Newsletters: The employer–employee relationship is changing. Which workers have more power?

The employer–employee relationship is changing. Which workers have more power?

In the news

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Rethinking the 9-to-5. A majority of independent workers in the US—70%—now believe independent work to be more secure than a traditional, full-time job, according to a 2021 survey. The COVID-19 crisis has led workers to rethink their work lives. At the same time, expanded unemployment assistance, a wave of early retirements, and a shortage of childcare options have limited the pool of available workers. Since workers have more power to hold out for the jobs they want, employers should consider offering employees greater autonomy and flexibility. [HBR]

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Fatter paychecks. The US labor market is continuing to heat up, with wages increasing briskly in January through March as employers offer bigger paychecks to lure a limited number of workers. Wages climbed by 5.6% from the prior year, leaping over the 2 to 3% annual gains of the 2010s. Meanwhile, the unemployment rate slipped to 3.6% in March from 3.8% the previous month. The most dramatic pay increases have been in leisure and hospitality, where workers in nonmanagerial roles have seen wages shoot up nearly 15% over the past year. [NYT]

“The worst thing employers can do is come out with a mandate, whether it’s the five-day return to how it was or the dressed-up four-day mandate.”

On McKinsey.com

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The power to walk. In this tight labor market, workers are flexing the power to walk away from jobs they don’t want—and most of them haven’t come back, say talent experts Bryan Hancock and Bill Schaninger in an episode of McKinsey Talks Talent. Of the folks who have quit their jobs, only a third are returning to full-time employment, McKinsey research shows. “Maybe that’s the real power. They aren’t going back. And the employers have to decide whether or not they like the new terms,” says Schaninger.

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Pockets of power. “We are seeing some increased worker power in some pockets,” says Hancock. How much power depends upon the type of employment. Knowledge workers who work remotely can access a nationwide labor market, but folks who serve customers or handle equipment often face very local labor markets. In addition, some gig economy workers are finding that although work platforms are evolving, they haven’t met all of their needs. Listen to the full podcast for more on the changing employer–employee relationship.

— Edited by Belinda Yu

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The employer–employee relationship is changing. Which workers have more power?

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