The Care Economy
What is the state of the care economy and how is it impacting the future of work? Listen as we chat with Professor Joseph Fuller, Professor of Management Practice in General Management and the Co-Director of the Managing the Future of Work Initiative at Harvard Business School, who shares his thoughts on business strategies, how to navigate this new and evolving education-care landscape, and the impact on companies' ability to attract and retain an engaged and productive workforce.
Listen to the insights from Professor Joseph Fuller.
Kayla: So, thank you for joining us as we get Behind Bundle to see how they are breaking down barriers. I'm very excited that joining us today we have Professor Joseph Fuller, who is a professor of management practice in general management at Harvard Business School. But Professor Fuller has not always been an academic. After graduating from Harvard Business School, he went on to found and leave Monitor Group, which was acquired by Deloitte, where he specialized in consulting with advising executive for 30 years. Professor Fuller is currently the co-director of the managing the future of work initiative at Harvard Business School, which provides actionable research and strategies on how businesses can successfully navigate the rapidly evolving landscape of the modern workplace, so that it can continue to attract and retain and engage a productive workforce. Welcome Professor.
Professor Fuller: Thank you Kayla, delighted to join you.
Kayla: Thank you! So today we are re going to talk about one of the research areas that the managing the future of work project is focused on, which is workforce demographics and the care economy, in the context of the current state of our country. Professor Fuller this has been extremely challenging and unique time for companies and employees, can you share with us your thoughts on how you think workplaces will respond once a pandemic is over? What workplace trends that we are seeing now do you think will run their course and which will last?
Professor Fuller: Kayla, I think that it’s still early to predict what will happen, but I think we know several of the truths that are going to influence what does happen. We can see that in a lot of data, both in companies I consult to and some surveys, that now that the sense of urgency about the move to remote working has passed, both employees and employers are reevaluating what to do. I don't think we'll see companies with major metro downtown skyscrapers calling back a significant percentage of their workforce to those sites for the indefinite future. By that I mean probably not until we have some kind of vaccine in place. That doesn't mean they won't call back some of their workforce. So, we're going to have extended period Operating under ad hoc rules if you will. I think one of the things that that is quite interesting in the data is that executives, senior executives, who usually have a surround that's more salubrious for work at home, are now understanding the impact of a working from home for people with, live in more modest places and very much for employees with caregiving responsibilities. The combination of those burdens and the fact that it looks like a lot of schools will be practicing social distancing well into next year suggest that there's going to be, in some ways, a new new understanding reached between employers and employees. Historically employers have basically offered terms to employees, you know, “here's your benefits package,” “here is your pay,” “here's your bonus potential” “here's your title,” ‘here's the job description.” You show up for work and I the employer decide if you're satisfied, and essentially, except on the margin, the employees didn't really get to vote other than by accepting the job and continuing to work for the company. There wasn't a lot of negotiation about, well am I comfortable going back to work even though you say you're abiding by all the public health rules put in place by local government. Or you're saying that you need me to come back to work, but let's say I'm in a traditional household where both the adults work and their children presents. What if the partner is an essential worker, or with as a physician or of sanitation work, it doesn't matter. So I think we're going to get to something where employers are going to have to get used to the idea that employees now are going to have a certain degree of say so, about are they willing to do what the employer expects. And that's very, very much going to be influenced by the care agenda. Because of, for example in multiple cities and towns in Massachusetts, where I live, they're already going forward with choices like going to parents of elementary school kids, saying “2 choices sign up for online for the entirety of next year and there's no going back on it unless we the school districts say” or” your kid can come every other week for in person and then online the other week.” Well if you got the adults in the household have, both have, demanding full time jobs even if they can be done remotely, something's gotta give. And people have been making do for two or three months knowing that this is an extraordinary crisis, but now that looks like it may be more than a year or two in duration. It’s going to read reset the dialogue between employers and employees.
Kayla: And so, on that note there's been a lot of articles about how COVID-19 is impacting primary caretakers, forcing them to choose between their careers and children. You know most recently there was an article New York Times, that had a title that a lot of people really gravitate towards, which is in the COVID-19 economy you have a kid or a job you can't have both. What are your thoughts on that? Do you think the future work force will need to make these kinds of changes? How do you think employers can better support employee caregivers and prevent them from having to choose?
