is
00:15:21
the labor market going to be tighter or
00:15:25
looser this time next
00:15:27
year I would probably bet looser but I
00:15:29
think it's just my my pessimism I think
00:15:32
there there downside risks I think
00:15:34
particularly concerning the interest
00:15:36
rates will bite over time um but that
00:15:40
that'll have a big effect I mean on the
00:15:42
other hand I guess you will see um you
00:15:46
know the infrastructure Bill the
00:15:47
inflation reduction act all of those
00:15:50
really starting to kick in yeah as money
00:15:52
goes out the door um like I say I think
00:15:55
the most encouraging thing about the
00:15:57
last three years has been that the big
00:16:01
growth has been at the kind of lower end
00:16:03
of the wage distribution um and I
00:16:07
think we should continue to see growth
00:16:09
particularly in manufacturing and other
00:16:11
Blue Collar roles so I think that is
00:16:14
that is definitely a positive thing that
00:16:15
I hope we'll continue to see over the
00:16:16
next over the next year or so Matthew
00:16:19
always great to chat with you thanks
00:16:20
very much and you thank you Matthew
00:16:22
Bidwell professor of management here at
00:16:24
the Wharton
00:16:27
School
