Covid has taught us a lot of things. It taught us that people can really freak out over toilet paper. Among many other things, it taught us that we don’t need to be in offices to be effective at a wide range of jobs that were previously thought to be exclusively in-person roles.
The new digital business landscape has enabled more free time, more flexibility, and a stronger feeling of control and agency over our work lives. Now that people have a taste of what’s possible, they don’t want to go back to what was. They don’t want to go back to commutes, to real pants, to giving up most of their waking hours to sit in an uncomfortable office when they could be on their sofa, running a load of laundry, walking the dog, signing for FedEx packages, and waiting for the HVAC technician while still getting their jobs done well.
You’ve read the statistics. People are quitting in record numbers. It’s been called the Big Quit, or in some circles, the Great Resignation.
What’s more, those who are staying are demanding pay increases–on top of widespread minimum-wage hikes. It’s critical to note that generous unemployment packages are perhaps contributing to the Big Quit, but that’s only part of the story. Being forced back into the office isn’t the only reason, either. The shift to a digital business landscape means that people can, theoretically, work for any company, from any location. No longer are they bound by commute times, or even time zones.
A solutions architect in San Francisco can apply for jobs in L.A., New York, Mumbai, Singapore, or anywhere her credentials suffice. She doesn’t even need to pay Bay Area rent if she doesn’t want to. Why not work for a company in Beijing while living on a beach in Mexico?
In addition, people are realizing that they don’t need to be beholden to a single employer and a traditional 9-to-5 role. The gig economy has exploded as everyone from entry-level workers to senior executives embrace fractional, contract, or consulting roles where they can make more money working fewer hours for multiple companies.
This revolution has changed the landscape with these outcomes:
- Higher salaries
- Deeper benefits and retention packages
- Flexible work hours and locations
- Global access to jobs and opportunities
- Expanded paid leave, personal days, and sabbaticals
- Increased minimum wage
- Added programs and policies to balance inequities and opportunities
- Shifted allegiance from company to the individual
- Empowered resignation and reset
The problem comes when we don’t recognize the consequences of the collective decision to create these outcomes. And there are consequences.
The Big Backfire
What’s the issue? As more people leave the workforce and as businesses add more costs, it adds pressure to those who stay, and also to the companies who need to continue to operate. Those who remain find ways to fill the gaps and pick up the slack, while companies are forced to become more efficient.
When companies face extreme labor shortages, increased salary-and-benefit requirements, and a constant flux of their employment base, they can’t just throw wage increases at the problem until they find someone willing to do the job. That money has to come from somewhere. It ultimately gets passed on to consumers, but until that inevitability, companies will have to look for ways to continue to service clients and customers to avoid losing business with major customers who aren’t willing to accept cost increases, or those who require months of notice to enact an increase.
During that time, customers also look to outsource or find alternative suppliers to avoid increases. That means the cost increase could cost the company its business with core customers and could eliminate the business overall, which reduces jobs at all levels.
That inflection point is coming, and the road to it has been paved with exorbitant prices for basic necessities like gas and groceries. Consumers will complain that it’s untenable, and those same consumers will have left their jobs or demanded compensation that directly contributes to the spike in companies’ cost of goods sold.
Technology enabled the digital business landscape that’s led to mass resignations: Remote work, global Zoom and Teams meetings, LinkedIn and career-networking platforms, and same-day delivery to our doors. That same technology will be exactly what decimates the job market.
What happens when companies reach the inflection point where human labor isn’t cost-effective? Businesses innovate. We automate, and we find labor in places on the earth where people want the jobs.
If you’re reading this, you’re probably in a role that you suspect is immune to automation and outsourcing. And yet, this isn’t going to impact only factories and other minimum-wage jobs. In the same way people discovered that a wide variety of roles can be done from home, they’ll discover that a wide variety of roles can be automated or, at the very least, outsourced to places where wage expectations are substantially lower. Technology is quickly evolving to replicate nuanced, skilled job functions, e.g., “smart labor,” including creative roles, management, and, ironically, IT and security. No one is immune.
Even if companies don’t want to go this route, a point will come when the long-term cost of attracting and retaining talent will make it necessary to reduce labor, outsource, and automate.
From the warehouse to the corner office and everywhere in between, people who quit because they wanted something “better” will find that there’s nothing to return to. Innovation, automation, and AI are all coming, regardless of the Big Quit. But the Big Quit is rapidly accelerating this transition.
The obvious solution is for people to stay in their roles if they’re still adding value, and for companies to create an environment that people want to be part of. But that’s easier said than done, and automation is already coming.
As for those of us hoping to have jobs in the future? The counterpoint to automation is to provide what automation cannot, which are the human elements that make us truly indispensable:
Automation is inevitable, but it’s a long way from being human. It cannot supply human-level drive and intuition. Successful companies will continue to find ways to incorporate automation to enhance, not necessarily entirely replace, their workforce.
Those that don’t should get ready for the Big Backfire.