Tag Archives: Jobs

Updates from Chicago Booth

Why Networking Matters More Than Ever
By Rose Jacobs – Chicago Booth’s Ronald S. Burt was in London one morning in 2016 reading the Times when he was struck by an image in the newspaper. It was a map that showed where the recent Brexit vote, for the United Kingdom to leave the European Union, had been strongest. People in poorer regions had tended to vote “Leave,” while those in richer London, Manchester, and Edinburgh wanted to stay.

The image reminded him of another map, from a paper he often used in teaching, in which technology entrepreneur Nathan Eagle, Cornell’s Michael Macy, and British Telecom’s Rob Claxton had visualized the UK’s telephone networks, showing that people who called a greater range of phone numbers over the course of a month in 2005 tended to live in more prosperous regions. The volume of phone calls made no difference—it was the diversity of people being called that tracked economic indicators, and that those people were not in contact themselves: in other words, that Andrew had Betty and Calvin in his call list, but Betty and Calvin never phoned each other.

As a sociologist, Burt has demonstrated over decades that diverse networks of contacts help individuals thrive on a range of fronts—from salary levels and promotions to the chances of leading a successful start-up to the ability to think strategically. Your LinkedIn account is your fate. more>

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Updates from McKinsey

Unequal America: Ten insights on the state of economic opportunity
By André Dua, Kweilin Ellingrud, Michael Lazar, Ryan Luby, Matthew Petric, Alex Ulyett, and Tucker Van Aken – As parts of the United States begin the long path to recovery from the health and economic impacts of the COVID-19 pandemic, we set out to understand what Americans think about their current economic standing, their views on economic opportunity, and the barriers they see standing between themselves and a more inclusive and prosperous future.

So we asked them directly.

Together with the market-research and opinion-polling firm Ipsos, we surveyed 25,000 Americans in the spring of 2021 in an effort to understand their perceptions of the current and future state of the US economy, to discern firsthand their hopes for the future, and to learn about the challenges they face. We also wanted to establish a baseline of data to better understand how outcomes and perceptions are affected by people’s access to resources, as well as by factors such as their identity, education, and level of caregiving responsibility. The breadth and depth of our sample allowed us to draw timely insights across demographic categories and geographic cuts (see sidebar “About the survey”). While the results of our inaugural survey reflect just one moment in time—a period during which the course of the COVID-19 virus and economic conditions were rapidly evolving—they serve as a useful baseline view into the economic experiences of a broad swath of Americans.

What we learned was sobering. Among the findings: Americans report that their financial situations have deteriorated over the past year, and at the time of our survey only half of all respondents reported being able to cover their living expenses for more than two months in the event of job loss. Our survey results also indicated that the pandemic has harmed the economic well-being of many groups, exacerbating inequalities that existed before the crisis. Americans reported facing numerous barriers to economic opportunity and inclusion—among them, inadequate access to health insurance and physical and mental healthcare, as well as to affordable childcare. Moreover, many respondents said that they feel their very identity limits their access to jobs and to fair recognition and reward for their work. more>

US consumer sentiment and behaviors during the coronavirus crisis

Amidst the Delta variant, US consumers exhibited strong optimism and spend in July and August, driven by higher-income and younger consumers.
By Tamara Charm, Janette Hwang, Jackie Laird, Nancy Lu, Jason Rico Saavedra, Andrea Leon, Daniela Sancho Mazzara, Anirvan Maiti, Kelsey Robinson and Tom Skiles – Given the recent surge of the Delta variant, we will continue to track changes in consumer sentiment and behavior as the next normal continues to evolve.

Consumer optimism and spending have remained strong

High levels of optimism and spend through July and August, even as the Delta variant spread in the US, have been driven by higher-income and younger consumers (optimism at 57 percent and 59 percent; spending growth of 11 percent and 15 percent year over year relative to pre-COVID-19 respectively). Lower-income and older consumers are less optimistic (optimism at 36 percent and 35 percent), and lower-income consumers in particular are spending less (spend declined 9 percent year over year relative to pre-COVID-19). While the intent to continue to splurge is less now than it was in February, it is still strong among younger, higher-income consumers.

Omnichannel is ascendant and here to stay

Even as consumers go back to stores, with 5 percent growth year over year in August, e-commerce sales also continued to experience strong growth, rising by about 30 percent year over year. This has meant elevated online penetration of about 30 percent higher than pre-COVID-19. Omnichannel shopping is ascendant, with about 60 to 70 percent of consumers across categories shopping/researching both in store and online and social media influencing up to 40 percent of consumers in categories like jewelry, accessories, and fitness. more>

The looming harm of tax harmonization

By Akvile Jaseviciute and Bhuvam Patel – The OECD’s proposals to harmonize international tax regimes were generally welcomed by governments without considering potential benefits of tax competitiveness. Blinded by their wish to stop multinational corporations from moving their business to jurisdictions with more favorable tax regimes, few considered the practical implications of OECD’s plans. Currently, OECD countries have divergent tax regimes – the 2021 edition of the International Tax Competition Index produced by the Tax Foundation ranked countries regarding tax competitiveness. Estonia earned the top spot in the ranking because of its relatively low corporate tax rate, while Italy and France fared poorly due to features like punitive wealth and financial transaction taxes. We hence question, why countries with favorable tax systems should be held back by a harmonized but uncompetitive tax regime?