Professor Fuller: Well, it's, I think as I said, it's, it's still early. I think that kind of binary choice isn't sustainable for a lot of workers and isn't sustainable for the economy. So, we're going to get to some new types of working arrangements. Companies are just now beginning to turn to questions like, “Well, are we going to start changing our job descriptions?” Or, one thing that is quite interesting is, a number of companies are finding that their use of labor platforms, for higher skilled white-collar workers, is enabling them to fill gaps and continue on with important projects that otherwise they wouldn't be able to do. You know, there's an old joke that you shouldn’t predictions, especially about the future. But you know, there are couple of- let me go out on a limb here. The first thing is, I think there will be a revisitation of both what benefits are offered. Certainly, by larger companies with significant white-collar workforces, high value-added workers. And especially those workers with state-of-the-art digital skills because
one thing that's happening is that every large company I've talked, to this is confirmed by surveys done by Deloitte with my friend Alan Murray at Fortune magazine, all companies are going to pick up the pace on their digitalization and their transformation digital. That means those white-collar workers with state-of-the-art digital skills and AI and digital marketing and data analytics and machine learning - they’re going to be in a super-premium. Supply demand imbalance is going to get bigger. So, you're going to have as employer, you're going to have to beware with those workers of not being responsive enough and waking up and having those critical workers leave. So, you're left trying to back fill in the teeth of a bull market for those people. So, I think that actually that's going to lead to revisitation of what constitutes a core package of benefits. And, I've been saying a number of forum, including a couple of podcasts, that I think within 10 years, maybe even sooner, the care benefits on offer from companies are going to start approaching the importance it that health benefits are given today by job seekers, certainly in certain class of trade. That of course gets for, even you get to the question if, in some future government the United States you end up with a single payer system for health care. I think a second thing we're going to see is, I think we're going to see, a lot of dynamism and originality in working relationships. What do I mean by that? right now there's basically a binary model for getting your work done if your company. I employ somebody, could be full-time, could be part time but I have an employee I have a relationship with them. Or I hire A supplier to do the work and they've got employees. That's it. We've seen the beginning of an emergence of a new type of staffing model, way to get work done with gig platforms for contingent workers. Not obviously, obviously we're not talking about Uber or Handy or ones for skilled workers, for lower skilled workers. But I think we're going to see either significant, newly defined jobs. I think we're going to see more seasonal workers - not picking strawberries, but I think we're going to see older workers who are going to say, “I basically want it to part of my deal that on Memorial Day, late May, I am shutting down, I’m available Monday mornings, every week, for the morning only and I'm coming back after Labor Day and that's my job.” And it's not, and I'm not the only one in the company that has that everyone knows the deal. It isn’t an “Oh Kayla, and oh Joe got this really super sweet deal.” That's just fin. Or I work four days a week and that's it. And I assume, you can assume that I'm out of the solar system Monday weekends and Monday or whatever it is. I think we're going to see new types of part time work in white collar type jobs. All of those things are going to be necessary for a couple of reasons. One is so I can keep and get the talent I need and accommodate their lives, and the 2nd is 'cause they really aren't going to be any alternatives. So, you know, employers in ‘08, ’09 really learned some stuff that they could do with their workforces as a function of having to rapidly reduce costs in a demand depression basically. And some of the things they did were exigencies and they reversed as soon as they could, but necessity was the mother of invention and they learned some things. Just quick illustration - Part time workers became a permanently larger percentage of the workforce after 08,09 right through to 2019. And what that shows is employers figured out, you know, we don't really need all these people as much as we thought, so let's sculpt our workforce a little more finely. We’re going to have the exact same types of learnings from COVID. We don't know what all them are, but I think one of them will be proliferation of work relationships is no longer the binary model and that care is going to be a differentiator in the market for the type of talent that everybody is going to be clamoring for.
Kayla: It sounds like you think employees are going to have a much larger voice in the employer employee relationship than before. Because when I speak to companies it sounds like they're really starting to survey employees more often now, in a pandemic. And I'm just wondering, you know, that if that relationship continues, how employees will just have more of a voice with senior management, because of the COVID and the learnings that they take from that. But if they listen to their employees, they can really make them happy and retain them going forward.
