Companies Can Quiet-Quit Too

If employees want to work remotely, some businesses are asking, why not get the cheapest remote workers around?

Good Morning!

Here are today’s highlights:            

• What are the most wanted employee benefits of 2023?

• It’s not easy to sell a fixer-upper right now.

• There’s a race to build a better air conditioner.

SELLING THE BUSINESS

Want to buy a Rhode Island bookstore? “For just $250,000 it could all be yours: a popular bookstore, a bar, and all 6,000 books on its shelves. Since it opened in a former mill building in Providence five years ago, the Riffraff has been known for its books, coffee and booze. But after owner Tom Roberge moved to Switzerland, he discovered that running a business from ‘six time zones and an ocean away’ wasn’t working out. Earlier this week, he announced in a note on the store’s website that he was putting the business — and all of the store’s contents — on the market.”

• “‘Not being there, by which I mean physically in the store, is making it increasingly difficult to maintain my connection to the store and the day-to-day goings on there,’ wrote Roberge on the store’s website. ‘It’s no one single aspect of the situation that is making it hard, but rather a number of little things that distance is exacerbating from week to week, month to month.’”

• “The $250,000 sale price includes the transfer of ownership, the store’s 6,000 books, furniture, computer systems, bar equipment, an espresso machine, and more. The lease for the store in the Olneyville neighborhood runs until September 2027.” READ MORE

HUMAN RESOURCES

It turns out companies are capable of quiet-quitting too: “Employers are quiet-quitting on the whole idea of traditional full-time employment. In a survey conducted by the Atlanta Fed last year, businesses said remote work had led them to stock up on part-time employees, temps, independent contractors, and outsourced positions both at home and abroad. If workers are going to be remote, the thinking seems to go, why not get the cheapest remote workers available? Fewer full-time jobs means fewer costly benefits: healthcare, pensions, on-the-job training, a steady paycheck. In the age of WFH, companies are gig-ifying the American office.”

• “‘It's the Uberization of the workforce,’ says Nicholas Bloom, a professor at Stanford University who was one of the economists behind the Atlanta Fed survey. ‘The more remote you are, the more Uberized the job is, and the more you're just being paid for the day or for the week.’”

• “For companies, offering full-time employment has always been expensive and risky. But there was one reason bosses were reluctant to outsource jobs: They couldn't imagine trusting people to get their work done out of sight.”

• “But after the pandemic hit, bosses were astonished to discover that their teams were perfectly capable of doing their jobs from home. They learned to supervise their workers by checking their output, not their hours logged at a desk. That, in turn, made them more comfortable with the idea of hiring far-flung contractors, or part-timers who could put in a few hours a day from home.”

• “Whether all this is a good thing or a bad thing depends on one critical question: Are employees being forced into independent work because they can't find full-time jobs, or are they opting for gig work because they prefer it? Both McKinsey's and Gusto's data indicate it's mostly the latter.” READ MORE

Canada is expanding a program to make daycare cheaper: “The national day care plan was introduced two years ago by Prime Minister Justin Trudeau’s government with a goal of steadily pushing down child care costs so that, by 2026, tens of thousands of child care slots would be available at daily fees of 10 Canadian dollars, roughly 200 dollars a month, or less. By comparison, in large urban areas like Toronto or Vancouver, day care can cost 1,200 Canadian dollars or more per month, or about 60 dollars a day.”

• “Working with the country’s provinces, which are responsible for delivering education and child care services, the federal government plans to spend up to 30 billion Canadian dollars to create a total of 250,000 new low-cost child care spaces, mostly in nonprofit or public day care centers and family-based providers.”

• “So far, about 52,000 reduced-cost child care slots have been created across the country under the program. ‘This is part of our plan to make life more affordable for the middle class and for people working hard to join it,’ Mr. Trudeau said in March while announcing the program’s expansion in Manitoba.”

• “Studies have also shown that low-cost child care is an economic boon because it increases the work force participation of women.” READ MORE

The most wanted benefits of 2023: “Eighty-five percent of employees are unhappy with work, according to a recent poll from management consulting company Gallup. In an effort to get to the bottom of why, online job search platform Lensa analyzed Google search data to research the top demands employees are expecting from their workplaces.”

• “Menopause leave came in first place with a 336 percent increase in annual searches. Currently, 72 percent of companies do not have any kind of menopause policy in place, and only 16 percent of businesses train managers to address menopause at work.”

• “In a 2022 survey by healthcare company Biote, four out of every 10 women experienced menopause symptoms that interfered with their work performance or productivity on a weekly basis, and 17 percent quit a job or considered quitting due to menopause symptoms.”

• “Rounding out the top three most in-demand employee benefits were more comprehensive mental health support and 4-day workweek.” READ MORE

COMMERCIAL REAL ESTATE

Fifth Third Bank has stopped lending on new office real estate: “The office real estate market has slumped since the Covid pandemic prompted employees to work from home and many have continued to do so for some or all of their work week. Nationwide, office leasing volume fell 10.7 percent in the first quarter this year, according to a report from commercial real estate firm JLL. That marks the third consecutive quarter office leasing has declined. And vacancy rates rose 0.49 percentage points to a record 20.1 percent in the first quarter, JLL said. Fifth Third is wise to step away from new office real estate loans, Chris Marinac, director of research at Philadelphia-based Janney Montgomery Scott, told me.”

• “‘There are some secular issues in office and Fifth Third is concerned about where office is going,’ Marinac said. ‘They’re trying to be very careful about not adding more credit problems. We have a very uncertain economy and we have an environment where investors don’t pay for incremental real estate exposure. It doesn’t make any sense to do office loans.”

