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Worker power has started to shift ‘a slight bit’, The Muse CEO says

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The Muse CEO and Founder Kathryn Minshew joins Yahoo Finance to discuss the jobs market, the balance of power between workers and employers, and employee retention.

Video Transcript

SEANA SMITH: A hit to career confidence, risk of recession, more layoffs, high inflation-- that's all putting workers on edge, driving them to stable jobs, maybe even back to the office. We want to talk about this with Kathryn Minshew. She is the founder and CEO of The Muse, which is a job search site. Kathryn, it's great to have you. Thanks for joining us.

KATHRYN MINSHEW: Thanks for having me.

SEANA SMITH: So talk to us about this shift, because for so many months, we've been saying that the ball is in the worker's court right now. They can make demands. This is the best time to ask for a raise. Now we're hearing that hey, it may not be the best time to change your job. What's going on?

KATHRYN MINSHEW: So this is a debate that has been going on back and forth for the last several years. Who has the power? And I will say, we're seeing a shift towards workers being more careful, as you said. There are many employees who are starting to ask questions about whether the businesses that they're joining, or they're thinking of joining, can survive a recession. At the same point, I have spoken with a few HR leaders that are almost gleeful about what they describe as the return of power to the employer.

And I can assure you that is, unfortunately, not the case. Workers do still have a tremendous amount of power in this economy. And there are still almost two open jobs for every person looking for work. So the considerations are changing. But I think the fundamental balance of power has only shifted just a slight bit.

RACHELLE AKUFFO: And Kathryn, some of that glee that you were just talking about there from some employees, it might be because we saw cases where people have ghosted employers after accepting a position or perhaps not even showed up for work. But in terms of employers, are they focusing now then more on retaining the talent that they have? Or are they still as eager to try and fill these roles?

KATHRYN MINSHEW: We're seeing both. I think employers are realizing that retention is so key, particularly because in most businesses, you don't actually start to benefit from a recently hired employee until they're around six months in the role. And so a lot of companies are starting to realize, we've hired some great people over the last few years. Let's make sure that we're investing in them, that we're keeping them, and frankly, that as we're hiring more, we're paying attention to the retention of the people we're bringing in.

That said, The Muse is a hiring marketplace. And we are still seeing so many companies looking for talent. In many cases, they have talent gaps that they need to fill. They are still expanding in parts of the economy that have not been as hard hit. Or they simply have a number of open roles that they need to fill. And so I think that the doom and gloom of the headlines, it's not quite translating into reduced demand for workers right now, at least on a broad scale.

DAVE BRIGGS: We did, Kathryn, see the return to office rate higher than it's been since the pandemic. Now, granted, it's only 44%. But that is up rather dramatically in the last couple of months. Is some good, healthy fear, perhaps getting some people off the sidelines, a net positive for the economy?

KATHRYN MINSHEW: Yes, so when people are concerned about keeping their job, they are more likely to do what their employer asks them to do. And so it doesn't surprise me at all that in this moment, we're seeing some employers press harder on asking or requiring workers to return to the office. And we're seeing a lot of people say, OK, I'll give it a try for now.

That said, you know, workers remember how their employers treat them in the good times and the bad times. So I will say that a lot of companies that took advantage of the high levels of unemployment in 2020 to sort of get things from their workers, those employers were often the hardest hit by the great resignation. So I am encouraging people to consider this a two-way street. Listen to your employees. And don't take advantage too much of the market power that you might feel like you have as an employer right now.

SEANA SMITH: Kathryn, at a time like this when there's so much uncertainties, clearly, fears of a recession-- take a look at the selloff today-- a lot has to be worked out. What is your advice, though, to employees out there or potential job seekers who have been told in the past that it's risky to change jobs when there's a threat of-- when there's a threat of a recession? Is that still true?

KATHRYN MINSHEW: You know, I think it is and it isn't. I would encourage job seekers to think about whether the role that they're in serves enough of their needs for now. And if they are fairly risk averse, if you don't have a emergency fund or a safety cushion, it could be a smart time to wait and keep an eye on the economy. That said, again, there are a lot of businesses still hiring. They are still bringing people in. And so, I'm also seeing a lot of workers say, you know, I don't want to miss the moment.

And I think that it really is a personal decision. It's obviously not one that anyone else can make for you. But the demand for new employees is still there, especially in certain industries and sectors, like engineering, sales, technology roles, data roles are very, very highly in demand. And so workers still do have, I think, far more power than you might believe from reading the headlines.

RACHELLE AKUFFO: And I want to ask you about job hopping. Obviously, with the Great Resignation or the Great Realization, a lot of people seeing that if they do job hop, that they're able to get a higher salary than some of those who were sort of already at the company. Do you expect to see an end to the Great Resignation at some point? And what do you think will actually trigger that?

KATHRYN MINSHEW: So I think every phenomenon comes to an end. And we won't be in exactly this thing that we call the Great Resignation indefinitely. But some of the underlying trends, I don't think, are going anywhere. So one of them, for example, is the willingness of workers to leave jobs that don't suit them in a short period of time. We coined a term at The Muse, we call shift shock, for the phenomenon that happens when someone starts a new job and realizes with surprise or regret, this isn't what I expected.

But what we've seen in the data is that 80% of employees under age 40 would consider it acceptable to leave a new job in under six months if it's not as advertised. And this is a big difference from the sort of unspoken agreement five, 10 years ago, that a new employee should stay for one to two years. So I don't see that going away. I think that is an expectation that many younger workers have that work needs to work for them. And so I think we'll continue to see employers lose people one, two, six months into or after hire if they're not delivering on the promises they made during the recruitment cycle.

That said, I do think that there's been a kind of particular surge of resignations, the Great Resignation, the Great Rethink. A lot of that has been coming out of COVID and coming out of the changed relationship that a lot of people have with work and with their jobs since 2020. So we are likely to see that winding down. But I don't think a lot of the underlying phenomenon are going to go away.

DAVE BRIGGS: Some good, healthy fear at Twitter offices today, thanks in part to Elon Musk. That, we know. The Muse CEO Kathryn Minshew, great to have you. Thanks so much.