Why Gen Zers Don’t Think Twice About Job-Hopping

There are reasons their approach to work tends to be very different from that of Millennials. An actual Gen Zer explains.

Good Morning!

Here are today’s highlights:

• Worker burnout may be worse than it was at the peak of the pandemic.

• Ami Kassar has some advice for coping with higher interest rates.

• Gene Marks makes the business case for banning tips.

• Perhaps there is a limit to what people will spend on their pets.

HUMAN RESOURCES

A Gen Zer offers some guidance on understanding Gen Z: “Only in recent years did I begin to realize how alien and intimidating my generation seemed to the generations before us. We are often viewed as ‘disconnected,’ ‘sensitive,’ and ‘self-entitled.’ It's as if we're a generation to be frowned upon or feared. These common Gen Z stereotypes always crack me up. Sometimes because they sound really absurd, but more often because of how we get framed in the most negative and malicious way possible. Something as benign as ‘wanting more time for our personal lives’ would be interpreted as ‘being lazy and wanting to slack off’, or ‘wanting to leave a toxic workplace’ would be twisted into ‘not being resilient enough and disloyal to the company.’”

• “I no longer plan on subscribing to hustle culture, an outlook that many of my peers also seem to have. Work doesn't, and rightfully shouldn't, require huge sacrifices on my part as an employee.”

• “My workplace is where I'll spend most of my waking hours, which is why I won't think twice about job-hopping if a better offer is presented to me. This doesn't necessarily mean a higher pay, but also work that better aligns with my values, helps me grow as a person, and suits my working style.”

• “Given that companies never hold back when it comes to laying off employees to cut costs, there is no reason for me to pledge allegiance to a business that sees me as disposable.” READ MORE

Worker burnout is worse than at the peak of the pandemic: “The Future Forum survey — conducted quarterly in the U.S., U.K., Japan, Australia, Germany, and France — has found that pandemic-era workers with more freedom to choose where and when they work are usually more satisfied, productive and less likely to quit. In the latest poll, conducted late last year, more than half of those who said they were dissatisfied with their level of flexibility also said they were burned out. Employees with immovable work schedules are more than twice as likely to say they’ll ‘definitely’ look for a new job over the next year.”

• “Economic uncertainty, fear of job cuts and rising pressure to return to in-office work have added to workplace malaise, Future Forum researchers said. Women and younger workers, in particular, reported struggling with burnout.”

• “‘All the benefits of flexibility are about how you give people focused time, rather than sweating how many days of week they are in,’ said Brian Elliott, a Slack executive who oversees the Future Forum research. ‘Flexibility also improves a company’s culture, and every time I tell executives this, it surprises them.’” READ MORE

FINANCE

Yes, says Ami Kassar, interest rates have gone up, but that doesn’t necessarily mean you should abandon your plans: “My client was so excited when he called to tell me one of his top competitors was finally going to retire. He had his eye on this guy, who is in the same niche service business, for a long time, and now my client could make his move. And then I burst his bubble. I didn’t mean to, but he panicked about what I told him. You see, interest rates on most SBA 7(a) loans without real estate have increased from 6 percent to 10.5 percent. This rate hike translates into a decent chunk of change over a year. At 6 percent, where the rate was a year ago, his monthly payments would have been $11,102. With the higher rate, they would be $13,354 – or an extra $27,024 over a year.”

• “Remember, a prime benefit of an SBA loan is that you get 10 years to pay it back. And because SBA loan rates are variable, they could go down during those 10 years.”

• “When borrowing money, you always need to make the business case and weigh the initial risks against the long-term benefits. Could you suck it up and pay the higher interest rates for a while in hopes of a larger reward overall? It’s worth thinking about.” READ MORE

BUSINESS MODELS

Gene Marks makes the business case for banning tips: “One thing that’s always irked the beauty salon industry is tips. Tipping in this industry — like in many industries in the U.S. — is, unfortunately, all too common. To help those in the food service industry, there is a tax incentive called the Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips (or the 45B Tax Credit, after its IRS code section). Beauty salon owners do not have this benefit, and the difference is costly.”

• “Which is why a bipartisan bill — called the Small Business Tax Fairness and Compliance Simplification Act — has been re-introduced in the Senate to extend this complicated tax credit to the beauty services industry.”

• “‘This critical tax code modernization effort will benefit small businesses, such as salons and barbershops, simply by creating a level playing field,’ said Sen. Tim Scott (R-S.C.) in a joint press release with co-sponsor Sen. Ben Cardin (D-Md.).”

• “All of this ‘modernization’ is due to the convoluted and frustrating practice in the U.S. that is tipping. Isn’t there a better solution that would help small business owners? Wait, I know of one: Instead of piling on more legislation to ‘level the playing field’ for small businesses, how about just one bill that makes tipping illegal?”

• “If tipping were legislatively banned here, a small business would have to pay their employees more. Is that a problem? Of course not. Small business owners would simply pass this extra cost on to customers. Will that raise prices? Yes. But isn’t that already happening now?” READ MORE

THE ECONOMY

Perhaps there is a limit to what people will spend on their pets: “With the cost of pet food up 15 percent year-over-year and pets and pet products up 12 percent, according to the January consumer-price index, owners are making changes. Pet toy purchases are down 16 percent year-over-year as of February, according to a Jefferies Group analysis of NielsenIQ data, and sales of pet housing are down 21 percent. People often treat their pets like children. But elevated inflation means many are struggling to afford taking care of themselves and their kids. Pet owners are now getting rid of Buddy’s raw-food diet and Bella’s monthly treat-and-toy subscription box. They are also baking their own treats and driving hours for less-expensive vet care.”

