Are constant high attrition and lower margins making some leaders return to the landlord mindset? If you read some of the bellwether companies CEOs’ recent outbursts, you might be tempted to think so.
What do you make of these four contexts?
- In June this year, Tesla boss Elon Musk wrote to his employees that “remote work is no longer acceptable except for particularly exceptional contributors; it will be assumed that workers who fail to show up “have resigned.”
- CNBC reported that Google and Alphabet CEO Sundar Pichai expressed a sentiment telling the employees that productivity was not high enough, considering the number of employees in the company.
- Reuters reported that Zuckerberg expressed at an employee town hall, “And I suppose some of you would just declare that this place isn’t for you if I raise expectations, set more ambitious goals, and just generally crank up the heat a little bit. And I have no problem with such self-selection.”
- “There is a lot of chatter about people moonlighting in the tech industry. This is cheating — plain and simple” tweeted Rishad Premji
The last few quarters have been challenging for many companies, and industries, forcing them to look at things they have possibly ignored over the previous two years.
Hiring scale
Most IT companies hired on a large scale to cater to the digital demand of their customers. For example, over the last year, Google and Meta grew their global headcount by 21 per cent and 23 per cent, respectively. Back home, TCS added one lakh plus net employees, whereas Infosys did a net addition of about 54,000 plus full timers. Back then, the hiring scale was justified by the buoyancy of digital spending by enterprises and their consumers.
Many factors, including Ukraine, have lowered the consumer demand in key markets. The return to the office, increase in travel, dollar appreciation, and attrition have only added costs to the organisations without any gain in their operating efficiency. A sense of over-hiring is trickling as a reality check for most of these enterprises. Amazon even admitted in April that it was overstaffed after ramping up during the pandemic and needed to cut back.
Remote remorse
Employers are also not so sure about their remote working strategy. When the poster boys tear the posters, one tends to worry. Recently, Apple said it wants its employees in the office for at least three days a week from September 5, which the employees are resisting under the umbrella of Apple Together, claiming that they did exceptional work throughout the pandemic.
The question employees need an answer to is why enterprises that celebrated remote working then are resisting it now. Is it just because of margin pressure or something else? Employers believe that if not for remote working, they wouldn’t have had this high attrition, as employees would have been busy working at the office.
Digital presentism
Remote workers are wasting up to 67 minutes a day doing menial and unnecessary tasks just to prove to their supervisors that they are actually virtually engaged with their work, according to a July report from Qatalog and GitLab. In what the authors coined “digital presenteeism,” more and more remote workers are feeling pressured into proving to their superiors that they are visibly online and in doing so, are adding an average of 5.5 redundant work hours a week to their regular schedules. Have you got texts saying, I will be WFH or even leave, but available on emails on the phone?
Another study published by MIT Sloan Management Review found that, remote working leads to a higher number of less critical meetings and bears heavily on worker happiness and productivity. It is no wonder that Goldman Sachs CEO, David Solomon called WFH an aberrant practice that they hoped to eliminate soon.
Defiant millennials
However, the ground realities on the attrition and hiring front tell a different tale. As per PWC’s latest study, about 34 per cent of Indian employees are likely to shift their job in the next 12 months, and 37 per cent of them are millennials and Gen Z. The report revealed that 59 per cent of the employees from India are likely to ask for a promotion within the next year, compared to 30 per cent globally.
Most millennials are clearly asking for remote and hybrid working in that order when presented with new job opportunities. With survival no longer the reason for working, it seems, that today’s youth cannot be tamed with old tools and policies.
From a job perspective, we need to recognise that more jobs are still chasing a few people in the technology space, and it’s almost impossible to hold the aspirations and behaviours of digitally savvy millennials with new controls and threats.
Margins or employees?
The new declarations by some of the IT services companies on holding back variable pay of mid-senior employees amid all-time high attrition need to be debated. With the IT industry’s future growth being assured and their primary raw material being tech talent, are they taking the employee's aspirations and preferences for granted? Would it help to be a great employer and forgo a few digits of margins in the interim by taking shareholders into confidence?
In India, large enterprises have had the luxury of an abundant talent supply so far, thanks to our demographics. This has allowed the IT employers to have one-sided employment contracts and got away with anti-competition, three months notice kind of clauses. Time will tell if the future generation of Gen Zs will be as obligated as their GenX and Millennial predecessors.
The hangover
The last 15 months have been tough on the employers and exposed them to many humbling moments. High attritions, astronomical pay demands, offer dropouts, ghosting, and moonlighting in a faceless WFH world seems to have got them angry and left them with a bad hangover. With the emergence of recession, dipping share prices, and margin drops, the enterprises are desperate to wrest control from employees. It seems like a tricky path ahead for the next two quarters.