The Market for Remote Workers Is Shrinking
And when it comes to wages, the balance of power is shifting back toward employers.
Here are today’s highlights:
Adam Grant says the “dumbest” time to do an exit interview is when the employee exits.
Are retailers wrong about the impact of bike lanes?
Here’s why one restaurant owner pays “extortion” to fake online reviewers.
Non-compete agreements aren’t the only way to protect IP.
The market for remote workers is shrinking: “Fewer employers now feel the need to lure talent with the promise of working from home. Remote jobs made up 13.2 percent of postings advertised on LinkedIn last month—down from 20.6 percent in March. Other job sites such as Indeed and ZipRecruiter also report declines in remote listings. Demand for these jobs remains high. Remote jobs attracted a majority, or 52.8 percent, of all applications submitted on LinkedIn, slightly higher than a year before. The decline in remote listings marks the latest shift in the power dynamic between employers and employees. Companies are showing they can be choosier in their recruiting after months of scrambling for new talent.”
“Hiring and wage growth have slowed from the red-hot pace of much of 2022. And while many laid-off workers in tech and elsewhere are finding employment again, it is taking, on average, longer to secure a new job than it did last spring.”
“ZipRecruiter chief economist Julia Pollak said the decline in the share of remote job postings reflects, in part, slower hiring in industries where remote work has been most prevalent, such as the tech industry.”
“Sam Henry, founder of Seattle Corporate Search, a Seattle-based recruiting firm, said he is advising candidates looking for remote jobs to be flexible since more companies are requiring employees to come in anywhere between two and four days a week. If a job stipulates in-office work most or all of the time, he recommends negotiating for work-from-home days.” READ MORE
Scott Gutz, CEO of Monster Worldwide, sees employers gaining leverage over wages: “The 2023 Monster Work Watch Report found 92 percent of employers plan to hire in 2023 — the same percentage as 2022 — but below the surface, conditions are evolving. Only 44 percent of employers expect to hire to expand, which is down from 53 percent a year ago. A growing percentage of employers (48 percent in 2023 compared to 39 percent a year ago) plan to hire just to backfill roles. Gutz believes the shifting dynamics will give employers more control over salaries after two years of substantial increases but only to an extent.”
“Monster’s survey found 42 percent of employers believe workers’ salary expectations have become unreasonable, and 2023 could be the year the tide turns.”
“‘Employers probably feel like there’s a bit more balance now,’ he said. ‘They’re going to be a bit more rational in terms of how they’re compensating new hires as we go forward.’”
“Gutz said highly skilled workers will likely still be able to command larger raises, even with an uncertain economy.” READ MORE
Adam Grant says entry and stay interviews are more valuable than exit interviews: “Grant urged more leaders to better time the exit interview and prioritize its more proactive and effective siblings: entry interviews and stay interviews. Both processes play an integral role in retaining valued talent, pinpointing gaps in corporate culture, and reversing quiet quitting, especially when leaders ask the right questions. ‘I’m seeing a lot of CEOs scramble and say, ‘Ok, we’ve got to do exit interviews to figure out from the people who actually left what we can do to keep the people we want to stay. I’m a big fan of exit interviews. Just one little issue: It is the dumbest time to run them,’ said Grant, who believes such discussions should be ongoing from the time employees join the company.”
“‘Why would you wait until people have already committed to walk out the door to say, ‘If only I had a time machine, I would go back to the past to convince you to stay.’ What I would much rather see employers do are entry interviews and stay interviews.’”
“Though similar, entry and stay interviews strike two different tones and offer different value propositions to an employer. Entry interviews, which target new hires, consist of asking the same questions one would typically pose during exit interviews, but at the beginning of the employment relationship. They help employers learn what attracts employees to the company and offer comparative data for exit interviews.”
“Alternatively, stay interviews target more tenured employees at the company. The objective is to learn how employees feel about the organization before it’s too late. Generally, stay interview questions inquire about personal satisfaction or dissatisfaction, career goals, and areas of concern.” READ MORE
Brent Beshore asked for small business resource recommendations. Can anyone suggest a useful newsletter or podcast?
