- Hacking Work International
- Posts
- #3: The cost of a sick brain: we lose up to 60 working days/ year; „New collar” workers - who are they and why do we need them?
#3: The cost of a sick brain: we lose up to 60 working days/ year; „New collar” workers - who are they and why do we need them?
2024, the year of layoffs: over 25,000 people, jobless in a single month; The work-BFF becomes the office hero; Germany embraces the four-day workweek.
Hacking Work International
February 01, 2024
Welcome to the third edition of Hacking Work International Newsletter!
What to expect, every Thursday:
Updates on the worldwide job market; the most recent developments in leadership and organisational culture; valuable insights into professional and educational landscapes; contemporary viewpoints on careers, and the way we work.
In today's email:
New collar workers: the emerging third employee category, following blue and white collar.
New collar workers are a new category in the labour market and their numbers are growing. What distinguishes them from white collar or blue collar workers (white collar - office workers and blue collar - production workers)? The new ones are characterised by highly developed technical skills, despite a lack of formal training in this area.
The largest growth in the number of new workers has been in sectors such as healthcare, engineering and technology. These sectors have a much greater need for specialists than the talent available on the market, especially as 66% of the world's population has not completed higher education. Those in this category, who make up the top half of the pay scale, prove their worth not only through degrees but also through practical exams, and the strong demand for their particular skills drives their remuneration.
The term "new collar" is not necessarily new - it was first used by Ginni Rometty, former CEO of IBM, almost a decade ago - but until now it has not been used to its full potential. By removing the requirement for a university degree, modern companies are recognising the importance of practical skills over academic achievement, paving the way for a more diverse workforce better suited to today's market demands.
Source: DALL·E 3 following a Hacking Work prompt
Today's young adults versus those of the '90s: more money, more debt.
In terms of income, Gen Z outperforms those born in the 1990s. In the United States, the average yearly pay for 18- to 24-year-olds was around $20,000 in 2023, compared to $15,462 in 1993, considering inflation. According to Pew Research, those between the ages of 25 and 29 make over $10,000 more than young people did 30 years ago.
It all seems fine, but in reality, Generation Z faces more challenges: the rising cost of living has a greater impact on young people as they approach certain stages of life. In other words, they cannot afford to live like their parents could at the same age.
In addition, ”money dysmorphia” is becoming more common among today's young adults. According to an Intuit Credit Karma survey in the United States, 69% of them do not think they will become wealthy, and 95% are aware of the harmful impact of this distorted reality on their financial situation. Fueled by social media and celebrity culture, this type of dysmorphia frequently results in poor financial decisions, with even worse long-term consequences.
The proportion of students taking out student loans rose from 28% in 1992 to 43% in 2022 among those aged 25-29. The increase was even greater for those aged 30-34, rising from 18% to 39%. Mortgage debt is also higher for younger homebuyers than for older generations.
Today's young adults are marrying and starting families much later than previous generations. Only 7% of 18-24 year olds were married in 2023, compared with 18% in 1993. The decline was much more pronounced for those aged 25-29, with 29% married in 2023 compared with 50% in 1993. Meanwhile, living with parents has become more common: 57% of 18-24 year olds now live with their parents, compared with 53% in 1993.
Welcome to 2024: Over 25,000 people were laid off worldwide in a single month.
German software company SAP has unveiled a €2 billion restructuring plan for 2024 that will affect 8,000 jobs (more than 7% of its total workforce) as it seeks to boost its artificial intelligence business. The money will be spent on either retraining employees with AI skills, or replacing them through voluntary redundancy programs. By the end of 2023, the group will have around 107,000 employees in 160 countries.
Microsoft will lay off about 1,900 employees in its IT gaming division (around 9% of the total workforce). Microsoft Gaming CEO Phil Spencer said the layoffs were part of a larger "execution plan" to reduce "areas of overlap", just over three months after Microsoft completed its acquisition of Activision Blizzard.
SAP and Microsoft are not the only companies to announce layoffs recently:
eBay is laying off 1,000 people, or around 9% of its full-time employees. CEO Jamie Iannone mentioned the "challenging macroeconomic environment" as an external pressure, but also stated that there are factors the company can control.
Swedish retailer H&M has announced plans to close 28 of its 133 stores in Spain and lay off up to 588 employees. According to union sources, H&M in Spain has experienced absenteeism and employees complaining about overwork.
Business Insider lays off about 8% of all employees. They will receive a minimum of 13 weeks of pay, medical coverage through May, and career assistance programs.
Salesforce is laying off about 700 employees (about 1% of the total), according to the Wall Street Journal. However, the company still has 1,000 open positions.
The fintech start-up, Brex, has cut 20% of all roles, affecting 282 employees. In the memo sent to employees, the CEO points out that they decided to take a hard look at the company's structure and reduce the number of management layers.
