Whether it's the “Great Resignation” or the “Great Reallocation,” here's what you need to know about the pandemic's lasting effects on the workforce. Photo via Getty Images

The pandemic has altered many aspects of American life, but perhaps none as much as the way Americans work – or, if they work at all. One startling phenomenon resulting from the pandemic is a massive exodus of people leaving the workforce. On average, around 4 million employees quit their jobs each month in 2021, with resignations accelerating toward the end of last year and hitting a record 4.5 million in November.

These mass departures have created an imbalance in the labor market. As of December 2021, there were 10.9 million job openings in the United States, but only 6.3 million unemployed workers. This imbalance has contributed to the supply chain issues that have plagued many industries, as well as to some of the wage and price inflation we are seeing. Inflation has been rising while our labor force participation rate has plummeted to 61.9 percent, back to around where we were in the mid-1970s. In other words, only about 3 out of 5 working-age adults are actually working.

Embedded in the resignation data are really two types of people: those who are leaving the workforce permanently, and those who are leaving their current jobs for better, or more flexible, work. If the former group refers to a trend dubbed the “Great Resignation,” the latter is more aptly described as the “Great Reallocation.” Although fundamentally different, both trends tell us something important about the ways in which American work life has changed in the wake of the pandemic.

Workers permanently leaving the workforce may be doing so for a variety of reasons. Pre-pandemic, America was already in the Baby Boomer retirement cycle. So, for many people who might have been a year or two away from retirement before the pandemic, the fear and uncertainty resulting from COVID-19 simply delayed those plans. But with 2021’s stock market gains, and retirement accounts flush with cash, many people felt secure enough to pursue the retirement they put off during 2020’s uncertainty.

Another subset of people leaving the workforce likely did so out of a legitimate fear of COVID-19 or, on the flip side, because of burgeoning vaccine mandates. As Americans learn to live with COVID-19, and with many vaccine mandates being struck down or withdrawn, some of these workers will return to the workforce, while others will opt for retirement to avoid these issues. Additionally, with the advent of virtual school across much of the United States, many parents felt pressure to either quit working and stay home with their kids or quit an in-person job to find a work-from-home job.

Still another subset of workers—primarily those in lower-wage jobs—chose to stay home because government subsidies stemming from the pandemic equaled or, in some cases, exceeded their expected earnings from work. Since those subsidies largely ended, many of these workers have been looking to reenter the workforce. However, with the rise of artificial intelligence algorithms pruning resumes for “fit” with certain jobs, a significant employment gap on a worker’s resume could create problems for many who are now seeking work. In any event, many workers looking to get back in the game could benefit from having an expert optimize their resumes so they are attractive to the gatekeeper’s new electronic eye.

Another group of workers resigned to start their own businesses. From January to November 2021, nearly 5 million new businesses were created in the United States. This represents a 55 percent increase over the same period in 2019, which was a boom year right before the pandemic.

The workforce gap stemming from the “Great Resignation” has substantially increased employee bargaining power. In an effort to bridge that gap, employers have been engaged in a war for talent that will continue or, absent a market disruption, even intensify in 2022. In this tight labor market, employers have been realizing that there is a competitive advantage to recruiting talent away from competitors. Wages are up, with no downturn in sight. In November of 2021 alone, pay was up 3.2 percent for employees remaining in their existing jobs. But, for those employees who switched jobs, pay increased 4.3 percent, revealing an advantage to employees looking to “upgrade” their positions. To attract employees, employers are not only offering higher wages, but also, other enticements like signing bonuses, retention bonuses, private offices, and hybrid or fully remote working arrangements.

The pandemic also changed employees’ perspective on work. People became introspective and reevaluated their wants and needs. With so many forced to work from home at the onset of the pandemic, and the overall success of working from home, the flexibility that accompanies working from home has now become ingrained in people’s psyches. Many now prefer or demand jobs with greater flexibility. The success of the work from home phenomenon has also caused several employers to embrace nationwide recruiting of remote workers. These employers greatly benefit from mining a nationwide talent pool and their employees love being able to live where they want, work from home, and still receive great pay. Now, if you want to live in a cabin in Montana or a beach house in Florida, you can do that and still get Silicon Valley pay.

Given the pandemic-driven new market realities, a few things have become clear. First, work from home, to a greater or lesser extent, is here to stay. Second, whether employees work from home or at a business, if we hope to solve supply chain problems, get products back on shelves, and stem the tide of inflation, we need to get Americans back in the workforce. Third, for those considering going back to work, there is no better time than now.