The Justice Department is suing to break up Google’s ad business: “Filed in federal court in Virginia, the case alleges that Google abuses monopoly power in the ad-tech industry, hurting web publishers and advertisers that try to use competing products. Eight states, including California and New York, joined the Justice Department’s lawsuit. The lawsuit asks the court to unwind Google’s ‘anticompetitive acquisitions,’ such as its 2008 purchase of ad-serving company DoubleClick, and calls for the divestiture of its ad exchange.”
“By calling for specific divestitures from Google’s ad-tech business, the Justice Department lawsuit went further in seeking a breakup than some antitrust experts had expected.”
“Google’s business includes a tool publishers can use to offer ad space, a product for advertisers to buy those slots and an exchange that automatically links bidders with webpages as they are being loaded for individual users.”
“In Tuesday’s complaint, the Justice Department quotes some of the same internal communications as the Texas-led lawsuit, including how one Google executive compared the company’s control over ad-tech to the financial sector: ‘The analogy would be if Goldman or Citibank owned the NYSE,’ referring to the New York Stock Exchange.’” READ MORE
Are bike lanes better for business owners than they realize? “Five years ago, the city of Queens, New York, announced that it would be putting bike lanes onto a stretch of Skillman Ave—and removing 116 parking spots. Cyclists loved the plan, but local business owners went ballistic. Taking out those parking spots, as they argued at protests and in letters to the city council, would devastate stores and restaurants along Skillman. ‘Parking here is already a nightmare,’ one fumed at a protest rally. But the bike lanes were a done deal, and soon they were in place. Early this year, Jesse Coburn—an investigative writer with Streetsblog New York—wondered whether those predictions of economic collapse came true. So he asked the city's Department of Finance to give him a few years’ worth of sales figures for that stretch of Skillman Ave. How had the businesses on that street fared?”
“Quite well, it turns out. In the year after the bike lanes arrived, businesses on Skillman saw sales rise by 12 percent, compared to 3 percent for Queens in general. What’s more, that section of road saw new businesses open, while Queens overall had a net loss.”
“The thing is, the actual merchants along Skillman? They didn’t believe it. When Coburn spoke to them and described what he’d found, only a few store owners admitted the lanes had helped. Many still insisted the lanes were killing their part of the city. And emotions ran hot: Someone scattered tacks on the bike lane.”
“The truth is that in fairly dense areas, bikes are more efficient at moving people around. You might lose one car driver’s business—but you gain shoppers who now can arrive more easily on bikes.”
“So why the blind spot here? Perhaps it’s that attention gravitates to horror stories—and some merchants do get shafted when bike lanes come in.” READ MORE
The scourge of fake online reviews continues, frustrating many business owners: “That feeling is familiar to Chris Wiken, the owner of the Packing House, a restaurant in Milwaukee that his parents opened in 1974. For years, he said he has dealt with negative posts from two types of people: customers who wait until they leave the restaurant to complain online and reviewers who never ate at the restaurant at all. When he replies to their posts, he says, he has learned they are typically looking for the same thing: money or gift certificates. ‘It’s basically extortion,’ Mr. Wiken said. In five years, he said he had spent thousands of dollars sending out gift cards worth $150 to $250 to get bad reviews taken down. ‘What’s the alternative? They can go on and keep trashing you,’ he said. ‘They can create new profiles and keep writing fake reviews.’”
“He has four-star ratings on both Yelp and Tripadvisor. But he said he would trade all his positive posts for the end of online review sites.”
“Fake reviews have led to legal consequences. In 2018, the owner of PromoSalento, an Italian company offering to write paid reviews of hospitality businesses, was sentenced to nine months in prison after an Italian court determined that he had used a fake identity to write false reviews on Tripadvisor.”