The John Lewis Partnership Retaileris considering cutting up to 11,000 jobs over the next five years. At least 10% of the total head office, supermarket and store staff could be affected.'What we are doing is cost neutral and it is a rebalancing because any savings in redundancy pay will be directly reinvested in partner pay,' said a JLP spokesman.
In the first month of 2024, more than 98 tech companies laid off a total of more than 25,000 employees, and the number is expected to rise. Layoffs.fyi maintains an up-to-date list of these companies and their layoff status. In addition, Visual Capitalist has created an equally thorough info graphic:
📜 QUICK READS
Byte-sized news
Chipotle, the Mexican food chain, is hiring 19,000 people, mainly during 'burrito season' (March-May) when sales are high. To encourage and attract Generation Z employees, the company offers unique perks, such as the opportunity to save for the future while paying off college loans. This means that as employees make loan payments, Chipotle will match them by contributing the same amount to their retirement accounts, up to 4% of their annual salary. The average salary is $17 per hour.
-
Workers in hybrid work settings are considered to be “more productive and innovative,” as per a recent study released by Massey University. The research, conducted by Jarrod Harr and based on feedback from more than 1,000 New Zealand employees suggests that this approach to work has a positive impact on the efficiency, engagement, innovation and productivity of those surveyed. It is also seen as more cost effective. Currently, 41.7% of New Zealand employees use a hybrid working model, an increase from 28.4% in June 2023.
-
Germany is testing the four-day working week. The experiment starts on February 1st and will run for six months.
-
Figma plans to offer its employees more shares after its $20 billion merger with Adobe failed. In the aftermath, Figma is awarding its staff with additional stock worth $10 billion and proposing an optional program for anyone who wants to leave the company by January 31: they will receive three months' salary in cash and retain all vested shares, regardless of seniority.
-
One million machine learning specialists will be needed by 2027. According to the World Economic Forum's 2023 Future of Jobs Report, the field is expected to grow by 40%, the most of any profession. Bootcamps are now providing intensive training in the field, with short, cheap and flexible programs, often complemented by careers advice and mentoring, making them vital to filling the technical skills gap.
-
Employees want AI, employers don’t. According to Oliver Wyman research, 79% of global employees plan to receive training in artificial intelligence. However, only 64% believe they have received sufficient training, and 57% say their training is inadequate. There is a disconnect between the speed at which employees are adopting AI technology for individual tasks and the slow pace at which organisations are integrating it. In addition, employees rank AI at the top of their list of reskilling priorities, while managers rank it fourth in importance behind other soft skills such as analytical thinking, leadership, social influence or etiquette courses, as seen in the previous edition of the newsletter.
-
Neuralink has successfully implanted a wireless device into a patient's brain, Elon Musk announced. The billionaire believes the company's first product, Telepathy, will revolutionise the way people interact with technology by allowing them to operate a phone or computer using only their thoughts. The company also hopes to use the technology to help cure serious neurological conditions.
-
A judge has ordered a manager at Britain's financial regulator to return to work. Elizabeth Wilson, a manager at the Financial Conduct Authority, sued her employer after her request to work from home on a permanent basis was rejected. The judge in the case argued that working remotely was detrimental to her employment and that returning to the workplace would allow for more rapid speech and non-verbal communication.
-
Remote employees “have absolutely no attachment, no passion, no creativity,” the L'Oreal CEO controversially declared at the World Economic Forum in Davos, Switzerland. The company was one of the first to issue guidelines for returning to the office after the 2020 lockdown and it currently requires employees to be in the office at least three days a week.
-
Google employees have been warned that there will be more layoffs later this year, according to The Verge. Google CEO Sundar Pichai wrote in an internal memo, "These role eliminations are not on the scale of last year's cuts and will not hit every team." A Google representative confirmed to Reuters that an email was sent to all employees, but declined to reveal its additional content.
60 working days a year - that's the cost of our mental health.
Young workers, including Generation Z and Millennials, are missing a day of work every week due to mental health problems, according to a UK survey. Young Brits under the age of 30 lose an average of 60 days of productivity per year due to mental health problems, compared to 36.3 days for older generations. This not only affects individuals, but also the UK economy, with an estimated annual cost of £138 billion.
This significant difference is due to a lack of effective mental health provision by employers, particularly among younger and lower income workers. Mental health problems cause 150% loss of productivity, significantly higher than the 54% loss caused by physical problems. In addition, young people are twice as likely to experience despair, burnout and exhaustion as their older colleagues.
Although some employers offer mental health support and 85% of people find them useful, only 25% actually use them.
💡 DID YOU KNOW?
A culture of belonging = the key to authentic leadership
Belonging is the most valued human value, according to a new study of 750,000 people worldwide. According to McKinsey, 51% of people who will leave their jobs in 2022 will do so because they do not feel they belong to the organisations they work for. We all need to be valued for who we are and our unique talents, while striving to belong to a place, a team and a mission we believe in.