Professor Fuller: I think that's partially true. I think it's as is always the case, it's the talent that is mobile, that is, always has alternatives that will get a bigger share of voice. I think also the executives are going to be listening to five or six different constituencies. Yeah, they'll be losing their employees, but they're going to be listening to their head of HR who's going to be saying, “This is what the surveys say, and by the way we're monitoring social media and Glassdoor and The Vault, and that's what these things are saying about us.” They're going to talk to their chief counsel. And the chief counsel is going to say “you can't say to somebody, that it's in the judgment of the company you can't do your job remotely and you've got to show up at the office 'cause we say so, when they're saying I've got a comorbidity I've got a kid or a parent that lives with me with a comorbidity. Or they're just saying I'm anxious and I don't want to.” I think we're going to see that those CEOs are going to be hearing from their boards. I think it actually, this may seem a little bit cynical, but I think that companies fell all over themselves, certainly large companies, (who is we know tend to set the rules of engagement for employment). They fell all over themselves to declare their all about their employees’ health and safety when the crisis started. And that's absolutely appropriate, that’s exactly what they should have done. But boy, there’s an awful lot of press releases and town hall meeting transcripts and blast emails from executives that state the company’s obligation to the workforce in absolutes. Walking away from that now is going to be really hard. And so now if you're going out of business, and United Airlines can't fly without pilots and flight attendants, and stuff like that but… One other thing I'll just say, certainly in some of the companies I've been in deep conversations with, we're seeing another trend which is increasingly people actually miss work. They miss being with colleagues. They feel that they're getting often to the edge of what they can do in terms of productivity and projects because they're often working on things they already had in train. A large company, I'm under strict NDA with them, was talking about how they’re simultaneously seeing 2 events. One is, their software engineers are over 35% more productive than they were prior to COVID. Why? They're not commuting and not going down to the cafeteria, they've got business meeting after business meeting after business meeting being scheduled, so that kind of hour of the coffee klatch or looking out the window or checking your personal emails is just gone - they’re crowded out. But the other thing they're seeing is more people in their performance review are raising questions like, “well what would be, you know, if I took an unpaid leave, could I come back?” or “I'm beginning to think about doing something else because this is sitting looking at a screen all day even if I got blue tinge glasses I'm getting sick of it and I kind of like to talk to another human being.” So, a lot of moving parts of this where we haven't, we haven't gotten to the bottom of it.
Kayla: That's super interesting. And then you said something earlier that I thought was interesting - how you thought that there's going to be high demand for very highly skilled workers with experience in digital, AI engineers etc. How do you think we can get more of the workforce there? Like is this a real opportunity to have more training, to have more companies offering education and trying to use our existing workforce and skill them up or pull out others from economy. Like how do you see that evolving? And it sounds like we have to do it, you know, very quickly and there's not a lot of time that we can waste.
Professor Fuller: Yeah well, I think that the companies have the last several years, begun to show a lot more sense of ownership in a lot more innovation and effort to fill the skills gaps as they see them. Not very nice way to put it is they've just given up waiting for the education establishment to figure it out. Now I think there's a lot of, I don't really want to say blame, but I think I think they are the reasons that the education establishment isn't well aligned generally with private sector employers and vice versa - there’s plenty of blame to go around. Employers have not historically wanted to engage the education sector, or they get frustrated with the education sector. They have, because of technology, fallen into the lazy habit of playing the spot market for employees, they never want to hire until the last minute. They, you know, very cautious about doing work-based learning or apprenticeship models for lots of different reasons. And then they curse the fates when the economy is strong or there's asymmetric to growth and demand for something like cyber engineers. And then well, “the systems letting me down.” So that's the employer version. The educator version is “we're not pre-career system, we’re about educating people.” They, metrics and incentives in education don't match at all well with employers’ definitions of success. Highly politicized environment, highly unionized environment, so very difficult to get them to accommodate. And you know, community college or university can't create customized programs to create 10 graduates a year. And all their economics are designed for scale. I think we're going to see a couple of things in this. We're really, we're really on the cusp of a remote learning revolution. Well, it was very interesting but edX, (which is the the online consortium that Harvard and MIT founded competes with Coursera that was founded by Stanford University) - their enrollments in online learning went up comparison March 19, 2019 March 2020 by a factor of 30. Not 30%, 30x, spread pretty evenly across their portfolio. So, it wasn't just people saying, “Oh my gosh, I better learn how to program in SQL,” or “Oh my gosh I want to learn more project management.” They were massive enrollment spikes on courses on justice and literature - shows that not everyone was Netflix binging. Now that's all oriented toward people that already have degrees. Unfortunately, what COVID is going to do, is accelerate what's been up call a barbarization of the workforce - where you've got at the upper end of the workforce cognitive workers, who do non routine work, who are highly credentialed to very high percentage have at least an undergraduate degree. The other end of the distribution, less than high school, high school, some college, no degree, low wage service workers, low educational attainment. And when there's a co-linearity between lower levels of educational attainment and race in the United States. So, on educational attainment basis, the demographic with the lowest average individual attainment are Hispanics followed by African Americans. That, unfortunately that population is heavily weighted towards sectors that are going to be even, are going to be late recovers from COVID. Hospitality, food service, retailing, basic jobs like that. So, states are going to face a very big dilemma here. Where on the one hand there going to be an intense budget pressure. Some of that budget pressure is going to come from increases benefits claims with unemployment insurance or other forms of public support for unemployed workers. But they're going to have, my estimate is around 8 million workers, whose jobs are not never going to - because that restaurant is closed, because the Marriott is only going to open odd number fours indefinitely not the even number floors, I need to have the housekeeping staff whatever else. So, states are going to, I hope, become little pockets of innovation to try to find things that works for training to get people back in the workforce. Whether or not, they're obviously not going to be trying to lead people into being AI experts. But even, companies are going to be rapidly accelerating the deployment of digital technologies at all pay grades and all job descriptions to make as many processes touchless as possible, to reduce the amount of human to human interaction, reduce it density of headcount. So even if you're going to be a shift manager at a fast food restaurant, a QSR, a quick service restaurant, you're going to have to know, be more comfortable, more literate in with digital technologies and interfacing with smart devices and terminals in 2022 than you ever were in February 2020.
Kayla: That’s super interesting. No, I think that while there's a lot of negatives that have come from the pandemic, I think there's a ton of opportunity, as well. Just shifting gears a little bit back to care - so there's been a lot of focus on parents and the struggles of working parents during this time. And I find that many forget that there's also a lot of people taking care of elderly, whether it's their parents or someone else, and they also have a day job and this is very much impacted them. So why do you think there's been so much of a focus on the parent caretaker side but not the caretaker of others? And what do you think will drive employers to evolve care benefits beyond those that are just for parents and it will be for all caretakers?
Professor Fuller: Yeah well, I think one is obviously that the shutdown of the K through 12 system basically nationwide, that's a huge employer. That touches every bit of, virtually every street in every neighborhood, and even if you go to retirement community in Florida or Arizona, their kids, their grandkids are being affected by this. So, it becomes front and center. Also, it's, my research at the Managing the Future of Work Project at Harvard, on care, says that caregivers for seniors, parents, other family members, members of a chosen community are much less forthcoming about that obligation. And so, it's a little bit in the background all the time. Now it becomes profoundly more important in COVID, starting with the fact that seniors are less likely to be digitally competent. But obviously, the most important thing is that seniors are particularly at risk from COVID. Something like 4% of the deaths in the United States are people below the age of 55. So, this is a senior epidemic. And it's a particular epidemic in nursing homes. So now you've got a caregiver for parents, who their default/maybe last chance/ maybe preferred outcome, is assisted living or nursing home facility, all of a sudden that looks like a very unattractive option to people. The nursing home population has declined by over 10% over the course of this. Unfortunately, some of that is mortality, but some of that is both spiking because of COVID, but it's also people coming in saying, “I'm taking mom home, or I'm taking my folks or dad home.” The likelihood that seniors can do what they have been doing for themselves has gone down. Are they going to do their own shopping? Are they going to go to the bank? Are they going to go to the dry cleaner? The burden on famous sandwich generation. And even those whose kids are grown but are taking care of seniors is changed markedly. And it doesn't matter why you're distracted at work. You're worried about your parents who have early onset cognitive disorder. They may live in a different state, but who, you're worried about who's look in on them, are they going to be OK? You’re worried about being absent being late, being unable to go to meetings or historically would say do business travel because of that. It doesn't matter if it's because of your kid or your 75-year-old mom. So, this is going to be a whole new horizon. And companies outside of making combinations, usually at the at the level of the supervisor, or the organizational hierarchy not by policy, have basically limited the flexibility they are prepared to offer someone to pretty visible exceptions. “I have a mortally ill spouse” or “I have a special needs child.” All human beings