Employees still have ‘the balance of power,’ Prudential vice chair says

Prudential Vice Chair Rob Falzon joins Yahoo Finance Live to discuss the findings from Prudential's pulse survey on the labor market, economy, and consumer behavior.

Video Transcript

- While employers who might be hoping the market shifts back in their favor may need to keep waiting a little bit longer, the great resignation still continues, that's according to results out from the Prudential Pulse survey series noting that half of workers are still actively looking or considering looking for a job. Joining us with more is Rob Falzon, Prudential vise chair.

It's good to catch up with you as always, Rob.

ROB FALZON: Morning.

- I know this survey was conducted sort of at the end of May, beginning of June. But nonetheless, it's a little surprising that we're still seeing these kinds of numbers, maybe less surprising now that we have Friday's jobs report under our belt as well. But this survey still seems consistent with a pretty strong job market.

ROB FALZON: Yeah, you know, I actually found it stunning in a way truly. If you look at the data over the last six plus months, 25% of the workforce has already moved. And so to have 50% continuing to look at a job change, that's 75% of the population that's sort of in motion over the last 12 months and looking forward.

So a big number and something we all have to pay attention to. And I think if think it's driven by the intersection of three things, Julie. First is long term financial insecurity and our survey shows that, that we did, that despite the gains over the last 2 and 1/2 years or so, people are not in a very good position when it comes to their long term financial security.

The second is this ongoing desire to balance work and life and to find sort of meaningful and better career development opportunities. And then finally this disassociation that you and I have talked about before where the longer you're fully remote, the more-- the less you're attached to your company and your fellow employees and the more open you are to moving and going to other places.

- How long how long do you expect it to be able to be sustainable for employees to find that better opportunity elsewhere even as some companies are looking across their headcount and trying to make decisions around cost management? And will those positions still widely be available for people to have the power to level up in their skills, go to another position, and to your point as well, get a better paycheck?

ROB FALZON: Yeah, I think, Brad, that there's still a supply demand imbalance going on, right? So you have still the statistic of job openings. Depending on how you look at available labor force, it can be measured as there's a 2 to 1 ratio. So there is some time to run where I think employees are still going to balance of power with regard to career optionality.

I do think underlying that data is an important sort of subtext that people have to pay attention to employees, workers have to pay attention to, which is that increasingly, those job openings are going to be concentrated in areas where there are skills required to take those jobs. As we came out of the recession, there's a lot of service oriented jobs that don't require the level of skilling in order to be able to take those positions. But the skewing is going to go more toward those that require higher levels of skills, and workers are going to have to continue to invest in themselves that they've got those skills to make themselves relevant to the job openings that will be there.

- Rob, perhaps we can get a little philosophical here. Look, we've seen this broad shift from workers from working in an office during the pandemic now working from home, a lot of workers still working from home. But with concerns about layoffs, is now a good time for workers to be back in the office? Is it time that they have to show their face?

ROB FALZON: Well, you know, it's an interesting dynamic. I think, we as a company are going through this along with every other company which is we actually believe there's a benefit to bringing people back into the workplace, not simply to have them there, but rather They're elements of productivity that are enhanced when people come together through collaboration and ideation and sharing and the sort of things that don't happen as easily in a fully remote environment.

So we believe that people need to come into the office, not just to maintain their jobs, but actually to be more effective at the jobs that they're doing. Having said that, I think we want to be very careful that individuals have learned to operate in a fully remote environment and have benefited from that environment in terms of some of the personal flexibility that it provides. And they're going to want to return retain that flexibility.

So I think there's a middle ground here, Brian. We're very much in favor of this hybrid work environment going forward. It's a difficult thing to put into effect. But it's worth it if you can get it right because then you can take the best of what existed from a fully in place-- in office environment before the pandemic with what we learned from a fully remote during the pandemic and combine those two in a way that I think you can enhance productivity along with enhancing the quality of work life for individuals.

- Rob, the survey also digs into some subsectors, right, including gender, right? It looks at women's financial position versus men's financial position. And there's still a depressing gap here despite-- or maybe because of the pandemic making it a bit worse as women had to stay home because of childcare, et cetera.

But if you look at the differentials in things like whether they have an employee-- and emergency savings fund, whether they I have an employer sponsored retirement plan, actually, we're seeing the men outrank women in all of these categories.

ROB FALZON: Yeah, Julie, that's sort of another stunning statistic coming out. I mean, the gap is not small. Right? It was like a 10 point gap in almost all of the metrics that we surveyed around financial security or insecurity. And so clearly the divide with regard to men and women didn't close as a result of either the pandemic or even coming out of-- you know, where we are in 2 and 1/2 years after. The onset of the pandemic it widened.

I think interestingly, Julie, as I think about this, there's a tremendous opportunity here for employers that can get this right. This is how we're sort of thinking about it, which is there's a real need here. And if you can create the right environment for women and incidentally I think some interesting statistics coming about millennials from the report as well, you can create the right environment that creates both skilling, job opportunities and the right form of compensation and benefit packages together.

I think there's a real opportunity to attract talent-- to retain and attract talent into your workplace, which will make you more competitive in the long run. So it's a discouraging statistic. But there's an opportunity in there in helping to correct that, which I think can make companies more competitive in the marketplace.

- Got to ask further about millennials as well, as I find myself a part of that group here. And you did a deeper dive on this generation particularly in how beginning the careers in the wake of the Great Recession and additionally new challenges during the COVID pandemic during peak earnings years that we would be entering into or be at. That's certainly been a hindrance to being able to have the necessary savings for other kind of life goals. And so we just keep having to put these things off. How much more of an impact do you see that having not just in the employer-employee relationship, but even in the way that we engage kind of in society going forward too?

ROB FALZON: Yeah. Yeah. So generational differences, Brad. I've got three adult children, your age. So they are three millennials. I see this firsthand from their experience as well. And you know, I call it the bruised and battered generation because just to your point, came into the workplace in the aftermath of the financial crisis. So this idea of the social contract of if I work really hard, I get a good education, I'll get a good job, a good career, I can earn, save. You know, that was all dislocated for them, and many were challenged finding jobs, never mind finding jobs with satisfying careers.

And then as they're now entering the point of sort of peak earnings and savings and purchasing homes where they're finding a pandemic, dislocation, and the very real potential for a recession. You know, we're already seen a softened economy whether we call it recession or not.

And I think it's absolutely affected the behavior of millennials not just from a career standpoint, but also from an investing standpoint, kind of what you were referring to, I think, Brad. It's-- You have this phrase desperate times require desperate means. The behavior from an investing standpoint by that generation, and even more broadly we're finding it but particularly in that generation, is they're taking on more risk. So a much lower utilization of financial advisors across the survey, so not just millennials but across the survey but more acute, the millennials.

Own as much in crypto-- as many own crypto has owned mutual funds. And so there's a-- well, the gap is so large, they need to really onboard quite a bit of risk in order to be able to have any potential for closing that gap. I don't think that's a healthy underlying dynamic.

- Always great to get some time with you. Rob Falzon, Prudential vise chair. Have a great rest of the week.

ROB FALZON: Thank you.