The Rising Influence of Employees in the Workforce
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Hey everyone! With December here, it’s time to bring on the Christmas cheer (but I’m not a rapper). I don’t know about y’all, but I’ve had Christmas music blaring every time I’m in the car, working out, walking in the Nashville cold, etc. and I could not be happier. Specifically, I’ve made sure to listen to the single greatest Christmas song known to man as the first song every time:
After playing this incredible song (which I think should be played year-round tbh), I proceed to play the second greatest Christmas song of all time:
I just delayed writing this blog by seven minutes and 28 seconds cause I had to listen to both of those songs again. Regardless of your musical Christmas opinions, I hope you take the time to celebrate the holiday season, whether it is Christmas, Hanukkah, etc. cause it’s truly one of the best times of year to spend with your friends and family. Ok, enough stalling, let’s grab our sleds and slide into this blog!
The Closing of Open AI…Almost
If you’re someone who keeps up with tech Twitter, or tech news in general, you surely would remember the huge commotion that happened a few weeks ago, when the world’s glorious tech Prince Sam Altman was ousted as CEO of the hottest startup in the 2020s: Open AI. This came as a complete shock to the tech world since Altman led OpenAI from a company known by only those in the AI realm to a global phenomenon that had arguably the most successful product launch of all time.
Tech Twitter (or X now?) was frantic, with founders, VCs, tech bros, media companies, and more blasting out tweet after tweet looking to grab a hold of the engagement while it lasted. However, although all of these Twitter personalities spent time speculating what caused the Open AI board to make such a decision, one segment of people was quiet: The Open AI board itself, who never provided a clear reason as to why Sam was fired in the first place.
As the situation developed and it was announced that Sam would be joining Microsoft, over 95% of the Open AI staff signed a petition saying that they would quit unless two conditions were met:
Sam was reinstated as Open AI CEO
The Open AI board was fired
Following this petition, employees and Sam Altman proceeded to unleash a very sweet “team togetherness” message that the All In Podcast correctly identified as a coordinated, public attack against the board.
As a result of this demand by the employees at Open AI (many of whom were hoping to cash out on equity with a tender offer, which is still on thankfully), the board met both of these demands and reinstated Sam as CEO of the company and established a new initial board of Bret Taylor, Larry Summers, and Adam D’Angelo.
The Power Pendulum Swings
While the Open AI saga has been newsworthy lately, employees taking the bull by the horns (the bull being the company they work for) is not anything new. In fact, it has been quite a common occurrence recently of employees beginning to have more and more power to significantly affect their employers. To name a few off the top of my head, you have:
The Writers Guild of America strike pausing all of Hollywood production for multiple months
United Auto Workers strike slowing down car manufacturing
Tucker Carlson took a large audience from Fox after his firing, causing Fox’s stock to lose $800m in value
NBA superstars utilize their power to force trades, refuse to play, and more
UPS workers threatening to strike unless new contract demands were met (this one produced the best memes IMO)
While some of these examples may not feel like they apply most directly to your white-collar job (which I’m assuming most of my readers have. LMK if I’m wrong though), take a step back and try to analyze the little things your company is offering now that they wouldn't have a decade ago. For example, I know many people who work (or did work…shoutout to my Robinhood friend) in IB who consistently had WFH Fridays, which I imagine would’ve been laughable for most analysts pre-COVID (not a stated fact here, but I imagine it so).
As another proof point of employee empowerment, it’s become much more common to job hop (aka, switching jobs frequently) now than ever before. I’m sure you’ve heard of or seen firsthand the career world your parents lived in where working for a company for decades was common (and even somewhat expected) and how that differs from today, but just to back it up with some cold hard stats, a report from LinkedIn found that roughly 70% of millennials and Gen Z plan to leave their jobs at some point.
Now…there’s much more I could get into here, but I don’t want to bore you with more and more paragraphs simply leading up to the final point of the blog. So instead, I’ll just get straight to the question that will set up the final section of this blog post: What are the implications for employees wielding more power?
What Now?
The immediate implications, some of which I’ve already mentioned, are that employees will continue to have more negotiating power with their employers for things such as salaries, benefits, working conditions, and more. Additionally, in a post-COVID world where working from home has become more of a norm, more and more companies will most likely continue hybrid practices that they’ve come to adopt given the preference people have for work flexibility or possibly even move to a fully remote team like both Coinbase and a16z have.
However, whenever you look at the implications of something, it’s always good to analyze not just the direct effects, but also the effects that those effects may cause (i.e. second-order effects, third-order effects, etc.). You’d be surprised how many people don’t consider this, especially on much more important topics besides this blog. For instance, Israel currently has no plan for Gaza after the war ends, and the US decided to aid in this endeavor by assigning this deed to our most brilliant and loved politician, Kamala Harris (joke for those who can’t see my sarcasm over text).
Sorry for the side note, but looking at the second-order effects, Let’s first take the heightened negotiating power that employees bring to the table. Since employees are incentivized to want to make more money, this will drive operational costs up for many companies. On the flip side, this will be a negative incentive for their employers as now the company is making less money overall, and will thus look to eventually implement more automation and/or AI that can replace some of the employees. To potentially avoid significantly increasing salaries, employers may instead decide to offer more (and possibly different) benefits to their employees, such as more PTO, maternity leave, or possibly even a 4-day work week which there are currently trials underway.
The further you go, the more potential long-term effects of employee empowerment arise, such as changes in education to train for jobs that are automation or AI-proof, a talent migration out of cities with the freedom remote work offers, and new potential labor laws. The point is that the employee-employer relationship is changing, and I expect the pendulum to continue swinging in the employees’ direction for the time being. Soon, it may even be possible for the majority of people to do something as stupid as traveling the entire US over a year (who would do such a thing) while working their full-time jobs. I guess someone has to do it first.
Thanks for reading! The blog was kinda all over the place this week IMO, but I got it done regardless. Will be flying up to NYC next week, so will look to get the blog mostly done and dusted before then. Not sure what I’m writing about yet, but stay tuned ya filthy animals (it’s Christmas time, it plays).
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