However, it is difficult to cultivate a sense of belonging without honesty. According to psychologist Tasha Eurich, the process of self-awareness is challenging but necessary: "Although 95% of us believe we are self-aware, only 10-15% actually are.
This suggests that self-awareness is the first step in creating a culture of belonging. Leaders must create a sense of belonging by embodying authenticity in their actions and ideals. Without this approach, employees may feel disengaged and negative consequences will quickly follow.
The workplace BFF is now the main character.
The presence of a 'best friend' in the office is more important than ever, especially as remote and hybrid working becomes more popular. According to new Gallup data, people who have a close friend at work are more loyal and productive, contributing significantly to business results and profitability. In particular, these employees are likely to be more efficient at their jobs, contribute to a safer and more inclusive work environment for their colleagues, and impress customers and partners.
During the pandemic, the need for emotional and social support from close friends has increased and become critical to maintaining people's mental health. Unfortunately, only two in ten employees in the United States consider themselves to have a close friend at work, due to the challenges of maintaining connections and friendships in physically distant teams.
😠 BUZZKILL IN CHIEF
Fighting for a return to the office
EY using access data to monitor employee office attendance. Faced with challenges in enforcing its return-to-office policy, EY has just begun monitoring staff attendance at its UK offices using anonymised access data from the turnstiles. Other companies, including Goldman Sachs and Citibank, have introduced similar measures to monitor employee attendance, widening the gap between employees' desire for flexibility and employers' requirements for physical collaboration.
And they worked "happily ever after”.
Can we continue to work as we live longer and healthier lives? The possibility of flexible working is causing us to rethink our retirement age and how we perceive ageing.
The Transamerica survey found that Americans are retiring at 62. Although life expectancy and the legal retirement age have increased, many workers plan to retire around age 67. Most Americans believe they will need $1.8 million to retire comfortably.
But the truth is harsher than many workers imagine: we do not get to retire when we want. Half of those who decided to retire early did so because of health problems, and two-fifths did so because of job changes (layoffs or restructuring). According to the report, there is a five-year gap between people's retirement expectations and reality. So while many workers say they intend to work beyond retirement age, few actually do.
🧠 MIND HACK
Transform the image you reflect: a 5-step guide to overcoming negative perceptions.
The positive perceptions others have of you are crucial to your career progression. But what do you do if you think you are performing well, but your colleagues think otherwise? If adjustments are recommended and the feedback is valid, it's important to adapt and learn without self-flagellation or undermining your self-esteem. How to transform others' perceptions of you in a healthy and sustainable manner:
Reflect on the feedback: If your first reaction is to reject, defend or explain your behavior, it's important to think objectively, get past the emotion and take time to reflect. Perceptions don't change with explanations; they require time to adjust your actions and behavior. Even if others have formed a negative perception of you, you can only control your actions and reactions.
Engage in active listening: Once you have thoroughly and constructively considered all the information you have received, communicate your willingness to change to your colleagues. Be curious and ask direct questions such as: "What am I good at? What actions should I continue? Where can I improve my performance? What behaviors should I avoid? Listen carefully without becoming defensive and look for specific examples.
Acknowledge any misunderstandings or incorrect behaviours: Admitting and apologising for misunderstandings or undesirable actions can repair relationships and change perceptions. Your courageous gesture may inspire the other person to apologise, and the mutual acknowledgement of the situation by both parties can change how you are perceived.
Make use of skill development tools: Most companies offer free access to learning resources for personal development. Therefore, explore the resources available within your company to improve your skills. If your company does not provide learning opportunities, consider using accessible platforms like LinkedIn Learning or Coursera.
Seek appropriate support: Talk openly with your HR colleagues, find a mentor or talk directly to your manager. Ask for feedback and help in identifying real-time priorities. Demonstrate to those around you that you are willing to change based on validated feedback and with the support you seek, thereby building the credibility of your efforts.
Young British men are working less and less.
According to the Office for National Statistics (ONS), the average number of hours worked per week has decreased by 1.3 since the turn of the century. The decline appears to be mainly due to men working 3.3 fewer hours per week in 2022 than in 1998. At the same time, women are working more hours per week, up by 1.9 since the 1990s.
This trend away from the traditional 9 to 5 seems to be having a negative impact on the UK economy, but it is consistent with a global pattern of men leaving the labor market, which has been observed in both Europe and the United States.
However, the Federal Reserve Bank of San Francisco takes a more optimistic view of this international trend. The decline in hours worked by young people can be attributed to the fact that more Millennials are attending college than baby boomers, although they are likely to return to work as they age.
💡 DID YOU LIKE HACKING WORK NEWS?
Send the newsletter to a friend
The newsletter is written by the Hacking Work team: Ioana, Izabella, Andreea, Ionuț, Loredana, Cristina, Tibi and Doru.
Follow us on X @hackingwork_net
Thank you for reading & sharing.
Join the conversation