OECD Proposal Problems

Current OECD proposals on tax harmonization focus on ending the perceived tax ‘unfairness’ while providing little practical benefits. The first Pillar aims to set tax brackets universally on companies making global sales above €20 Billion and profit margins of more than 10%. However, in practice, large companies often place the taxpaying burden on other stakeholders – employees or investors. Therefore, instead of benefiting the most vulnerable, the proposal could be detrimental to workers as companies choose to cut wages instead of letting their revenues shrink. If insufficiently considered, such an outcome could further disadvantage low qualification workers, which are already significantly affected by the Covid-19 pandemic. more>

Car Makers Reap What’s Sown During Chip Shortage

By George Leopold – Despite optimistic predictions that auto makers have seen the worst of ongoing semiconductor shortages, sources closer to the technology supply chain maintain things will get worse before they get any better.

Industry consultant Semiconductor Intelligence downplayed auto industry assertions about the second quarter representing the “trough” of IC supply chain disruptions. Citing a growing list of auto production cutbacks stemming from the chip shortage, the market tracker countered in recent weeks that “the shortage of semiconductors for automotive applications is getting worse.”

It cited production cuts at Ford, GM, Hyundai, Toyota, the merged Fiat-Chrysler-Peugeot group called Stellantis and Volkswagen. more>

Five Ways to Build a New Macroeconomics

What is taught in today’s graduate programs as macroeconomics is entirely useless for the kinds of questions we are interested in.
(evonomics.com)By J.W. Mason –  Jón Steinsson wrote up some thoughts for this panel about the current state of macroeconomics. He begins:

There is a narrative within our field that macroeconomics has lost its way. While I have some sympathy with this narrative, I think it is a better description of the field 10 years ago than of the field today. Today, macroeconomics is in the process of regaining its footing. Because of this, in my view, the state of macroeconomics is actually better than it has been for quite some time.

I can’t help but be reminded of Olivier Blanchard’s 2008 article on the state of macroeconomics, which opened with a flat assertion that “the state of macro is good.” I am not convinced today’s positive assessment is going to hold up better than that one.

Where I do agree with Jón is that empirical work in macro is in better shape than theory. But I think theory is in much worse shape than he thinks. The problem is not some particular assumptions. It is the fundamental approach.

We need to be brutally honest: What is taught in today’s graduate programs as macroeconomics is entirely useless for the kinds of questions we are interested in.

I have in front of me the macro comprehensive exam from a well-regarded mainstream economics PhD program. The comp starts with the familiar Euler equation with a representative agent maximizing their utility from consumption over an infinite future. Then we introduce various complications — instead of a single good we have a final and intermediate good, we allow firms to have some market power, we introduce random variation in the production technology or markup. The problem at each stage is to find what is the optimal path chosen by the representative household under the new set of constraints.

This is what macroeconomics education looks like in 2021. I submit that it provides no preparation whatsoever for thinking about the substantive questions we are interested in. It’s not that this or that assumption is unrealistic. It is that there is no point of contact between the world of these models and the real economies that we live in. more>

Updates from McKinsey

An on-demand revolution in customer-experience operations?
Whether relying mainly on in-house or external talent, gig-style staffing models—when managed carefully—could give customer care the horsepower and flexibility it needs for today’s increasingly volatile markets.
By Vinay Gupta, Raelyn Jacobson, Paul Kline, Manu Mehndiratta, and Julian Raabe – When businesses across the globe were forced to shutter in 2020, the leaders at one regional North American bank shifted to virtual mode. Anticipating that customer-call volumes would remain elevated through the early months of the COVID-19 pandemic, bank leaders created a streamlined training module to cross-train sidelined branch workers. The extra support from branch colleagues helped the bank to manage the high volume of calls. Better still, because the supporting workers were branch personnel, their knowledge of the bank’s processes, products, and culture helped maintain the high level of customer satisfaction that the bank had worked so hard to achieve. Leaders learned that this internal “gig worker” approach could be a solution for managing future spikes in demand, whether from unforeseen events or seasonally based capacity increases. And, during a time of great uncertainty, it gave employees new opportunities—to work flexibly, learn new skills, and even find new career paths. That flexibility may give companies an edge now that many are fighting a “Great Attrition.” 