------

Scott Nelson is a Houston-based partner at Hunton Andrews Kurth focused on labor and employment.

Two hiring managers weigh in on corporate DEI initiatives amid the pandemic in a guest article for InnovationMap. Photo via Pexels

How Houston companies can use pandemic challenges to foster innovative corporate inclusion efforts

guest column

They say necessity is the mother of invention, and over the last 18 months, that proverb has proven true across the world, from classrooms to boardrooms. Shuttered classrooms and businesses, overflowing hospitals, and social unrest spurred by the killing of George Floyd have forced communities and leaders across the world, and here at home, to find innovative solutions to a myriad of problems.

But even as many people long for a return to normalcy, the truth is that, in many ways, the bell cannot be "unrung." Remote work, which was a necessity for many at the height of the pandemic, has given rise to an explosion of hybrid working environments that show no signs of reversing course. In the midst of this physical separation among colleagues, leaders across industries have been forced to throw out the rulebook and reimagine what it means to collaborate.

Additionally, the disparate impact experienced by communities of color throughout the pandemic has highlighted the importance of programs focused on increasing diversity and promoting inclusion. It is no coincidence, for example, that roughly six months into the pandemic, the general counsels of 12 major financial institutions penned an open letter to the legal community calling for greater inclusivity in the legal community.

So, how can companies transform the struggles presented by the pandemic into a springboard for lasting, innovative inclusion efforts? The answer lies in taking risks, strengthening the fabric of connectivity, and looking to the future.

Crowdsource new ideas

The concept of crowdsourcing is nothing new, but at the corporate level, leaders may overlook its benefits. Hackathons—large, collaborative events originally developed for computer programming or coding—can be implemented across all employment levels to crowdsource innovative ideas.

At Hunton Andrews Kurth, the firm implements the Hackathon concept during the summer associate program, thus harnessing the creativity and progressive ideas of younger talent. When the pandemic forced the firm's 2020 summer program to go entirely virtual, the firm decided to create groups of summer associates across all offices to brainstorm programming ideas aimed at improving and sustaining diversity and inclusion initiatives.

Together with partner leaders, these summer associate teams worked virtually to create truly innovative programming ideas, several of which the firm is currently implementing to recruit diverse talent. The program was successfully replicated in summer 2021, asking participants to hack the problem of associate inclusion. In addition to generating important programming content, these Hackathons increased participant morale, encouraged cross-office collaboration, forged new relationships across various geographic regions, and tackled the timely topics of enhancing law firm diversity and inclusion that will improve client service in the future.

Other industries—from large, global corporations to small businesses—can implement the Hackathon concept to successfully build bridges and harness innovation around inclusion. For example, MIT recently held a successful hackathon to source solutions to the problem of student inclusion during the pandemic, and Microsoft sponsored a hackathon aimed at solving the education and technology gaps of remote learning brought on by the pandemic.

Moreover, experts agree that equity and inclusion initiatives are only successful with buy-in from the c-suite. In other words, fostering an inclusive corporate culture starts at the top. If corporate leadership participates in the Hackathon experience—as a mentor, judge, or coach, perhaps—as opposed to merely sponsoring the event, it sends a message to all employees that the company as a whole values inclusion as a cornerstone of corporate culture.

Embrace virtual connections

The pandemic forced us all to navigate the world of virtual meetings, and with the popularity of hybrid working environments, virtual connectivity is here to stay. Companies must embrace this new virtual frontier and implement programs that engage employees, promote collaboration, and introduce an element of fun.

At Hunton Andrews Kurth, new hires create introductory videos about themselves that are globally shared firm-wide, while veteran lawyers create their own video content introducing themselves and their practices, thus creating an immediate personal connection.

Additionally, virtual events celebrating diversity and inclusion events, such as Black History Month and LGBTQ Pride Month for example, provide opportunities for fellowship across offices and bolster inclusion efforts. Hunton Andrews Kurth hosted a virtual cooking class, based in a Dallas partner's kitchen, celebrating Asian American and Pacific Islander Month in May, which was virtually attended by 132 attorneys firm wide.

Company-wide virtual events such as escape rooms, cocktail-making classes, games and trivia build camaraderie, which deepens the bonds of collegiality and strengthens feelings of inclusion and belonging. Companies should invest in virtual technologies to help facilitate this important new frontier of connectivity, recognizing that increased digital connectivity supports a collaborative and inclusive working environment.

