Were a space alien to have visited the U.S. in late 2020, it might have gotten a very skewed idea about the employee-employer relationship in the world of corporate America. Companies were sending their white collar workers money to buy desks and chairs for their work-from-home offices, and gift baskets to buoy their spirits; they were encouraging them to take vacation days and pay attention to their mental health. They were launching Diversity, Equity, and Inclusion (DEI) programs in the wake of the death of George Floyd, pledging to hire and promote more women after #MeToo, and jettisoning tough performance reviews for more “empathetic” evaluations.
That, though, was just a pandemic blip. It’s not just the spate of layoffs—including more than 100,000 in the tech industry alone in 2023—that have left professional workers reeling. Even people who still have jobs may notice that their employer is no longer the same empathetic, understanding boss that they bonded with in the first two years of the pandemic. Meta CEO Mark Zuckerberg told Facebook employees that their performances would be graded more intensely than before; Alphabet’s CEO Sundar Pichai reportedly urged employees to work with “greater urgency, sharper focus, and more hunger”; Twitter owner Elon Musk advised employees who didn’t want to work long hours at high intensity to quit.
It’s not just tech. “We are managing out our less productive agents more aggressively,” Mark Jones, the chief financial officer of Goosehead Insurance, a publicly-traded insurance company, said to analysts in October, explaining that the company was now in a “post-pandemic environment.” Goosehead also cut its corporate staff by 18% over the quarter “to focus on increasing productivity.”
Meanwhile, Goldman Sachs nixed its free coffee perk in January 2023, Delta Air Lines told its employees that they can no longer use Delta’s Sky Clubs, even if they’re traveling for company business or have bought Sky Club benefits for themselves, and a growing number of companies are offering new workers contract roles, rather than full-time work. There were 25% more contract listings on LinkedIn in the six months between May of 2022 and November 2022 than in the same period the previous year. Many companies are zeroing in on worker productivity and cost savings as the chances of a recession grow—a September Microsoft report described a “paranoia” in which 85% of managers questioned whether their remote workers were effective. This focus on the bottom line often means leadership tossing out programs started—and employees hired—during the pandemic to ostensibly make their company a kinder and more diverse place.
These changes are a serious setback for the 88 million professional workers in the U.S. who had been gaining leverage over their employers for the first time in decades. Talk of the “Great Resignation” had employers scrambling to keep workers happy, and experts predicted a new era of work, in which people pursued careers they actually liked, companies took a stance on social issues, and the 9–5 workday was a thing of the past. But even employers who had committed to change are backsliding, and the window of opportunity for the pandemic to dramatically change work in America is closing fast. Rather than a more diverse, inclusive, and happy office, the “new” workplace ushered in by the pandemic may be exactly the same one that existed before it. That will also mean a workplace with fewer women and underrepresented minorities, since the pandemic-era changes that made their work lives better are now disappearing.
Goodbye to the kindler, gentler employer
For Olga Kislinska, the pandemic felt like a great equalizer. Though Kislinska, who worked in tech, had a young child, she didn’t feel like she was falling behind her colleagues without children, or those with a stay-at-home-spouse, because everyone at her company was encouraged to stay home, spend time with their families, and balance work and their own mental health. “It felt very egalitarian—like we’re all in this together,” she says. “It almost felt like wartime.”
But in mid-2022, she says, that attitude started changing. “There was a cultural crawl,” she says, back to a pre-pandemic norm, in which her employer was suddenly demanding 60-hour work weeks and had little patience for anyone who wasn’t burning themselves out. The idea of being able to get a good night’s sleep or take planned time off went out the window, she says, and her employer slowly got more cutthroat. The last straw for her, she says, was when she was chastised for missing a meeting after ending up in the emergency room with food poisoning when she was pregnant with her second child. She quit in August and has since found another job at a company that has a much better work-life balance.
Still, she feels like her old company missed an opportunity to be a better place to work. She likens it to the end of World War II, when all the women who had been welcomed into the factory were sent home to be in the kitchen again. “It kind of felt like, ‘ok, now we can go back to something that was easier for the people in charge, and for managers,’” she says.
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These shifts are materializing in many different ways at companies across the country. Just 54% of U.S. employees polled in 2022 said that they felt they had workday flexibility to care for their mental health needs, down from 64% in 2021, according to a survey conducted by Forrester Consulting and commissioned by Modern Health. C-level executives and human resource leaders polled in the same survey said that they had concerns that the mental health benefits could cause employees to take more time off, hurting the companies’ bottom line.