• “Simeon Gutman, a retail analyst at Morgan Stanley whose area of coverage includes major pet brands, attributes stubbornly high pet food prices to shortages in 2021 and 2022. The rate of inflation in pet food is outpacing that of groceries for humans.”

• “Roughly half of the 1,000 pet owners surveyed by consumer-insights platform Zappi for The Wall Street Journal this month actively took steps to reduce pet-care costs in the past year.”

• “A little over a quarter skipped or delayed a pet’s vet visit or routine medication on purpose to save money, and 49 percent opted for at-home grooming instead of paying a professional. One-tenth gave a pet away due to rising costs.”

• “Yelp reports that interest in businesses in the pet boarding, grooming, walking and services spaces fell more than 20 percent between a peak in June 2021 and the same month in 2022, putting engagement in line with pre-pandemic levels from 2019, a company spokesman says.” READ MORE

One of Alan Greenspan’s favorite economic indicators has turned positive: “The theory is that although underwear is considered a necessity, when economic anxiety is pervasive, men will not replace the pairs that are already in their drawer—causing sales to dip and price inflation to ease. Men are thought to be likely to wait for the economy to bounce back before investing in new pairs of underpants. “[Greenspan] once told me that if you think about all the garments in the household, the garment that is most private is male underpants because nobody sees it except people, like, in the locker room, and who cares,” NPR correspondent Robert Krulwich said in 2008. ‘So he would look [at men’s underpants sales],’ Krulwich added. ‘If you look at the sales of male underpants, it’s just been much a flat line, hardly ever changes. But on those few occasions where it dips, that means that men are so pinched that they are deciding not to replace underpants.’”

• “The so-called men’s underwear index gives credence to Greenspan’s theory—men’s underwear sales in North America fell in 2008 and 2009, amid the global financial crisis. According to the latest reading of the U.S. consumer price index, men’s underwear prices rose by 5.5 percent between December and January.”

• “Using Greenspan’s theory, the January data suggests that economic confidence drastically turned around last month. The previous two monthly readings, for November and December, showed negative inter-month growth in the price of men’s underpants.” READ MORE

RETAIL

Can adding apartments save shopping malls? “The Westlake Shopping Center, which opened in the 1950s in Daly City, Calif., is one of the first modern malls in the country. Over the past seven decades, it has survived the rise of online retailers, the shuttering of anchor stores and operating restrictions related to the pandemic. Now comes its latest test: the addition of nearly 400 apartments. The strategy, which is being closely watched by retail experts, is expected to increase foot traffic and generate more revenue from the new residents who may be more inclined to shop in their own neighborhood.”

• “‘They’re able to feed off each other,’ said Conor C. Flynn, chief executive of Kimco Realty, the real estate investment trust that owns the mall. ‘It’s almost like an ecosystem where the customer shops your retail, the retailers will support the apartments and drive a premium for the apartments.”

• “Carla Ocfemia, who owns Paw Patch Pastries, took note of these details when she was considering moving her dog-friendly bakery to Westlake from San Francisco, where it had been for 13 years. Before signing her lease, she spent the day sitting in the shopping center and people-watching. The residential feeling — even before the apartments had been constructed — was a selling point for her.”

• “Since the internet disrupted consumer shopping habits, malls have been trying to make a case for their existence. As old anchor stores have downsized, closed or filed for bankruptcy, malls have made space for grocery-store chains, climbing gyms, Covid-19 vaccine sites and dialysis centers in an effort to increase foot traffic and give shoppers a reason to stay longer.” READ MORE

THE 21 HATS PODCAST

ESOPs Are Great. But Not for Me: Last week, Jay Goltz continued his exploration of employee ownership, flying to Portland to meet up with Shawn Busse and Jim Kalb, a friend of 21 Hats who has already sold a portion of his business to his employees. The three owners planned to attend a conference promoting employee stock ownership, but things went somewhat awry. Jay and Shawn left the conference early, Jim canceled his flight, and as has happened before in his brushes with ESOP professionals, Jay walked away feeling convinced—convinced, that is, that an ESOP probably isn’t right for him. Two days later, we taped this podcast episode, which quickly turned into one of the more raucous conversations you are likely to hear about a somewhat technical business topic—although we did manage to find some clarity in the end. In Jay’s words, we agreed to agree.

Along the way, we confronted quite a few relevant questions, such as, do ESOPs have to be so confusing? Are the professionals who pitch ESOPs trying to make them seem complicated? If Jay wants to sell 30 percent of his business to his employees but continue running it, how much control would he have to give up? Will an ESOP make life easier or harder for Jay’s two sons in the business? Instead of an ESOP, could Jay accomplish most of what he wants to accomplish by setting up a profit-sharing bonus plan through his 401(k)? Hanging over the conversation was a larger, more philosophical issue: What exactly do business owners owe their employees? And whatever those obligations are, do they extend beyond the sale of the business? Do they extend beyond the grave?

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

Thanks for reading, everyone. — Loren