Senior Client Partner, Global Head of FinTech, Payments, Crypto Practice
No Slacking in August?
Most leaders have long agreed that August is an ideal month for slowing down, recharging, and giving employees more breaks from work. In many executives’ offices, in fact, firms have offered Fridays off this month.
But with inflation running at over 9% and the economy on the brink of a recession, August of 2022 is starting to look a lot different, with leaders pressing staffs to push forward instead of pulling back. In memos leaked to the public, for instance, some key tech leaders told employees that the uncertain economic outlook meant they had to work with “more hunger” and “execute flawlessly in an environment of slower growth.” Companies in healthcare, financial services, and other sectors are girding for tough times ahead by instituting hiring freezes and cutting staff. Deepali Vyas, global head of Korn Ferry’s FinTech, Payments and Crypto practice, says leaders in some fields are bracing for the coming downturn by “trying to squeeze every ounce of productivity out of workers that they can.” The way they see it, says Vyas, “August is just another month.”
One factor behind the change, experts say, is that many leaders feel they have already given a lot of flexibility to workers over the last two years in the form of remote work, hybrid scheduling, and robust wage and bonus growth. It doesn’t hurt that the once-hot labor market has cooled off considerably in recent months, shifting the dynamics between employers and employees. “It’s not a candidate’s market anymore, so leaders feel they are in a position to reclaim the work cultures of before,” Vyas says.
For their part, employees appear to be cognizant of their waning influence. In a recent Korn Ferry survey, an overwhelming 63% of professionals said they'll be taking a shorter vacation in 2022. Also, 58% of workers told Korn Ferry that the prospect of being away from work on vacation stresses them out more than in the past. Moreover, nearly 40% of survey respondents said they’ll check in with work multiple times a day during vacation—almost double the share who said the same in 2021—while only 8% said they wouldn’t contact their offices at all, down from 13% in 2021.
But experts worry that turning up the heat on employees this summer could backfire on employers. As Chad Astmann, senior client partner and co-head of global investment management at Korn Ferry, notes, it has been a paradoxically busy time for companies in tech, financial services, healthcare, and other industries over the last two years. He says unexpectedly high demand in those sectors fueled by the pandemic created “an extremely grueling work environment for many people.”
To be sure, plenty of companies shut down for the entire week of July 4 this year, and many leaders are still sounding positive notes about shutting down and recharging this summer. “Lots of people have been waiting for the last two years to take time off,” says Juan Pablo Gonzalez, a senior client partner and sector leader for professional services at Korn Ferry. “Now is not the best time to tell them to suck it up,” he says, “Most have been sucking it up for a while and want to take a break.” Gonzalez says the paradox of making broad-based statements about people not working hard enough is that it tends to drive away an organization’s highest performers, while making others stay put. “The people you want to stay go, and the people you want to go stay,” he says.
Esther Colwill, president of Korn Ferry's Asia Pacific region and president of the firm's global technology, communications and professional services business, says the dilemma underscores how people and companies are still struggling to find a new balance in the post-pandemic world of work. She notes, for instance, that remote work created a transactional environment where productivity increased because of a decrease in meeting and commuting times and business travel. But now, with more people coming back to the office and business travel on the rise, productivity will naturally be lower by comparison. At the same time, supply chain disruption and the battle for top talent, particularly in tech, has driven up the cost of doing business.
Colwill says leaders are anticipating a slowdown over the next few months and don’t want to lose momentum. The risk, she cautions, is also losing engagement. “It’s not a good time to be putting too much pressure on people,” she says.