• “‘Fifth Third is being honest, being early and not sugarcoating where we are.’” READ MORE

REAL ESTATE

No one wants to buy a fixer-upper right now: “Real-estate agents say buyers right now seem in no mood to take on the additional costs and headaches of major renovation projects. There is no national data tracking how much quicker renovated homes sell than unrenovated ones, but there are signs of this change. It is one reason sellers are receiving an average of three offers now, compared with around six a year ago, according to the National Association of Realtors. The drop in demand for unrenovated homes is mostly driven by high mortgage rates, buyers and their agents said. Fixer-uppers are always a risky proposition for buyers, but now they are more costly as the rates for home loans and construction loans have both increased, on top of high property prices.”

• “Anything that sits on the market for more than a month is usually either overpriced or in need of significant repairs or updates, said Taylor Marr, Redfin’s deputy chief economist. Homes stay on the market for a median of 27 days, up from 19 days a year ago, according to Redfin.”

• “‘Most home buyers right now simply don’t have enough money left over to invest in major repairs or remodeling,’ said Marr.” READ MORE

STARTUPS

There’s a race to build a better air conditioner: “Air conditioners make people cooler and the world hotter. A slew of startups are launching new products to break that cycle. Just a week into summer, heat waves are causing a surge in electricity demand across the U.S. South, in part to power ACs. The startups say highly efficient ACs can help ease strain on the electric grid and help it withstand sizzling temperatures. Companies such as Blue Frontier, Transaera and Montana Technologies are raising money from investors including industry giant Carrier Global and Bill Gates’s Breakthrough Energy Ventures to develop more efficient technologies. Many of those efforts focus on the humidity rather than the heat, using new materials like liquid salt to dry out the air.”

• “The startups are rushing to capitalize on a wave of government regulation and incentives such as tax credits and rebates for high-efficiency products that are part of the U.S. Inflation Reduction Act.”

• “The startups hope to upend the industry, much like Tesla forced automakers to rapidly shift to electric vehicles. ‘We’re experiencing a similar moment in the air-conditioning space to what the car industry was facing six to 10 years ago,’ said Daniel Betts, chief executive of Blue Frontier.”

• “Air conditioners both cool the air and reduce humidity. Companies like Blue Frontier think the biggest efficiency gains can be made by changing the way ACs reduce humidity in the air.” READ MORE

NoTraffic has raised $50 million to tackle congestion and road safety: “The Tel Aviv-based startup aims to bring traffic lights into the 21st century. Most traffic intersections run on timers, but the technology exists today for a more sophisticated solution. NoTraffic’s combined hardware-software solution turns intersections into smart intersections that can manage traffic flows based on data collected in real time. The startup’s latest fundraise will help NoTraffic expand its offering to cities beyond traffic intersection management and into a more holistic solution that improves both road safety and traffic flow across cities.”

• “NoTraffic’s solution involves installing smart sensors with V2X (vehicle-to-everything) chips onto existing infrastructure at intersections, conflict points or complex roadways. The data from both the sensors and from connected and autonomous vehicles on the road fuse to form a complete traffic picture that captures the movement of cars, bikes, buses, pedestrians and other road users.”

• “Using edge computing, the system can determine things like which path each car will take and how that will impact the next intersection, and then make decisions about how to stimulate traffic flow. That information is then sent to the cloud to synchronize each intersection so that the grid as a whole can react to real-time road conditions.” READ MORE

Introducing home-cooked meal cups for dogs: “Artie’s meals — a blend of freeze-dried and dehydrated meat, fruits, vegetables and grains — are formulated by a board-certified veterinary nutritionist and portioned in recyclable and shelf-stable cups, which are shipped directly to customers’ doors every month. Artie's countertop appliance scans the meal cups and delivers a pre-programmed combination of steam and hot water to cook them. ‘You pop it in and hit one button. Then, in about three minutes or so, you've got a meal that has been lightly cooked and hydrated,’ [Scott] Eller said. ‘The temperature is brought down to a perfect serving temperature between 95 and 105 degrees, which is the temperature an animal would eat at if it was hunting in the wild.’”

• “Phoenix-based Artie recently landed an undisclosed round of seed funding led by Naples, Florida-based ROC Venture Group and is planning to launch its artisan-inspired pet meal cups by the end of the year, said co-founder Scott Eller.”

• “‘I think we all know that cooking for pets is difficult to sustain over the long term, just from a time commitment,’ Eller said. ‘I think for us, it was the realization that if we could deliver a truly super-healthy, home-cooked meal for pets and do it at the touch of a button, it’s sort of that crossroads of true home cooking and convenience.’” READ MORE

THE 21 HATS PODCAST

Embrace It. Leverage It. Or Die: This week, Liz Picarazzi, Sarah Segal, and Laura Zander wind up talking about artificial intelligence, concluding that the time has come for business owners to take AI seriously. Laura says she’s already experimented with using ChatGPT to create lists, to write product descriptions, and to write a marketing plan for a new product. She even used ChatGPT to prepare a presentation for her staff about how to use ChatGPT. She did this in part to reassure them that they don’t have to fear losing their jobs. “What I told the team is, ‘It's a nail gun,’” says Laura. “‘Sometimes you need to use a hammer, because it needs to be perfect, and it needs to be exact. Sometimes you just need a damn nail gun, and you just want to pop it through. And that becomes the skill. The skill becomes: When do I use the hammer and when do I use the nail gun?’”

• On their way to the conversation about ChatGPT, Liz, Sarah, and Laura consider the various ways business owners can tap expertise, including through advisory boards, through business groups, and with strategic weekly lunches. Plus: Laura explains why she likes to hire people even when she doesn’t have an opening.

• You can subscribe to the 21 Hats Podcast wherever you get podcasts.

Thanks for reading, everyone. — Loren