During the pandemic, Slack, for instance, launched “Fri-yays” in which the whole company shut down one Friday a month to give everyone a chance to relax and recharge. Slack, which was formally acquired by Salesforce in July 2021, stopped its Fri-yays in December of 2022. (Salesforce’s CEO is Marc Benioff, who owns TIME alongside his wife, Lynne.) Slack said, in a statement, that the company has learned “a lot in the last two years about how to work in a more flexible world” and that the company has created new benefits and tools to support its employees—including encouraging them to take time off and recharge (although apparently not all at once.).
Indeed, many companies are framing recent changes as efforts to give their employees more flexibility. In January 2023, Microsoft’s chief people officer Kathleen Hogan told employees that the company was “modernizing” its vacation policy and switching to “discretionary time off,” in which employees get “unlimited” vacation days. Similarly, Goldman Sachs switched to unlimited vacation time in May of 2022.
That sounds good on paper. But “unlimited” vacation time “is a trick benefit,” says Veehtahl Eilat-Raichel, the chief executive and co-founder of Sorbet, a firm that partners with companies and employees to convert unused vacation time into cash balance on prepaid cards, reducing a company’s liabilities.
An “unlimited” policy absolves the employer of the responsibility of paying employees for unused paid time off (PTO) should they quit or be fired—perhaps coincidentally, both Microsoft and Goldman Sachs have laid off thousands of people since the switch—and also helps their cash flow because unused vacation days aren’t accumulating on their balance sheet. Sorbet’s research has found that people at companies with unlimited vacation time take less time off than those that give workers a set number of days. “We used to scream that unlimited PTO is a toxic benefit,” she says, “and it’s clear that this is clearly driven by accounting.”
Though just 14% of U.S. employers offer unlimited time off, Sorbet has seen the number of companies using the system grow fourfold since the beginning of the pandemic. Meanwhile, employees seem to be feeling less and less comfortable asking for time off: More than half of employee PTO went unused in 2021, compared to 28% in 2019, according to a Sorbet survey of about 2,000 workers released in December. That translates to less money in their pockets, since vacation days are essentially time that employees are paid not to work; Sorbet estimates that the average employee is usually sitting around $3,000 each in paid time off.
Employers are also rethinking just where they want their employees to be when they are at work. Although remote work surged in popularity during the pandemic, companies are calling workers back to the office, and some return-to-office policies appear to be getting more strict, requiring workers to be in the office five days a week.
“Since last summer, we’ve been observing a bit of a mismatch—employers are definitely ready for workers to come back to the office, but workers really like remote options,” says Karin Kimbrough, LinkedIn’s chief economist. Now, just about 13% of jobs listed on LinkedIn offer remote work, down from 20% in March 2022, she says.
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These remote work policies arguably disadvantage many of the workers that companies had said they were trying to recruit and hire during the pandemic, including workers with disabilities, older workers, women, and workers from underrepresented groups. Many of those workers prefer remote work and would drop out of the labor force if forced to return to the office, says Nicholas A. Bloom, a Stanford economist who has studied the rise of remote work. Women leaders are already leaving their firms at the highest rate in years, according to a McKinsey report from 2022.
Women say that remote work helps them better balance work and family; Black workers say that remote work gives them access to jobs in locations outside of the region where they live and freedom from the “microaggressions” they frequently experience at work. According to Bloom’s research, even companies benefit: employers gain 30 minutes of work from their employees a day when those people are allowed to work from home.
In the wake of the death of George Floyd, hundreds of companies across America voiced their commitments to equality and social justice, saying that they stood with the Black community against racism and hate. Tech companies in particular pledged to hire and train more people from underrepresented communities, and launched employee resource groups to bolster minorities including Black people, women, and LGBTQ+ workers. Between 2015 and 2020, the number of people with the title “chief diversity officer” grew 68% while the number of people with “director of diversity” grew 75%, according to LinkedIn.
But these diversity positions have been first on the chopping block as tech companies downsize, saying they hired too quickly during the pandemic. In January, for example, Meta laid off most of the workers in a 12-month program focused on diversifying the company only six months into the gig, according to the Washington Post. Twitter’s DEI team went from 30 people to two since Elon Musk formally acquired the company in October, according to Bloomberg. Of 50 tech companies who recently went through layoffs, 1,500 of their onetime employees with the terms “diversity” or “DEI” in their job titles are now “open to work” on LinkedIn, according to an analysis of LinkedIn profiles performed by Sebastian J. Sam, head of partnerships and growth at Nextplay, a global network of Black and Latinx professionals.
In March 2020, Marie Roker-Jones founded Curious Culture, a start-up that worked with tech companies to help them identify and hire underrepresented groups and communities. For a while, the business was thriving—it held hackathons to link employers and talent, and companies were calling Roker-Jones, who is Black, for her input. Over the last year, she says, that interest has evaporated. One company who had hired her to hold Diversity, Equity, and Inclusion sessions told her that it was going to use an in-house employee to run the sessions instead, even though that employee didn’t have experience in DEI—and was white.
