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The Great Resignation: opportunities created by the changing talent landscape
The Great Resignation is a manifestation of broader trends; ones which have been gaining momentum for years. Here are some trends shaping the future of talent, and investment opportunities they create
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Over the last few months, the spectre of The Great Resignation has darkened many companies’ doors.
The media’s analysis on the phenomenon has been uniform - citing COVID-induced burnout, greater desire for remote working, and the realignment of people’s priorities post-pandemic as the key drivers behind an impending mass exodus.
In truth, The Great Resignation is just one manifestation of much broader trends; ones which have been gaining momentum for many years. This article discusses some trends we see shaping the future of work and talent, and shares our view on some investment opportunities this creates.
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What changes are afoot?
Multiple careers; portfolio careers
Where the average tenure of a Baby Boomer (aged 55 - 64) in a given job is ten years, the average tenure of a Millennial (aged 26 - 40) is less than three years. Younger generations are much more likely to have many jobs; many careers; and even portfolio careers.
A portfolio career is one that combines multiple streams of income - such as freelancing, running an eCommerce business, creating content online, and leasing out a guest bedroom as an Airbnb. This kind of career grants autonomy and control, as well as an outlet to explore several different passions and develop a broad range of skills.
Employers are aware they need to play a leadership role in skilling up their employees, and providing professional pathways for their employees to grow as operators. The best companies go way beyond mandated training videos, or tokenistic learning and development allowances, but build learning journeys into the heart of the work.
For example, Twilio encourages every employee to learn how to code - even non technical hires. People without technical skills are given training by volunteers from technical teams. Every employee must develop an app using Twilio’s API, and share it with the wider organisation. Not only does this give non-technical hires a greater appreciation for the Twilio product, it equips them with new marketable skills.
The good, bad, and ugly
Another part of being a safe space for learning and development is being a safe space for trying new things, experimenting, and occasionally failing. For example, Liven has a “f&*# ups log”, where employees are encouraged to share their mistakes, and identify a root cause and possible solution. F&*# ups are celebrated internally, because they are evidence of innovating and testing the boundaries of what the product can do. In all-hands sessions, Liven presents their biggest f&*# ups and insights gained from the experiment.
Personal brands prevail
Think ‘influencing’ is limited to beauty bloggers and Instamoms? Think again! Professionals are using platforms such as Twitter and LinkedIN to build powerful followings connected to what they do for work. Employees building ‘personal brands’ often share knowledge, experiences, and resources beyond their own workplace, allowing learnings to propagate faster between organisations, and giving the best operators an additional platform to establish themselves as industry thought leaders.
Erosion of middle management
Advances in automation stand to have the biggest impact on middle management. While most organisations still need ‘doers’, their ‘minders’ are increasingly able to be replaced with process management software. As an example, Uber’s workforce is bifurcated into highly paid ‘knowledge workers’, and lowly paid drivers, working without much pay or worker protection. In place of middle management, there is an all-knowing app that tells you where to pick up and drop off customers, and even uses game-like mechanisms to encourage drivers to keep driving.
In a 2003 letter to shareholders, Jeff Bezos, then CEO of Amazon, wrote: “Long-term thinking is both a requirement and an outcome of true ownership. Owners are different from tenants. I know of a couple who rented out their house, and the family who moved in nailed their Christmas tree to the hardwood floors instead of using a tree stand. Expedient, I suppose, and admittedly these were particularly bad tenants, but no owner would be so short-sighted”.
Companies are realising that to succeed in the long run, they need to make their employees feel like owners. Not only must they reward employees with stock and equity options, they must be platforms where employees feel like they can do work that’s aligned to their own values. This looks like embracing whole people, and inviting them to shape the company, not just do the job.
Work anywhere, anytime
In 2021, many companies embraced remote working permanently; Hacker News reported that 80% of all new job listings in 2021 offered remote working. The trend towards remote working made it possible for companies to hire globally. Opening the aperture on talent allows companies to hire the best in the world, and access highly educated knowledge workers in developing countries, who represent fantastic value (even when paying significantly above the local market). Off the back of this trend, we’ve seen companies such as Deel, which provides payroll and compliance solutions for remote teams, grow extremely quickly.
Additionally, we’re seeing the nine-to-five evolve into flexible work arrangements that are more suited to modern lives and values. Trusting your employees to understand their responsibilities and complete them in time is the love language of the 21st century employee. In 2020, The Muse, a job search and career advice platform, decided to profile the ‘flexibility’ of a job alongside its salary and location.
Who will win in this opportunity space?
The convergence of these trends will necessitate innovations that facilitate new kinds of employment relationships, support companies to deliver better experiences for their employees, and empower workers to capture the surplus value of their own labour.
We believe the best companies in this space will:
Unearth potential where it is traditionally overlooked
Increasingly, companies’ only moat will become the talent they have and are able to attract. In an increasingly competitive job market, recruitment and retention will become an essential competency, rather than the siloed purview of the HR department. Companies will have to either pay through the nose for top talent, or else learn to spot talent that may be underestimated by the market, because they’ve trodden untraditional paths, or are yet to have the requisite skills. The most successful companies will develop an eye for potential rather than experience, and position themselves to attract the hungry, but yet unproven.
