File this among the long and growing list of unexpected workforce consequences of the Novel Coronavirus pandemic: a predicted wave of layoffs for white collar, $100,000/year employees. Where is this prediction coming from? Is it plausible? What does it suggest about the future of workforce management?
First the background. Yahoo Finance correspondent Julia LaRoche spoke with billionaire bond investor, Jeffrey Gundlach for this article she published. Gundlach, CEO of DoubleLine Capital, a $135 billion investment company suggests there could be a wave of higher end unemployment following the tsunami of new unemployment claims among the lower-income echelons of the American workforce.
Gundlach’s theory posits that the wholesale migration of white collar, managerial-level work to remote or work-from-home arrangements has the unintended consequence of revealing where the actual productivity lies within the broader workforce. The result has provided a clarifying view into which workers are producing and those who are not. Within his own company, Gundlach notes that some of the more highly paid workers have not been as responsive while more junior elements of the workforce have stepped up and shown their mettle. The stark comparison, Gundlach thinks, may provide the impetus for organizations to cut fat/dead weight from their middle to upward ranks.
Beyond the anecdotal evidence, Gundlach also offers a more measurable causation for the possible downsizing of higher-salaried employees. Citing deflationary pressures on wages, high unemployment may force professionals to accept lower pay if they’re to find any work at all amidst record numbers of job seekers. The wider and probably long-term embrace of remote work also has a deflationary effect too as skilled labor can be sourced at lower rates in lower-cost markets. An employer can hire a tech executive in Huntsville, AL for a good deal less than the same resource in New York City. This dynamic could potentially drive overall compensation lower for white collar roles.
Add to the uncertainty and shifting landscape, the existing trend of leveraging contractors to fill executive and professional roles. If white collar positions are pared from the full-time workforce, it stands to reason that contract workers with these skill sets may see increased utilization on a more strategic level. So perhaps add to Gundlach’s prediction, the notion that this shift will also foster an increase in contractor utilization for professional roles.
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