are empathetic with situations like that and companies are no different. But the “Gee, my mom is getting older, my dad's dead, I need, you know, she's - I'm concerned about her.” That hasn't been on the radar stream for companies to think that they have any responsibility for it. In the intellectual sense, they really don't have any responsibility for it. But if you want a productive, mobile worker who's not constantly checking LinkedIn to see if they've got a headhunter email, and who's going to be engaged and ready to work, you better start worrying about it. I think companies are beginning to get it. They tend, they seem to be getting it more in slices. “Oh, maybe we need to look forward to having an onsite childcare facility at the hospital where all the workers are essential.” Or, “Maybe we need to be providing a certain amount of, stipulating a short-term emergency, not in terms of 911 emergency, but emergency childcare back up. We're going to get a corporate relationship with a Bright Horizons, with a Care.com, with their kind of care at work offers and we're going to do that. But they're not, they don't think about it holistically. That we're going to have to think about workers, while they’ll have common needs almost on a case by case basis, especially those they absolutely have to retain and allow to be productive
Kayla: How do you think we can get employee caretakers, whether they're, you know, parents taking care of their children or parents taking care of their own parents or another family member? How do you think companies can enable them to speak out and voice their concerns instead of being stressed out and not being happy their job and then just leaving? Like how do we prevent them from leaving the companies?
Professor Fuller: It's a really interesting question Kayla. Because, you know, the Puritan work ethic is alive and well in the United States. It’s not a typical worker’s reflex to say “Gee, I've got a problem and I need your help with it.” It's and they didn't, those workers, whether they’re my age, your age, or just coming out of school now. They didn't grow up in households where that happened, their previous work experience that didn't happen very much. Our data is that the best things companies can do, is to very deliberately make the topic discussable. And the easiest way to do that is for leaders to role model it. So, when, let's talk about the human groups - whether it's countries, or sports teams, or companies - they live on stories. You know, the story of how we got the great deal. The story about how that great product got invented. The story about how we fended off the activist or whatever else. And, so what are the stories of leaders in businesses? It's not about how oh, he has dinner with his kids every night. It's not, you know, she was really meticulous about taking all of her vacation time and ensuring all her subordinates did it. It’s we walked through walls, we charged the enemy path Palace or something. We took the hill, we, you know, we stayed up all night three straight nights and, you know, we launched the product successfully. So, when a C-Suite executive high-profile business leader is showing up at the 6:00 PM, “we're going to have the support group for special needs kids.” Not to say, “oh I'm so glad we have this group and, you know, we want to help you but because I’ve got a special needs kid.” You know, when they're saying “gee, I know how distracted I was when I found out my parents got a diagnosis or when somebody fell and broke their hip or something.” They cause that to be also within the purview of supervisors to make accommodations. This gets me back to what I was saying about the emergence of new working relationships. I think in the next five years you're going to see people going to sign up for different durations of the work week, people are going to sign up for different durations of when their workday is. And not just traders on the West coast that have to always get up at 4:00 o'clock in the morning. The people are going to say, “I work 4 days a week and I work
6 AM to 4 PM, 4 days a week and that's what I do.” And that's going to be fine. Not “this is the one year one week or COVID exception.” And that, some of that kind of flexibility will accommodate something issues we're talking about. But it's going to take more than that. It's going to take the ability of employees to take advantage of the scale and vetting that employee, big employers can provide. And it could take big employers get more serious about buying these services, with a clear-eyed economic logic, not because they're becoming social welfare agencies, with a clear-eyed economic logic to retain people in and sustain their productivity. Because when big companies start buying services then the unit cost of those services fall to the scale effect in all of a sudden the 100 million dollar company wouldn't think about having an onsite daycare facility is able to send its 20 worker’s kids on-site daycare facility because Bank of America has opened one in the Boston area to serve 50 branches, not just their headquarters. But to get utilization right there they've gone to a Bright Horizons, they've gone to a Kindercare, and say “We’ll give you the base load capacity to justify a facility to make it profitable—you go sign up some other customers.” And then all of a sudden, you’re getting that expansion of capacity which creates competition, creates differentiated products, and very importantly, the care domain will create a higher professionalization of the work. So that you've got qualified people are getting trained, not just in the very basics, for example of being a home health care aid, but have certificates or degrees in that have the ability to do some early diagnosis on their own. As well as understand nutrition, understand physical therapy, (basics not having degrees), so that the entire experience is self-reinforcing higher impact and better for society.
