Contributor, Korn Ferry Institute
This Week in Leadership (Nov 29 - Dec 5)
Questions—and answers—about the Omicron variant's impact on organizations. Plus, critical year-end moves to boost your career.
See the latest issue of Briefings at newsstands or read in our new format here.
Have a heart for middle managers like John Browne. He’s a finance manager at a major corporation, and when he first took his job, he could work a regular eight-hour day. He initially oversaw the audit department, which mostly meant providing light supervision to a team of expert finance whizzes. But as time passed, he took—or rather, was handed—more tasks as bit by bit the company downsized his team. That included him doing some of the work his team previously did. No one ever officially asked him to put in 12-hour days and work on weekends, but that’s what happened.
Despite the good news we have started to hear (at least by the start of summer) about an economic rebound, there are a lot of men and women like Browne in the workplace now, putting in longer and longer hours as their colleagues get axed and unemployment soars. These men and women get trapped by what we might call the “alligator jaws” of middle management. Those jaws represent the good and bad sides of the economy we are living through. Let me explain.
The good side is that, broadly, the United States economy is set to grow quickly in the second half of the year, with most analysts forecasting growth of 9 percent and 6.9 percent on average for the third and fourth quarters, respectively. Some economists see even faster growth through the period. “My view is that the initial bounce could be relatively sharp and almost look like a V-shaped recovery,” says Steve Hanke, professor of applied economics at Johns Hopkins University. That growth in the second half will look like the top jaw of an open-mouthed alligator, sloping upward.
The economic growth will come in large part because many corporations are in good financial shape and will profit from the easing of government-imposed lockdowns. “The resilience shows up on the financial and business side,” says David Ranson, director of research at the financial analytics firm HCWE & Co.
The problem for the John Brownes of the world is that despite that uptick, most corporations will be too scarred from the pandemic’s brutal revenue wipeout path to start rehiring on a major scale quickly. The job growth we will see will likely be soft, resembling the lower jaw of the open-mouthed alligator—flat. “Typically, we see the economy expands first, then the employment comes later,” says Robert Wright, a senior fellow at the American Institute for Economic Research.
So how do we square the circle that the economy will grow fast but jobs will be slow to come back? Key to any growth in the economy is a rise in productivity or output per worker. And we are almost certainly seeing productivity increase right now, since workers are doing more to make up for all those millions let go. “Who gets laid off first, your best or your worst employees?” asks Wright. Cutting the least productive workers increases average worker productivity inside corporations, raising profitability.
Then there’s the effect of the John Brownes. Middle managers are usually paid a fixed salary regardless of how many hours they work. But now they’ll all likely be lengthening their workweek, because, as Wright puts it, “you’ll want to keep that job, so you will put in the long hours.” During the job recession of the early 2000s, I saw colleagues around me get cut while the entire workload didn’t shrink one bit. Instead, those of us left all worked harder.
Indeed, during the last two recessions in 2001 and 2007 to 2009, unemployment continued rising for considerable periods. Incredibly, for instance, it wasn’t until 2010 that the jobless rate started to fall steadily in the US.
The issue, of course, is that corporate chiefs will be loath to add any workers if the current employees are still productive. And who knows how loath they will be postpandemic. Is there an end to this? Yes—when managers, pushed to the limit, finally burn out and rehiring begins in earnest. Sorry, John Browne: “Businesses don’t want to add that extra person unless they absolutely have to,” Wright says.