“I think a lot of companies were saying that they’re going to do DEI because everyone else said it too, but they didn’t really have a clear plan about how they were going to embed it into their business practices,” says Roker-Jones, who has since pivoted her business to DEI in the web3 space.
Roker-Jones pins the shift in attention away from diversity to about a year after the death of George Floyd, or May of 2022.
The data seem to back her up: a November 2022 Glassdoor report found that the share of U.S.-based companies listed on their site offering access to a diversity program slipped slightly in the third quarter of 2022, to 41%, from 43% the previous year. And a report by Lever, a recruiting software company, surveying 1,000 full-time employees and 500 employers involved in the hiring process found that 18% of companies decreased their investment in DEI in 2022 from the previous year.
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The commitments to racial equity that were a dime a dozen in the spring of 2020 appear to have faded into the past. For example, Jennifer Tejada, CEO of the cloud computing company PagerDuty, tweeted in May 2020 that the company “stands with the black community against racism, violence, and hate;” in January of 2023, she came under criticism for quoting Martin Luther King Jr. in an email to staff announcing that she was laying off 7% of employees.
Companies appear to also be shedding the commitments to gender equality that arose in the wake of #MeToo. The film and television industry, for example, made pledges to hire more women after the Harvey Weinstein #MeToo scandal unfolded in 2017, and for a while, it worked. The share of female directors for top-grossing films grew from 4.5% to 10.7% between 2018 and 2019 then grew again to 15% in 2020, according to a study by the USC Annenberg Inclusion Initiative. But the share has been falling since the 2020 peak, and in 2022, just 9% of top-grossing films were directed by women.
“I’m hearing from some producers that it is a little harder to get financing for women-led films,” says Kirsten Schaffer, the chief executive officer of Women in Film, an advocacy group. “I think that’s because whenever there is any kind of uncertainty, people are less willing to, quote, ‘take risks,’” she says.
The downside of cutting benefits
Ironically, employers’ changing attitudes towards their workers might negatively impact their bottom line, human resource specialists say. McKinsey has found that ethnically diverse companies are 36% more likely to outperform companies that are less diverse. Companies with the most gender diversity on their executive teams were 25% more likely to experience above-average profitability.
“If you have more voices from different backgrounds at the table, your product is going to do better and you are going to have a bigger reach,” says Sam, of the diversity recruiting agency Nextplay. Without those workers, he says, “revenue is going to be impacted.”
Since engaged employees perform better at work than those who don’t like their jobs or bosses, the cost of cutting benefits may be higher than the cost of the actual benefits themselves, says Peter Cappelli, a management professor at the Wharton School of the University of Pennsylvania. But for many CEOs, who became leaders without any training in human resources, and who are, increasingly, trained in engineering rather than in management, employee management isn’t high up in the list of their priorities, says Cappelli. “The idea of making your company better is just swamped by other concerns like deal-making and acquisitions and plotting clever business moves,” he says.
Some employees are pushing back against these changes in court. Twitter, for instance, is facing a number of lawsuits that were filed after Elon Musk told workers to take a three month severance package if they weren’t willing to work “long hours at high intensity.” Lisa Bloom, an attorney representing some of the plaintiffs, argues that it’s discriminatory towards people with disabilities to require them to physically be in the office for long stretches without rest. She also represents a few men who refused to sign the “long hours” pledge because they are parents who wanted to be present fathers. “This is not the 19th century where people are in sweatshops,” she says. “Most people understand that having a healthy work-life balance is important.”
But the biggest problem for companies changing their attitude might be this: there’s little sign that the economy is really souring. Despite some layoffs, the economy gained more than half a million jobs In January, according to the Bureau of Labor Statistics, and there were still 11 million job openings in December 2022, two-thirds more than there were pre-pandemic. Demographic trends suggest that since so many Baby Boomers retired during the pandemic, and since the U.S. fertility rate has been low for decades, there might be some very real labor shortages going forward.
Employers already complaining about a lack of skilled workers are in for a nasty surprise if their new policies drive away people who had long been on the sidelines of the labor force, including disabled workers and parents of young children. Rather than a more efficient American workplace, employers may find that they can’t find enough employees to keep going.
Then again, says Cappelli, American workers are frequently threatening to quit their jobs over some new indignity. They don’t often follow through. The pandemic may have accelerated workers’ desire to quit, but not even Return of Office mandates and scuttled diversity commitments have sent the majority of the workforce to the exits.
“Where is the outrage?” You might wonder, as you sit in your subway car alongside other workers who are also following the orders to go back into the office, putting in long hours at a job they threatened to quit if the bosses didn’t become more accommodating. “Why aren’t workers pushing back?” Cappelli, the professor, had an answer: “We crumble pretty quickly,” he says.
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