Employee disengagement is rising and companies are finding it more difficult to hold onto works and keep them motivated. The pandemic completely changed the way we interact, work, and educate. Leading tech companies like Yelp, Dropbox, Twitter, and Slack have shifted to permanent remote work.
And countless more have adopted hybrid models of working from home several days a week and coming the remaining days. Yet despite this increase in flexibility, which many consider to be positive, employee disengagement is rising.
The Great Resignation continues to grow and the Quiet Quitting Movement is becoming the new norm. A growing number of workers no longer feel motivated to put in more than what's required.
Economic Signals Align With Employee Disengagement
People across the country are not just thinking about ways to work less while still getting paid full-time. They are also worried about where our economy and inflation are headed. Unfortunately, Fed Chair Jerome Powell didn't tell us what we wanted to hear at the Jackson Hole, Wyoming boondoggle in August 2022.
Long investors wanted to hear the Fed admit there are signs inflation is rolling over and the Fed will adjust its rate-hike plan accordingly. Instead, a parade of Fed members stuck to their script and said they will do whatever it takes to get inflation back down to 2%.
What's fascinating is the 10-year treasury bond barely moved on August 26, 2022 but the S&P 500 sold off by 3.37%. Therefore, the bond market and the Fed are racing towards a collision by year end. What's also kind of sad is how the Fed's views and actions are more important than a company's fundamentals.
When Extra Effort Doesn't Lead To Great Results
Let's say you're the CEO of a publicly-traded company. Your execution has been flawless this year and your company is expanding margins and taking market share. Unfortunately, your efforts won't mean diddly squat if the Fed wants to crunch the economy. Your company's share price will likely go down.
A lot of employees feel similarly. Putting in flawless work no longer offers any guarantee for a raise, promotion, or even more happiness for that matter. Hence, increased employee disengagement.
Market capitalization (or share price) is to a CEO what net worth is to an individual. It's important to track, but it's also a subjective vanity metric. Instead of paying too much attention to net worth, during times like these, it's much more important to focus on cash flow rather than net worth.
Get your cash flow right and you will live like a king or queen for however long this recession lasts.
Shades Of Occupy Wall Street
I just realized something. The emergence of the Quiet Quitting Movement in 2022 is similar to the emergence of the Occupy Wall Street Movement in February 2011.
Both movements rose from a dissatisfaction with life, pay, performance, and equity. Today, if you've been working 60 hours a week for the past year only to see your company's share price down 20% – 80%, you're demotivated. Employee disengagement is up because people feel there's no point in working as hard going forward.
In 2011, I was disillusioned with work because the correlation between pay and performance broke. Equally demotivating was being blamed for the U.S. mortgage meltdown, even though I worked in international equities and kept paying my own mortgage.
Instead of sulking, I found a way out the next year. Therefore, if you're feeling a little demoralized right now, use the remainder of the year to plan your escape!
Obviously, negotiating a severance should be a core part of your escape plan. But so is sending out feelers to other companies and experimenting with something on the side before your departure.
You want to make sure you're not jumping from a hot skillet into a boiling pot of water.
Consequences Of Employee Disengagement And Quiet Quitting
Although Quiet Quitting sounds like another excuse by the younger generation to not work as hard, it's completely rational. There's nothing wrong with working up to 100% for 100% pay. Just make sure you're happy with the outcome.
As a tired parent who wonders how his kids will compete in this hyper-competitive world, I hope the Quiet Quitting movement takes off!
If so, my kids won't have to come up with a homeopathic cure for malaria to get into college. And if they decide to only work 8.5 hours a day instead of 8 hours a day, they might be viewed as strong performers.
I can hear the collective relief of parents everywhere if the American work culture stops moving the goal post.
Employee Disengagement Is Career Limiting
However, not everyone is comfortable with the Quiet Quitting Movement. The concept certainly clashes with the work hard and hustle, head-down work ethic that many Gen-Xers and Boomers were raised on. Frequent job hopping was uncommon and rather frowned upon in their prime working years.
But times have changed and Millennials are now the largest generation in the labor force. Even still, some Millennials are fighting the trend. Some reasons include a financial need to keep their job at all costs and the desire to get a raise and promotion in an increasingly competitive environment.
At the end of the day, everyone has their own risk tolerance and desires when it comes to their income and career. However, employee disengagement could be a real career-limiting move for those in their 20s and 30s.
Think In Derivatives
Accessing higher education in the United States is for many synonymous with large bank loans and therefore long-term debt.
With that context, President Joe Biden announced relief from that headache for many college graduates and professional graduates.
While everybody is debating whether President Biden's student loan forgiveness program will add to inflation (probably slightly), cause moral hazard (maybe), result in colleges raising tuition (probably), and affect the upcoming election (probably), I decided to take a different tack.
I explored why the announced income threshold to receive student loan forgiveness is the ideal income for most people to earn. From this exploration, I then interpolated the ideal net worth for someone to have before retiring.
Someone didn't just randomly come up with the $125,000 income eligibility threshold per person. Instead, a whole committee of well-paid, highly-educated people debated for over a year. And they ultimately decided a threshold ~$50,000 above the median household income was the right call.
Therefore, the income threshold is not just a number. It's a clear guide for how much you should aim to make in order to live a more comfortable life. Are you burned out and making way more than $125,000? Then you may want to take things down a notch or two until November 5, 2024, the next presidential election.Â
Below is the latest U.S. employee engagement trend and disengagement trend since 2020 from Pew Research.
Working Less Due To Employee Disengagement May Cost You
Employee disengagement is not about lowering the quality of your work. Instead, it's primarily about finding a better work-life balance. The aim is to still meet expectations, but avoid going beyond and suffering from stress, anxiety, or exhaustion.
However, it could be a slippery slope for some. If you become too disengaged and demotivated at work, you're bound to start missing expectations. And that would in turn put your job security and paycheck at great risk.
It's unclear what the long-term effects of employee disengagement and the Quiet Quitting Movement will be. Hopefully, workers' quality of life and overall happiness and health will improve. And hopefully it will lead to lower employee turnover as more workers find much improved work-life balance.
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