Beyond price pressures on cash flow, raw material costs, financing and every other part of your business, inflation is adding another worry for leadership – the fear that your top-performing workers will switch jobs simply to beat inflation.
But those pressures, combined with the hurt feelings of executives who cannot fathom why employees do not want to rush back to the office for milk and cookies, portend opportunity for small- and midsized enterprises.
Let me explain.
According to a recent analysis by the Federal Reserve Bank of Atlanta, 49% of the workers who changed jobs in 2022 were rewarded with a pay raise that exceeded inflation, meaning that their real hourly wage was going up. As Alexandre Tanzi of Blomberg News reported, only 42% of people who remained in their job managed to stay ahead of inflation.
As U.S. inflation keeps clipping along at around 6%, that gives your workforce another incentive to leave you. Yes, workers have always switched jobs for better pay, better benefits and a better fit with their lifestyle. But leaders did not need another disruption in a world characterized by the “Great Resignation,” “Quiet Quitting” and occupational burnout.
Now take the continuing push by the management class to force people to commute back to the office. Titans like Elon Musk and BlackRock CEO Larry Fink keep sounding worries about productivity, corporate culture, blah blah blah. That feeds articles like this from The Wall Street Journal, quoting “experts” about how managers “sense,” “feel” and “believe” that in-officer workers are more productive and connected.
Note the lack of data to back up such assertions. Just management surveys – no voice of the employee at all. In fact, data show that returning to the office could be plummeting productivity.
Take the latest Future Forum Pulse, which regularly surveys thousands of workers across the U.S., Australia, France, Germany, Japan and the U.K. This research found that flexible workers are equally or more likely than in-office workers to feel connected to their teams, their direct manager and their company values. Workers dissatisfied with their flexible options are 43% more likely to suffer from burnout. And Owl Labs found that some workers will take less pay for remote work options.
Even more, respondents maintain that flexible work policies have been the No. 1 factor in improving company culture over the last few years.
So, remote work offers better-connected teams, higher productivity, satisfied workers and less burnout. Meanwhile, big business offers an order to return to the office – adding gas-guzzling, expensive commutes to the inflationary pressures their workers are suffering.
Mandating in-office work is a colossal mistake – and a perfect opportunity for small- and midsized enterprises to poach great talent from bigger fish at an attractive price.
Jim Tompkins, Chairman of Tompkins Ventures, is an international authority on designing and implementing end-to-end supply chains. Over five decades, he has designed countless industrial facilities and supply chain solutions, enhancing the growth of numerous companies. He previously built Tompkins International from a backyard startup into an international consulting and implementation firm. Jim earned his B.S., M.S. and Ph.D. in Industrial Engineering from Purdue University.