“Last November, Google filed a lawsuit against dozens of companies and websites, accusing them of carrying out ‘a large-scale scam’ to mislead small businesses by selling them ‘fake or worthless services,’ including ‘the option of essentially flooding a competitor’s business profile’ found on Google search with fake negative reviews or ratings.” READ MORE
The green subsidies in the Inflation Reduction Act are flowing to red states: “The act, which was signed into law in mid-August, offers beefy tax credits and other support for clean-energy projects ranging from wind farms to factories that make batteries, solar components or hydrogen. The incentives have improved the economics of those projects and helped spark a flood of investment announcements from companies including the solar manufacturing unit of South Korean conglomerate Hanwha Group and Norwegian startup Freyr Battery. Those announcements have so far clustered heavily in red states, where makers of components for electric vehicles, batteries, wind and solar equipment have proposed tens of billions of dollars of new investments in locations such as Georgia, Arizona and Texas, according to an analysis by The Wall Street Journal.”
“The Journal monitored large manufacturing investments in batteries, solar and wind components announced after the law was passed. Of nearly 30 such announcements where locations were given, all but three had chosen to set up facilities in Republican-leaning states, as defined by the Cook Political Report ...”
“Red-leaning areas are also hosting the bulk of clean-power generation projects currently poised to benefit from the new law’s subsidies. Republican-held congressional districts harbor 82 percent by capacity of all utility-scale wind or solar farms and battery-storage projects that are currently in late-stage development, according to an analysis by business lobby American Clean Power.”
“Many politicians in those districts have opposed the Biden administration’s renewable-energy and climate push, and none of their Congressional representatives voted for the law. Still, local lawmakers and communities in those districts are welcoming an inflow of green projects, company executives and industry experts say.” READ MORE
Non-competes aren’t the only way to protect intellectual property: “The proposed rule from the FTC, on its face, would not apply to non-disclosure or confidentiality agreements, which prohibit employees from using or disclosing their employer's intellectual property for the benefit of themselves or a third party. In fact, in the materials accompanying the proposed rule, the FTC drew a distinction between non-compete agreements, which it views as improperly restricting the free mobility of labor, and non-disclosure agreements, which generally do not prohibit employees from working in a particular industry or for a particular employer, says Robert Nagle, co-chair of the labor management relations practice at Fox Rothschild.”
“Companies can protect their IP if it qualifies as a trade secret under either a state's UTSA or the Defend Trade Secrets Act. Under these laws, if an employee obtains employment with a direct competitor, they are barred from disclosing, using, or benefiting from your company's confidential and proprietary information.”
“Employees who misappropriate the trade secrets of their employer may be subject to injunctive relief, damages (including punitive damages), and attorneys' fees, says Chris Marquardt, partner at Alston & Bird, an Atlanta-based law firm.”
“When employees leave, companies should have a strict process for what should happen. Carolyn Luedtke, partner at Munger Tolles & Olson, a Los Angeles-based law firm, recommends having someone designated to talk to all departing employees to remind them of their confidentiality obligations and to provide them with a copy of the confidentiality agreement they signed.” READ MORE
THE 21 HATS PODCAST
This week, Shawn Busse, Liz Picarazzi, and Sarah Segal talk about when it’s time to give up on a product. For Liz, the problem product is her package locker, which is designed to defeat porch pirates but hasn’t really taken off—especially considering how widespread the concern is. Could the glitter-bomb guy be the answer to Liz’s marketing challenge? Or is it time for her to back off? Plus: In the age of Zoom and remote workers, what have the owners figured out about running effective meetings? And if you're pricing a range of services in a proposal, do you price your offering a la carte? Do you always charge the same prices? And is there a way to ease a client into a monthly retainer?
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Thanks for reading, everyone. — Loren
On the issue of job interviews and exit interviews: I reserved one hour a week for each of my five department managers to talk about their professional development. Totally confidential. They set the agenda. It was like their weekly self-evaluation. They figured out ways to solve their biggest problems in those sessions. Five hours a week saved hours of crisis management.