In the last few weeks, the subreddit /antiwork has gained a huge amount of traction. One might expect this group to be filled with lazy, entitled people who want to slack off, but the vast majority of conversations call out managers who demean their employees, and treat them as less than human. One thread that sparked particular outrage was this email that a manager sent employees following the death of a co-worker:
Forums such as Reddit and Glassdoor facilitate the free sharing of information about bad managers and toxic workplace cultures. In a hot job market, operators know they have options, and are no longer happy to put up with being reduced to a cog in a machine.
Facilitate upskilling as and where it’s needed
Educational institutions no longer provide all the learning we need to excel in a job. In fact, the pace of innovation in tech means operators have to master tools, platforms, and techniques as they’re invented. In 2021, TikTok overtook Google as the most visited site; legions of growth marketers who had gotten comfortable making Facebook and Instagram ads suddenly had to learn a new medium (for what it’s worth, the Telstra TikTok is 🔥).
To stay ahead of the curve, companies will need to be able to see around corners, and upskill their employees to ride the wave of evolving business conditions.
Who is currently making waves?
There are already companies starting to make waves. Here are just a few from around the grounds.
Tools to create better places to work
Multitudes is a tool for team leaders who care about culture. The tool provides insights and recommendations to unlock more inclusive, higher-performing teams. Metrics are tracked across flow of work (time to merge, lead time), collaboration (participation, feedback), and wellbeing (out-of-hours work). Multitude generates actionable insights, guiding leaders through the process of fostering a more inclusive and motivated team. In the longer term, Multitudes’ ambition is to make equity the default at work by helping teams see how they live out their values in practice.
Joyous has rebuilt employee feedback for modern enterprises who value trust, action, and autonomy. In being designed around owned (as opposed to anonymous) feedback, Joyous empowers employees to help their leaders turn feedback into action.
Functionly is an organisational design tool that helps executives intentionally design the structure of their companies. Functionly’s platform helps leaders drive visibility, alignment, and effective structuring across their organisation. The tool enables them to understand resourcing and accountabilities by modelling links between people, teams, roles, and responsibilities. Functionly makes the process of dynamically designing and redesigning organisations from the top to bottom simple with a drag-and-drop interface, which displays the impact and implications of those changes in real-time.
Tools to unearth talent
Retrain AI aspires to be a platform that connects people whose jobs may become redundant with new jobs that leverage similar skills. This involves identifying which jobs may disappear and which new ones will be created, identifying the skills and attributes that suit newly created jobs, and helping to pave a pathway from an old job to a new one.
Forage enables companies to develop and offer 5 - 6 hour virtual work experience programs that give students a tangible experience working for a company, and an opportunity to showcase their skills. Applicants who complete a Forage program are 2 - 5x more likely to be successful.
Applied is on a mission to become the essential platform for unbiased hiring. By anonymising applications, leveraging a skills-based methodology, and building transparency & analytics into every step of the process, the Applied platform surfaces vital talent that may otherwise be missed. In addition, Applied reduces time spent hiring by 66% while maintaining a 9/10 candidate experience.
Platforms that deliver continuous learning and upskilling
On Deck positions itself as the place where top talent comes to accelerate their careers, surrounded by a world class community. There are programs for chiefs of staff, customer success managers, and even community builders. These courses refine your knowledge and act as an accelerant on your career growth, while also connecting you with a professional network in the same function.
Entry Level is a reskilling platform that promises to reskill operators into new jobs in 6 weeks. The platform offers an opportunity to learn in a peer-driven environment with mentors from top companies. Some of their current course offerings include growth marketing, product management, and data analysis. Perhaps the best part - Entry Level’s courses are free to those who complete them, strongly incentivising commitment!
10 years from now
In ten years, we see talent moving around at pace. We see more people developing highly specialised skill sets that are particularly valuable to companies or organisations at a particular stage of growth (e.g. the zero the one phase, or the scale phase), and coming in to execute on something they excel at, before moving to the next company that needs their help. We anticipate the best operators building strong personal brands as ‘the best in the world at x’, and using platforms such as Twitter, LinkedIN, and Substack to build their credentials.
We don’t just see these operators freelance at companies, but other kinds of organisations, including decentralised autonomous organisations (DAOs) who have a shared mission, and compensate people based on their contributions. Contributing is permissionless and unsupervised, but great work is generously rewarded.
Traditional credentials such as degrees from prestigious universities will become a lower fidelity signal, with many employees equally willing to recognise peer-to-peer credentials, where top operators recognise one another and vouch for their skills. Founder of On Deck Erik Torenberg has written about this concept at length.
However, although job mobility and compensation will increase for some, we’re also worried about the increasing bifurcation between skilled knowledge workers and unspecialised workers, whose jobs are becoming more precarious through ‘gigification’ and automation. We hope that well-conceived, government-sponsored initiatives might help ensure people continue to have access to meaningful and secure; we’re curiously tracking innovative schemes and public private partnerships such as Forte and the Bloom Institute of Technology (formerly Lambda school).
50 years from now
In fifty years, ‘work’ and its associations may have radically shifted - or recursed. After all, in Ancient Rome, a live well lived meant doing some work (the ‘forum’ where business was conducted was only open for a few hours every day), participating in public debates, going to the theatre, pontificating at the baths, and being est in horto.
Moreover, we’re hopeful that in fifty years, humanity will have coalesced around some big, meaningful projects that enhance human flourishing for all - rather than continuing to toil at siloed companies, each narrowly focused on creating value for their shareholders.