(Thomas Barwick/Getty Images)
A new report from the Conference Board and The Business Council found that 98% of CEOs surveyed are preparing for a U.S. recession within the next 12-18 months. But it may not necessarily mean mass redundancies and unemployment in the way we’ve seen it in previous recessions.
The concept of “labor hoarding” – avoiding layoffs as much as possible in a downturn or recession – appears to be taking root as a viable strategy for many employers. It’s being driven by several factors.
The first is the experience of companies in the post-COVID economic reopening, when businesses that had let a lot of people go during the lockdown had real problems rebuilding their workforces. So much so that many companies, particularly those in consumer-facing sectors, are still chronically short-staffed. As TKer’s Sam Ro told us, it may “be cheaper in the long run to hang on to extra labor now than to lay off workers now and recruit them again when growth returns”.
But there may be another reason why employers won’t necessarily fire workers en masse if they can avoid it. My colleague Alison Omens wrote in her most recent piece that widespread labor hoarding would imply a growing embrace of a strategy that “1. Acknowledges that human capital can be a source of value creation, and that replacing that capital costs a lot, in productivity, recruitment costs, and institutional knowledge, and 2. Reflects a growing awareness that workers are more than capital, that investing in people can lead to strong, positive culture changes, and that underinvesting in them (or ignoring them altogether) can leave companies vulnerable to consumer and worker pressure.”
Our investment in the JUST Jobs program, which includes a partnership with Revelio Labs as well as forthcoming company scorecards on the key elements of job quality, is a direct response to this point of view. Here’s hoping the recession, if and when it does come, advances this approach rather than undermines it.
This Week in Stakeholder Capitalism
Amazon workers in Albany vote against unionization.
Apple retail employees in Oklahoma City vote to unionize, becoming the second of the company’s stores to organize.
Bank of America gives $24 million to nonprofits advancing economic mobility in Black, Hispanic-Latino, Asian American, and Native American communities.
ExxonMobil exits Russia entirely after the country’s government pushed it out of its stake in a Russian oil-and-gas project.
JPMorgan Chase commits $15 million to organizations focused on affordable, climate-resilient housing for Black, Hispanic, and Latino communities.
Microsoft announces layoffs across the company, with reported job losses under 1,000 roles.
What’s Happening at JUST
Closing out Hispanic Heritage Month, CNBC’s Brandon Gomez explores the workplace and economic issues that matter most to Hispanic Americans, featuring JUST polling, finding an emphasis on benefits that build long-term financial security.
If you missed BSR’s “The Future of Sustainable Business Is…,” event this week where Martin joined Andrew Edgecliffe-Johnson from the Financial Times and experts from U.N. Global Compact, Pathstone Partners, and the Columbia Climate School to debate how sustainable business needs to evolve to deliver on its promise, you can watch the full recording on Twitter here (session starts at 48:00).
Martin joins CNBC’s Work Summit next Wednesday, October 26, in the morning session also featuring U.S. Secretary of Labor Martin J. Walsh, AFL-CIO President Liz Shuler, and PwC U.S. Chair Tim Ryan to discuss “The World of Work Right Now.” Register here to join the virtual event.
On November 2, Martin will join Reuters for its ESG Investment North America 2022 conference to discuss how best to quantify “S” issues like workforce diversity and financial security, and how to integrate these elements into investing strategy. Register here to attend this conversation and hear from senior leaders across the investment community.
“The pressures and demands of a CEO in today’s day and time are very different, even from three years ago… Things have changed. There’s huge global emergencies. We feel them, we see them no matter where you sit in the world. And I think what the incredible opportunity is, though, is actually the recognition that business does have a role to play. I think the question is: How much can business do?”
- Sanda Ojiambo, Assistant Secretary-General and CEO of the UN Global Compact,speaking at BSR’s “The Future of Sustainable Business Is…” event on both the challenges and opportunities today’s corporate leaders face.
“The whole measurement thing is a little immature… The field is going to get mature on that. But having that environmental incentive – a lot of investors really do want to get that information.”
- Microsoft Founder Bill Gates in an interview with CNBC addressing the lack of standardization and regulation around how companies measure and disclose their environmental impact.
“And yet, as these women leaders walk out the door, these young women are watching their role models vote with their feet. Companies that don’t take action risk recruiting and retaining the next generation of women leaders needed to drive their companies forward.”
- Alexis Krivkovich, Senior Partner at McKinsey, speaking to MSNBC on how companies should act on the findings from this year’s “Women in the Workplace” report.
Must-Reads of the Week
The Wall Street Journal digs into the recently released American Opportunity Index, highlighting the key metrics incorporated in the ranking and the companies leading on them, including AT&T, CVS, and Dollar General. Fortune’s CHRO Daily also reports on the three key elements of a good job, as defined by the Families and Workers Fund and Aspen Institute’s Good Jobs Champions Group.
Lean In and McKinsey publish their annual “Women in the Workplace” report, noting a key trend they’re calling “The Great Breakup,” with women corporate leaders leaving companies at record rates and outpacing men’s attrition. Lean In founder Sheryl Sandberg spoke to Fortune’s Broadsheet about this and other findings from the 2022 report.
Bloomberg reports that several large banks – including Bank of America, JPMorgan Chase, and Morgan Stanley – are looking to leave the Glasgow Financial Alliance for Net Zero over concerns they won’t be able to fulfill its commitments. The Financial Times also covers a new study finding “green hushing” is growing, with companies choosing not to publicize climate targets to avoid scrutiny.
Axios explores whether or not employers are “labor hoarding” at the moment, with layoffs and unemployment remaining low despite fears of recession.
A new Conference Board survey finds that nearly a third of employees are disengaged at work, whether working remotely on on-site. Amid “quiet quitting,” 82% of those surveyed also say they’re putting in similar or above-average effort.
CBS reports on a new Glassdoor ranking of the best companies for work-life balance.
Chart of the Week
This week’s chart comes from our 2022 Living Wage Explainer. We teamed up with MIT’s Dr. Amy Glasmeier to break down what a living wage is – including what expenses it incorporates – and the factors that affect how it’s calculated. Learn more in the full guide.
Get to Know JUST
Former President and CEO, Sprint
JUST Board Member
Dan Hesse served as President and CEO of Sprint from December 2007 to August 2014, following a 30-year telecommunications career that included serving as CEO of Embarq, Terabeam, and AT&T. He also sits on the boards of Akamai Technologies, where he is Chairman, and PNC, where he chairs the Technology Committee. Dan has been named the “Most Influential Person in Mobile Technology” by LAPTOP (Steve Jobs was #2), “Executive of the Year” by Wireless Business and Technology, and one of “10 Inspirational Leaders Who Turned Around Their Companies” by Entrepreneur.
JUST is honored to have Dan serving on our Board of Directors and excited to announce that he was inducted into the Wireless History Foundation’s “Wireless Hall of Fame” this week. Dan recently joined Syndio’s The Shift podcast to talk about how he’s operated with a stakeholder mindset during his career. “There’s this virtuous cycle between people and customers,” he said. “Happy employees, those that like the company they’re working for, do a better job of serving customers. And what I saw move in lockstep was employee satisfaction and customer satisfaction.”