The COVID-19 lockdowns sparked a major scramble to move business to online and phone-based channels. Not every company, however, was prepared to handle the ensuing digital deluge; at this point, there are little data on how effectively companies coped. But the experiences of companies to date show that many organizations are now rethinking how they staff customer-care operations.

Flexible staffing—the use of external talent from outsourcing providers or independent freelancers—has been a staple of customer service for decades. But the pandemic may well be the first time that the redeployment of in-house talent from other departments has occurred on a relatively large scale.

Both approaches, externally and internally sourced, constitute the core of what we call “gig customer-experience operations,” or Gig CX. And it behooves companies from across the industry spectrum to consider making this strategy a part of their regular operations. In this article, we explore the pros and cons of Gig CX and identify four essential elements that must be in place to make it work. more>

As Consumer Mood Sours, Are Investors Overlay Optimistic?

Why U.S. stock markets may reflect too much optimism about consumer spending, heading into what could be a subdued year-end shopping season.
By Lisa Shalett –  U.S. consumers have a lot on their minds recently, weighed down by the coronavirus Delta variant, a more-sluggish-than-expected jobs recovery, inflation worries and the spectacle of political wrangling in Washington, D.C. At the same time, financial markets seem to be “climbing a wall of worry,” confident that these growing anxieties about inflation, supply-chain disruptions and the economic drag from the pandemic will soon pass.

We believe the consumer perspective warrants attention. Negative sentiment, especially heading into the year-end holiday season, could presage market weakness, catalyzed by lower-than-expected spending and disappointing corporate earnings.

Let’s first consider that consumer confidence and stock market moves have historically been well correlated; any notable divergences tend to be short-lived. But today, the gap between the two remains uncharacteristically wide. On the consumer side, the Conference Board’s confidence index fell in September for the third straight month, with the gauges of current and future conditions at 5- and 10-month lows, amid lingering concerns over higher prices and a slow job-market recovery. Note that job growth stalled again in September, missing estimates and signaling that the forces holding back hiring or returning to the workforce may persist.

At the same time, investors’ “buy the dip” mentality, anchored by a belief that inflation is transitory and corporate margins will be sustainable, has bolstered the stock market. U.S. equities did hit a rough patch in the third quarter, but the downturn was contained to within 5% of the pre-Labor Day highs, and advances so far in October suggest that the third-quarter speedbumps may now be behind us. more>

Updates from McKinsey

When agile marketing breaks the agency model
The journey to agile marketing can be hard. But for many marketers and agencies, it offers the opportunity to forge a better partnership.
By Clay Cowan, Jennifer Ellinas, and Rachael Schaffner –
Key takeaways

  • Agile marketing teams can deliver real business value for an organization.
  • But agile transformations can be challenging and place outsized strain on a marketing group’s agency relationships.
  • The most successful agile marketing teams are doubling down on sound agency management practices, including approaches to scopes of work, fee arrangements, improved operating model, talent and culture, and metrics./li>

Marketing leaders are increasingly turning to agile methodologies to help improve the speed and performance of their teams along with the many partners they use for creative, production, and measurement expertise. In our experience, though, the shift to agile is often far from seamless for these constellations of teams. Our recent survey of marketing executives found that only 3 percent characterized their transition to agile marketing with their partners as “smooth,” while more than 80 percent reported the journey to be filled with obstacles.

Managing multiple external partners can already be complicated in a traditional marketing department, and it’s an understandably significant shift to borrow operating methodologies from the IT world. Compounding that challenge is the fact that marketing requires engaging with so many more types of third parties, which include measurement, platform, and publishing partners. Google, Twitter, Facebook, and LinkedIn were mentioned by 40 percent of the executives as being among the additional partners they coordinate with today.

It’s no wonder, then, that when switching to agile methods, marketers often struggle with how best to involve their external partners and other third parties in their transformation. The result can leave some professionals feeling that agile marketing broke their agency model. more>

The real stakes of Apple’s battle over remote work

By Shirin Ghaffary and Rani Molla – For the past several months, a fight has been brewing inside Apple, the world’s most profitable company, about a fundamental aspect of its business: whether its corporate employees must return to the office.

Apple expects employees to return to their desks at least three days a week when its offices reopen. And although the Covid-19 delta variant has made it unclear exactly when that will be, Apple’s normally heads-down employees are pushing back in an unprecedented way. They’ve created two petitions demanding the option to work remotely full time that have collected over 1,000 signatures combined, a handful of people have resigned over the matter, and some employees have begun speaking out publicly to criticize management’s stance.

Apple employees who don’t want to return to the office are challenging the popular management philosophy at many Silicon Valley companies that serendipitous, in-person collaboration is necessary to fuel innovation. more>