Highlight community outreach

In global companies, high-level, company-wide diversity and inclusion leadership should work in tandem with leadership at the local level. At our firm, for example, in addition to firm-wide diversity leadership, each local office has a specified leader committed to promoting local inclusion initiatives. While virtual events help connect geographically-diverse employees, it is equally important to offer local employees opportunities to connect in person with one another and support diversity programming in the community.

For example, attorneys in Hunton Andrews Kurth's Richmond office recently came together to learn about and pool resources to support a local artist's public art project focused on creating murals to promote open dialogue around racial and social justice. Additionally, employees might select a local DEI educational experience in which to participate as a group outside of the office, then plan to gather informally (in person or virtually) to discuss lessons learned and continue important conversations. When colleagues come together to support local inclusion programs or participate in shared experiences, new connections are forged that help support a diverse and inclusive corporate culture.

------

Rudene Mercer Haynes is a partner at Hunton Andrews Kurth, serves as a firmwide hiring partner, and also sits on the executive committee. Alex Gomez is also a partner and serves as a fellow firmwide hiring partner.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Houston femtech co. debuts new lactation and wellness pods

mom pod

Houston-based femtech company Work&, previously known as Work&Mother, has introduced new products in recent months aimed at supporting working mothers and the overall health of all employees.

The company's new Lactation Pod and Hybrid Pod serve as dual-use lactation and wellness spaces to meet employer demand, the company shared in a news release. The compact pods offer flexible design options that can serve permanent offices and nearly all commercial spaces.

They feature a fully compliant lactation station while also offering wellness functionalities that can support meditation, mental health, telehealth and prayer. In line with Work&'s other spaces, the pods utilize the Work& scheduling platform, which prioritizes lactation bookings to help employers comply with the PUMP Act.

“This isn’t about perks,” Jules Lairson, Work& co-founder and COO, said in the release. “It’s about meeting people where they are—with dignity and intentional design. That includes the mother returning to work, the employee managing anxiety, and everyone in between.”

According to the company, several Fortune 500 companies are already using the pods, and Work& has plans to grow the products' reach.

Earlier this year, Work& introduced its first employee wellness space at MetroNational’s Memorial City Plazas, representing Work&'s shift to offer an array of holistic health and wellness solutions for landlords and tenants.

The company, founded in 2017 by Lairson and CEO Abbey Donnell, was initially focused on outfitting commercial buildings with lactation accommodations for working parents. While Work& still offers these services through its Work&Mother branch, the addition of its Work&Wellbeing arm allowed the company to also address the broader wellness needs of all employees.

The company rebranded as Work& earlier this year.

Rice biotech studio secures investment from Modi Ventures, adds founder to board

fresh funding

RBL LLC, which supports commercialization for ventures formed at the Rice University Biotech Launch Pad, has secured an investment from Houston-based Modi Ventures.

Additionally, RBL announced that it has named Sahir Ali, founder and general partner of Modi Ventures, to its board of directors.

Modi Ventures invests in biotech companies that are working to advance diagnostics, engineered therapeutics and AI-driven drug discovery. The firm has $134 million under management after closing an oversubscribed round this summer.

RBL launched in 2024 and is based out of Houston’s Texas Medical Center Helix Park. William McKeon, president and CEO of the TMC, previously called the launch of RBL a “critical step forward” for Houston’s life sciences ecosystem.

“RBL is dedicated to building companies focused on pioneering and intelligent bioelectronic therapeutics,” Ali said in a LinkedIn post. “This partnership strengthens the Houston biotech ecosystem and accelerates the transition of groundbreaking lab discoveries into impactful therapies.”

Ali will join board members like managing partner Paul Wotton, Rice bioengineering professor Omid Veiseh, scientist and partner at KdT Ventures Rima Chakrabarti, Rice alum John Jaggers, CEO of Arbor Biotechnologies Devyn Smith, and veteran executive in the life sciences sector James Watson.

Ali has led transformative work and built companies across AI, cloud computing and precision medicine. Ali also serves on the board of directors of the Drug Information Association, which helps to collaborate in drug, device and diagnostics developments.

“This investment by Modi Ventures will be instrumental to RBL’s growth as it reinforces confidence in our venture creation model and accelerates our ability to develop successful biotech startups,” Wotton said in the announcement. "Sahir’s addition to the board will also amplify this collaboration with Modi. His strategic counsel and deep understanding of field-defining technologies will be invaluable as we continue to grow and deliver on our mission.”