by CHRC | Jul 8, 2020 | Competencies, Human Capital, Skilled Labor
So last weekend, I was probably the only person I know who wasn’t ready with popcorn and our newly purchased Disney+ waiting anxiously for Hamilton to premiere. I don’t have every word memorized. Much to the dismay of my husband and daughter, I did at one point put on headphones to watch a Tik Tok during the viewing party (do I at least get points for knowing what Tik Tok is?). But for all of you Hamilton fans out there, I want you to know a few themes and a few lines have finally sunk in!
That’s why when I came across this article yesterday, I thought, how timely. As we struggle as a country with rising COVID-19 numbers, and some are quick to blame other countries, it’s important to be reminded of the hard work immigrants have put in during these trying times. Much like in Hamilton, Peter Tsai, the man who invented the N95 mask, is “Non-Stop” finding ways to use, and RE-use, them to their full potential and continue to work for the safety of others in his adopted land.
As we continue to find new ways to run businesses, care for our employees, and see our families during this pandemic, we can look to Peter as an example of how to take something we’ve already succeeded at—and know that we can always be improving it. When in doubt, remember, “Immigrants, we get the job done.” Read More Here
by CHRC | May 29, 2020 | Economy, Human Capital, Labor Markets, Skilled Labor
For many years, we have been working with clients to explain the difference between labor market differentials and cost of living differentials, two related, but different numbers. Obviously, Mark Zuckerberg has never called us to ask for a tutorial. Put simply, it explains why a cold Midwesterner might give up a 4,000 square foot house to live in a 1,000 square foot home in San Diego—yet pay the same for both dwellings. While a basket of goods might cost more in San Diego, that same former Midwesterner will gladly pay it because they intend on never wearing a parka again, and spending more time outdoors, in the sun, than inside sheltering from the cold.
Labor costs, on the other hand, are all about the supply and demand of certain skills. If too many former Midwesterners with the same set of skills move to San Diego all at the same time, the labor market floods, and the price for their labor goes down. Perhaps the newly warm people don’t care?
Labor markets have been shifting along geographic lines since the US began to emerge from the 2008-2009 financial crisis. CHRC began to see it when clients would call with one-off jobs that were suddenly experiencing turnover, and they couldn’t believe it was due to an increase in wages, but it was. One project, in particular, clearly painted this new picture. We examined roles at various income levels across the entire US expecting all geographies to converge to a national geographic differential of 0% at some point; for all these geographies, north, south, east, west, rural, urban—they never did. The correlations that compensation consultants had typically seen to explain geographic differentials no longer held.
Our observations are well explained by the writings of economist, Enrico Moretti, including his book, The New Geography of Jobs. He uses examples to explain how the concentration of industries and human capital in certain areas leads to innovation (e.g. Detroit at the beginning of the 20th Century or Silicon Valley at the end of the century).
So, what will happen if tech talent is incented away from the Bay Area? Will this de-concentration dilute both talent and innovation? Perhaps it could drive down housing costs and the cost of living (but probably not proportionally). Our advice to Mr. Zuckerberg is that the law of unintended consequences will probably take over; the labor market pricing for talent will hold, people will take their talent to other firms, and move wherever they like. The new recipients of their talent will innovate with it. Mr. Zuckerberg might very well be left with those workers whose skills are not nearly as in demand, who are less likely to innovate, and who are very grumpy about their cost of living. Read More Here
by CHRC | May 20, 2020 | Competencies, Diversity, Equity, Inclusion, Economy, Human Capital, Productivity
As the world begins to reopen and summer approaches, parents are still left juggling work and children. A (welcomed) end may be in sight for remote learning, but most daycares, summer camps, and kids’ programs are closed, leaving children perpetually home for the summer. How can America be open for business when so many parents need to remain home to care for children?
The federal government has tried to help parents during this time, implementing the Families First Coronavirus Response Act (FFCRA), but the measures put in place really only benefit some parents. A recent Time article addresses this same concern. “Businesses with more than 500 employees are excluded from the mandate, and firms with fewer than 50 can ask for an exemption. That’s left more than 59 million Americans… uncovered by those government leave provisions.” Without the option to work from home, some parents are forced to resign in order to care for children.
Like the other structural flaws that Covid-19 has exposed, it’s abundantly clear that there’s a bigger problem with our current childcare system. Elliot Haspel, author of Crawling Behind: America’s Child Care Crisis and How to Fix It, says, “I think that the crisis calls for a complete re-envisioning of the American childcare system.” Hopefully, we will take what we’ve learned during these times to create solutions that work for all families. Until we do, this will limit the labor supply of those 20 to 45, which are typically key earning years. Read More Here
by CHRC | May 13, 2020 | Competencies, Human Capital, Productivity, Work Place
By Lisa Aggarwal
Photo Credit: ©Angelina Zinovieva
Looking for a new job? Many people have gotten one they didn’t ask for. Parents fortunate enough to remain employed have the additional unpaid role of providing full-time childcare, entertainment, and assisted education to their children. Schools are closed. Daycares are shuttered and an estimated 50% will not return to operation in the future. Try working while a two-year-old tugs on your sleeve for 8 hours…it’s great!
Many professionals are tending to their children’s countless needs during waking hours and then working all through the night. If you work outside the home, you may have no choice but to entrust your children’s care to someone else. If you are among the growing number of unemployed workers, finding childcare for when job hunting activities or once re-employed poses another real challenge. Not every household has a reliable caregiver available to remain home. Affordable and available childcare isn’t a hallmark of American culture.
