- After a brief transition of power to workers, it feels like bosses are back in charge.
- Between the rise of AI, return-to-office mandates, and layoffs — employee anxiety is high.
- CEOs are less worried about workers quitting, one expert told Insider.
CEOs are back on top.
Between the rise of job-threatening AI, strict return-to-office mandates, and sweeping layoffs, it feels like bosses are clawing back what little remains of employees’ power.
Companies had become concerned about keeping employees happy so they didn’t quit, Peter Cappelli, a professor of management at Wharton Business School, told Insider.
“It’s one of the few times the CEOs have listened to HR people,” he said. “Now one of the reasons they’re starting to push back harder is they believe employees can’t quit and go to other places easily.”
The Great Resignation wasn’t so great
The Great Resignation, also known as the Big Quit, might have made workers feel empowered, but how much they actually gained is up for debate.
The economic trend began in early 2021 in the wake of the pandemic and saw millions of workers quit their jobs. At the time, the trend was hailed by many as a reclamation of worker power, but now some aren’t so sure.
A quarter of 628 job switchers that Joblist surveyed in June said they regret quitting their last role, and 42% said their new jobs have “not lived up to their expectations.”
“This general sense that employees made out like bandits in this period is simply not true,” Cappelli said.
Several economists previously told Insider only certain workers gained any true bargaining power and soaring inflation largely canceled out any wage increases.
“I think we were at a period of tight labor markets and a growing recognition of workers’ desire to have a say in how they work,” said Erin Kelly, a professor at MIT Sloan. However, she warned that the narrative was being driven by a few big companies and it was “a little too early to say how much that has shifted.”
Back to the office, or else
Return-to-office mandates are getting tougher despite employees pushing back.
The charge is largely being led by Big Tech and banks, with varying degrees of severity and pushback.
A software development engineer at Amazon, where employees are being told to relocate to a hub office, switch teams, or be “voluntarily resigned,” told Insider that one outlook on the RTO mandates is that it’s “an explicit attempt to reduce developer pay and workforce power.”
During the pandemic tech boom, tech firms “had all the money in the world and they could hire anyone, and that meant developers all of a sudden for the first time in decades, finally had some actual power in the job market. It was an employee’s market for a brief window,” the Amazon employee said. “A sort of conspiratorial view of RTO is in response to that.”
Some also view RTO mandates as a means of quiet firing.
“My gut feeling is Amazon took such bad press on the last two rounds of layoffs that this is a way to trim the roles without having to come out with a layoff. It’s like, ‘Well, we’ll just get people to quit,'” an Amazon Web Services employee said.
Flexible work options may help to bolster a company’s retention rate and boost hiring, but layoffs, paired with an uncertain economic environment, seems to have emboldened employers to do away with it.
“It’s going to make it harder to retain and recruit,” Stanford economist Nick Bloom told Insider, referring to RTO mandates. “I assume it just says that they’re not actively looking to expand headcount.
“It wouldn’t necessarily mean they’re aggressively laying off people, but clearly, it’s a signal they’re not pushing to expand otherwise they wouldn’t be doing it.”
But CEOs hauling workers back to the office could be risking their own bottom line.
“In whatever job market cycle we are in, the best employees in every organization always have outside options,” Raj Choudhury, a professor at Harvard Business School, said. “It doesn’t matter if we are in a recession or in a growth phase — the risk is you’re not going to lose every employee but some of your best employees. “
“I think that’s the risk these leaders face if they want to force this comeback-everyday model down the throat of everyone,” he added.
Since the launch of OpenAI’s ChatGPT late last year, the generative AI boom has been stoking worker anxiety about mass job losses.
Some bosses have taken to publicly praising the tech’s ability to do the work of multiple employees. The CEO of Octopus Energy, a UK-based household energy supplier, said in May AI was already doing the work of 250 people at the company.
Several employees have come forward with suspicions they have been traded in for the buzzy new tech.
Cappelli said there was little evidence that AI had actually cut jobs and some of the fears had been “wildly overblown.”
The tech is not infallible — it has already caused several PR headaches — but there are some cost-saving and efficiency opportunities that make some level of risk worth it to many employers.
“What has happened now is employers don’t know what the use of generative AI will be,” Cappelli said. “So because of that, it looks like a pause in hiring.”
“If you’re an individual employee looking for a job right now, it looks like a recession to you,” he said.