Beware the Wednesday Problem

If you're going hybrid, you probably don't want to let employees pick which days they work.

Good morning! We hope you’re all set for a nice break this weekend. The Morning Report will return to your inbox on Tuesday.

Here are today’s highlights:

  • FreightCar America took a $10-million PPP loan and fled to Mexico.

  • For many jobs, a $1,000 signing bonus is now the norm.

  • And are employees happier when salaries are transparent?

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This company took a $10 million PPP loan and fled to Mexico: “Late last summer, after churning along through the pandemic with only a two-week pause, managers at FreightCar America called hundreds of workers into the break area at the company’s factory near Muscle Shoals, Alabama, to tell them that the plant was closing for good. For some employees, the news wasn’t a shock: They’d been hearing rumors that management would move the work elsewhere for years. The timing, however, seemed odd. Only a few months earlier, the publicly traded company had received a $10 million Paycheck Protection Program Loan ...”

  • “Nevertheless, the plant’s managers announced that all production would move to FreightCar’s new facility in Mexico, which meant most of the assembled workers would lose their jobs.”

  • “Jim Meyer, FreightCar America’s CEO, told ProPublica in an email that he had not intended to shutter the plant when he received the PPP money, and that it had allowed the company to keep workers on the job through most of 2020 despite a sharp dropoff in new orders.” READ MORE


For many jobs, signing bonuses have become the norm: “As U.S. employers’ search for hires increases in urgency—especially in the manufacturing, logistics, healthcare and food-service industries—truck drivers, hotel cleaners and warehouse workers are being offered signing bonuses of hundreds and even thousands of dollars. Nearly 20 percent of all jobs posted on job search site ZipRecruiter in June offer a signing bonus, up from 2 percent of jobs advertised on the job search site in March. The states with the highest shares of job listings that include a signing bonus are Iowa, Missouri, Vermont, Wyoming and Arkansas, according to ZipRecruiter labor economist Julia Pollak.”

  • “In June, nursing jobs offered hiring incentives ranging from $100 to $30,000.”

  • “Amazon signing bonuses are up to $3,000 for warehouse workers in certain locations, including Nashville, Tenn., and Greenwood Lake, N.Y., according to job postings.”

  • “‘Businesses are jockeying for workers,’ Mr. Hershbein said. ‘They are basically gambling they can hire workers for a one-time payment. They are going to try that first, and if it’s not enough, then they will have to do persistent wage increases.’” READ MORE

There are some people taking jobs: “Hiring fared better than expected in the U.S. private sector in June as continued reopening and a wave of demand led businesses to add employees. Private payrolls increased by 692,000 last month, ADP said in its monthly employment report. Economists surveyed by Bloomberg held a median estimate of a 600,000 payroll gain. The May count was revised to 886,000 from an initial reading of 978,000. The June climb marks a sixth consecutive month of payroll growth as more Americans return to work.” READ MORE

New laws in New York City will make it harder to fire at-will workers without cause: “The laws, which take effect on July 5, ban at-will employment among the city’s fast-food businesses, meaning that from now on, Chipotle and its peers will have to provide just cause to fire one of their roughly 70,000 workers in the five boroughs. The standard requires employers to show workers have engaged in misconduct or failed to satisfactorily perform their duties. Workers who haven’t done anything egregious will be guaranteed a system of warnings and consistent, proportionate disciplinary actions before they can be let go.”

  • “To prevent retaliatory firings under the guise of broader layoffs, companies will have to privilege seniority while shrinking their payrolls and must offer laid-off workers their jobs back before hiring new people.”

  • “Workers who believe they’ve been unfairly fired will be able to pursue arbitration, complain to the city’s Department of Consumer and Worker Protection, or file a lawsuit in state court, where a judge could award punitive damages.”

  • “Senator Bernie Sanders wants to make just cause the national standard, while progressive groups are pushing President Joe Biden to issue an executive order that would mandate just-cause protections for federal contractors.” READ MORE

Returning to the office with a hybrid approach? Beware the Wednesday problem: “Surveys show that a hybrid workplace, in which employees spend some days in the office and some at home, is the most favored post-pandemic return-to-work plan for American businesses, says Nicholas Bloom, a Stanford professor who's been studying remote work for more than a decade. And most companies plan to let employees decide for themselves which days to work at home, either individually or as teams. That's a terrible idea, Bloom warns.”

  • “You can see how letting people choose could quickly become a logistical nightmare, with offices nearly empty on Fridays and full to near-capacity on Wednesdays”

  • “That imbalance is an obvious problem for companies that reduced office space as a way to offset some of the pandemic's economic effects.” READ MORE

This company makes everyone’s salary public: “Carolyn Kopprasch earns $225,000 a year. Maria Thomas makes $267,890. Then comes Darcy Peters with a salary of $105,143. ... Ms. Kopprasch, Ms. Thomas and Ms. Peters all work at Buffer, a fully remote social media company — ‘Slack is our HQ,’ employees joke — that made the unusual decision, eight years ago, to disclose every employee’s salary online. The goal was to close the firm’s gender pay gap, which hovered around 4 percent in the early years of the initiative.”

  • “It didn’t entirely work, the company discovered. It turns out that the gap between men’s and women’s earnings is a numbers problem; making those numbers public doesn’t make them even.”

  • “When the initiative began, some Buffer employees wondered whether making the salary information public would hurt recruiting, because competitors could offer slightly higher pay to top talent. The opposite turned out to be true.” READ MORE

A research paper suggests that while salary transparency does not eliminate the gender wage gap it does increase job satisfaction and reduce turnover: “Past research has shown that workers who feel unfairly compensated have lower job satisfaction and a higher quit rate. In Austria we find pay transparency leads to a reduction in separation rates in treated firms, which point towards higher job satisfaction. We interpret this as suggestive evidence that workers do not perceive the revealed pay schedules as unfair, which in turn leads to higher job satisfaction and lower quit rates.” READ MORE


Episode 66: The Constant Struggle of Marketing: This week, we take another crack at some questions that don’t have definitive answers: Should business owners outsource their marketing or bring it in house? Either way, how do you know you’re picking the right agency or the right person? Is it possible to get someone great for what smaller businesses can afford to pay? Paul Downs tells us what happened when he hired a firm to audit his website. Dana White tells us why she dumped the agency she’d retained for $50,000. And Jay Goltz sums it up: When it comes to the mechanics of marketing, he says, “We’re all in the dark.” Plus: Dana gives a franchising update and Jay starts his own business group.