Kayla: I think there's a lot of opportunity come from this crisis especially in the care space and I'll finish with this question- beyond partnerships, and you know having a higher qualified workforce - What other areas or trends in the future of work, specifically related to care, do you think of the most opportunity to innovate and evolve going forward?
Professor Fuller: Well I think we’re, for a long time we've been talking about intelligent devices. I think we're going to see a significant surge there, whether it's taken any one of the digital assistants like Alexa or Siri. I believe that they're going to sort that basic technology is going to start drifting into the space using AI. So that, we already for example, in customer service settings, their number software programs are used to analyze your voice. And it actually originated in the intelligence community that those technologies. But now they can tell if you're on the phone in your showing the vocal attributes somebody is angry or somebody is confused. So, if you want to talk to a live person in if you got a platinum card get on and start just play acting like you're angry it'll default to a Rep right away. I think that we have the same type of thing in, with remote care that will lead maybe to automated dispatch of work or automated notifications. That, imagine, that my parent’s daily medication trays got a sensor in it and it alerts me if this morning's drug has not been taken. I think we're going to find lots of technologies that are helpful in lengthening people's ability to engage cognitively at a high level. Whether it's learning or gamification, things like that. I think we're going to get, something I'm very keen on, and if I were a younger person, I might quit being a schoolteacher and be an entrepreneur like ar you Kayla. But I think that we're going to start seeing much more, what I'm going to talk about is group buying. I’m not talking about Groupon, buy Groupon I mean by that the most popular street name in the United States is Park Street. So, Park Street, Park Ave that's number one across all American communities. And on Park Streets all around the country, in certain zip codes which skew older, I think you'll see that the 10 of the 14 houses on Park Street will collectively by a highly qualified home health aide and that might be reimbursed by their health Plan. Because the health plan doesn't want you to go to the hospital, they don't want you to fall and break your hip. So well trained home health aide walks in first time she's serving or he's serving the Park Street in anywhere USA purchasing group and walks in and says “Gee we going to get rid of this throw rug or we're going to put a rubberized mat under it,” “oh gosh you know we think maybe getting a tub installed with a door as opposed to stepping over is appropriate and we can arrange that to be installed and we can arrange financing for it or your insurer will reimburse the firms $500 if you do that.” And everybody wins - better quality of life for the people. But the trick is being able to do collectively, because the way insurance is issued in United States is so fragmented that they can't, a health insurance company can't, it's why home health care workers make so little now, in part because if you can only get the three sites in a day because you don't have a car you're taking buses and you're walking and whatnot - you're not, your value out of this constraint and therefore you make a very low wage. If I can see covered 24 lives every day, all of a sudden, I'm worth $70,000 a year. If I can only cover 6 lives every day, I'm working $31,000 a year. So I think we're going to see, with the graying population, with work from home, with COVID with the Epidemiology we see, and all sorts of chronic illnesses, it's going to be great period to be an entrepreneur in this space and I hope we can get some more energy behind it and get more liquidity in the market. Because if that liquidity shows up, I think great things are going to happen and the quality of life for a lot of people is going to improve.
Kayla: Well I hope so because this is that I'm dedicating every day to, so I hope that there's other people doing it as well. I actually think that there's a lot of hope and a lot of opportunity that's going to come, that's already come and going to come more from the pandemic. So, I appreciate your time, thank you so much. I found your insights extremely helpful as I navigate forward with bundle and just for everyone in general. So, thank you for sharing your thoughts on all these very interesting situations going on right now.
Professor Fuller: Kayla my pleasure and stick with it. I think you're in the right place right time
Kayla: Thank you