There are some options for working parents, however. A recent Time Magazine article outlining worker rights during the pandemic highlights that in companies who employ 50 or more people, the Families First Coronavirus Response Act (FFCRA) could provide a solution. “The FFCRA was intended to prop up the U.S. economy during the pandemic, and includes some new or expanded worker protections that last through Dec 31, 2020. The FFCRA also extends up to 12 weeks of paid ‘expanded family and medical leave’ at two thirds’ pay to employees unable to work (or telework) because they are caring for a child whose school or place of care is closed because of coronavirus. It’s subject to caps and requires that employees have been at their company for 30 days before taking leave.”
Once areas emerge from the pandemic, will parents even feel comfortable sending their children to school and those daycare facilities that economically survive? New reports are surfacing of COVID-19 symptoms affecting children, and aggregate group settings are undoubtedly of higher risk. Childcare solutions are critical to having a population able to return to work. According to the Pro-Market, the blog of the Stigler Center at U of C’s Booth School, “While there is scope for a large rebound in employment even if schools and daycares remain closed, the economy will remain 17 million workers short of normal employment in this scenario. Furthermore, many of those working when schools are closed will only be able to do so if a spouse or partner or who would typically be working instead remains home.” It’s a tightrope we will all walk in finding a safe, yet economically viable way to proceed, and parents will likely continue to have a two-year-old tugging at their sleeve while we walk it. Read More Here
by CHRC | May 13, 2020 | Competencies, Human Capital, Productivity, Work Place
By Lisa Aggarwal
Photo Credit: ©Angelina Zinovieva
Looking for a new job? Many people have gotten one they didn’t ask for. Parents fortunate enough to remain employed have the additional unpaid role of providing full-time childcare, entertainment, and assisted education to their children. Schools are closed. Daycares are shuttered and an estimated 50% will not return to operation in the future. Try working while a two-year-old tugs on your sleeve for 8 hours…it’s great!
Many professionals are tending to their children’s countless needs during waking hours and then working all through the night. If you work outside the home, you may have no choice but to entrust your children’s care to someone else. If you are among the growing number of unemployed workers, finding childcare for when job hunting activities or once re-employed poses another real challenge. Not every household has a reliable caregiver available to remain home. Affordable and available childcare isn’t a hallmark of American culture.
There are some options for working parents, however. A recent Time Magazine article outlining worker rights during the pandemic highlights that in companies who employ 50 or more people, the Families First Coronavirus Response Act (FFCRA) could provide a solution. “The FFCRA was intended to prop up the U.S. economy during the pandemic, and includes some new or expanded worker protections that last through Dec 31, 2020. The FFCRA also extends up to 12 weeks of paid ‘expanded family and medical leave’ at two thirds’ pay to employees unable to work (or telework) because they are caring for a child whose school or place of care is closed because of coronavirus. It’s subject to caps and requires that employees have been at their company for 30 days before taking leave.”
Once areas emerge from the pandemic, will parents even feel comfortable sending their children to school and those daycare facilities that economically survive? New reports are surfacing of COVID-19 symptoms affecting children, and aggregate group settings are undoubtedly of higher risk. Childcare solutions are critical to having a population able to return to work. According to the Pro-Market, the blog of the Stigler Center at U of C’s Booth School, “While there is scope for a large rebound in employment even if schools and daycares remain closed, the economy will remain 17 million workers short of normal employment in this scenario. Furthermore, many of those working when schools are closed will only be able to do so if a spouse or partner or who would typically be working instead remains home.” It’s a tightrope we will all walk in finding a safe, yet economically viable way to proceed, and parents will likely continue to have a two-year-old tugging at their sleeve while we walk it. Read More Here
by CHRC | May 6, 2020 | Compensation, Economy, Human Capital, Wage Increases
For some time now, the compensation consultants at CHRC have been keeping an eye on the wages of those in the service sector. We watch the monthly JOLTS data aggregated by the Atlanta Fed and often have criticized news headlines that put an overemphasis on Manufacturing and Construction job gains and losses because they under-emphasize the large percentage of the U.S. economy that the service sector comprises.
We think Covid-19 has changed America’s understanding of how reliant the economy and all of us are on this service sector.
Given CHRC’s attention to this area of the labor market, and the recent wage pressure caused by over demand and under supply, this headline immediately caught our eye: Returning to Business Is Going to Take a Pay Raise. This sentence in particular caught our attention: “The coronavirus has laid bare that without workers to produce and consume their products, even the most formidable companies are just empty shells.” The author was not an HR consultant or a labor economist; he is an investment advisor who writes a column for Bloomberg.
We agree. If there was already a shortage of workers for the service sector, when we return to normal, whatever the new normal looks like, and whenever normal kinda sorta returns, we do think that some of these roles will see an increase in wages.
Two weeks later we came across the same sentiments, in a theological magazine. While this author’s vantage point was slightly different, his meaning was exactly the same: “Societal value is more subjective, and even higher-paid workers and executives are now recognizing that a well-functioning society really needs people to provide these services.” This author, like the Bloomberg columnist, referenced The Business Roundtable’s “Statement on the Purpose of a Corporation” that 181 executives signed in August 2019. In the statement, these leaders concede that in addition to shareholders, they also serve stakeholders, which includes employees and customers.
Nobody knows what the new normal will look like, but we all know what the world’s been like without haircuts and without meals out, exchanging banter with our favorite servers. We know that many people that do invisible but essential jobs—from garbage collection, to hospital laundry, to first responders—have died from Covid-19. The hope of this Human Resource consultancy is that if financial and theological magazines are publishing pieces that reach the same conclusion, perhaps business leaders are synthesizing similarly and the new normal will involve some evolved compensation conversations. Read More Here and Here
