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Tuesday, March 18, 2014

Gallup: The Truth About Telecommuting

I just read this sentence in a New York Times article on telecommuting: “We know that those who work at home tend to put in longer hours and are often more productive.”

What? Is that the writer’s scientific conclusion? To me, it looks more like a note someone sends to his boss on why he isn’t coming in again today.

A lot of what I read about telecommuting assumes that it’s a good thing and that businesses should allow for more of it. The Times piece cites a survey by the Society for Human Resource Management that “found a greater increase in the number of companies planning to offer telecommuting in 2014 than those offering just about any other new benefit.”

We all hear lots of great anecdotes about productive people working at home in their pajamas or increasing their company’s performance over a latte at the local Starbucks. What’s missing here are data. So I asked Gallup’s best workplace scientists what they could find on telecommuting in our U.S. employee engagement database, which is the largest of its kind. The resulting discoveries offer a mixed picture at best.

On the plus side, people who work remotely less than 20% of the time are the most likely to be engaged of all employees: 35% of those employees are engaged, compared with an average 30% engagement in the overall U.S. workforce.

But active disengagement rises as employees spend more time off-site. Among people who work remotely 20% to 50% of the time, 18% are actively disengaged. That number increases to 22% actively disengaged for employees who work remotely 51% to 99% of the time. And here’s a killer finding: People who spend all of their time working remotely are nearly twice as likely to be actively disengaged (23%) compared with those who telecommute less than 20% of the time (12% actively disengaged).

Pretty simple math here: Working remotely less than 20% of the time is very good for engagement, but doing so 100% of the time is very bad. That’s because actively disengaged employees aren’t just miserable, but they spread their misery among their colleagues. Remote employees may infect their colleagues via email and phone calls, rather than by roaming the halls, but don’t kid yourself: They’re still doing damage to your company.

Yet people who work away from the office less than 20% of the time are, by far, the least likely to be actively disengaged -- 12% vs. 18% for the U.S. workforce as a whole. Why is that?

My hunch is that people who can choose to work at home some of the time enjoy a culture of great workplace freedom -- one where productivity trumps punching a clock. But my other hunch is that, while people love the freedom, they also draw immeasurable energy and inspiration from human interactions in the workplace. They feed off of being around their colleagues. And while working at home has many positives, the downside is isolation -- no friends and no fun.

To many of us, sitting at our desks in our pajamas, going out for an extra-long workout, and then grabbing a really good coffee and logging on at Starbucks sounds like a pretty good work schedule. But when it comes to telecommuting, it’s possible to have too much of a good thing.

Tuesday, March 11, 2014

Washington: Deaf to the Will of the People

The founder of our company, Dr. George Gallup (1901-1984), was once named one of the top 100 most influential people in American history by The Atlantic magazine. The publication included him among George Washington, Thomas Jefferson, Abraham Lincoln, and many other luminaries. He made the list because he’s the pioneer of a critical part of democracy, modern public opinion polling.

Dr. Gallup had a simple mission: “If democracy is supposed to be based on the will of the people, someone should find out what that will is.”

His concern was this: If there isn’t a systematic way to gauge the biggest problems facing the American people, then we run the risk of having leaders on the wrong page, making the wrong assumptions, creating the wrong policies, and thus making the country worse off. Dr. Gallup understood that if what the American people want is different from what their leaders want, this could ruin our democracy, our country, and subsequently global human development.

His concern is as relevant today as it’s ever been. All we seem to hear from Washington leadership right now are debates over immigration, the minimum wage, the environment, and healthcare. That’s where our leaders are spending their precious time and energy. Yet we’re hearing nothing about strategies for creating badly needed new, good jobs -- which is exactly what the American people are most worried about.

Americans recently told Gallup that unemployment/jobs and the economy in general are the most important problems facing the country (43% of respondents combined). Healthcare -- which we seem to hear about all the time -- came in at 15%. Immigration, another issue that seems to consume the president and Congress, was way down on the list -- only 6% in the U.S. cited it as the country’s top problem. In an earlier poll, relatively few Americans mentioned raising minimum wage as the best way to fix the U.S. economy, and the environment didn’t even make the list.

We are exactly where Dr. Gallup feared we’d be. There’s a sprawling and alarming gap between the will of the people and the focus of their leadership. The will of the American people is to have a good job. I guess our leaders don’t know that.

Right now, 75% of Americans are dissatisfied with the way things are going in the country. Is anyone surprised?

Tuesday, March 4, 2014

Cities: Think Before You Vote

Years ago, I was watching a super-important college football game on TV between the Nebraska Cornhuskers and the Miami Hurricanes. My friends and I are insane Husker fans, and we were so tense, we could hardly breathe.

Suddenly, Miami scores -- and my wife cheers. She didn’t know it, but she was cheering for the enemy. We forgave her, because she really didn’t know which team was which. My wife doesn’t follow football, and way down deep, she secretly wishes they’d ban it, but she has come to accept the game as a necessary evil in an otherwise great society.

Here’s my question: Would you pick my wife to coach your favorite football team?

This question seems crazy given the story I just shared, but somehow, in the political arena, it’s not. We routinely elect people to city and state leadership who have very little knowledge of the job and who, in many cases, aren’t particularly fond of business and free enterprise -- the power behind our economy. Maybe they see business as a necessary evil in an otherwise great society. Whatever the case, they don’t understand or appreciate free enterprise any more than my wife understands or appreciates football.

Here’s one big example: New York City just said goodbye to one of the greatest mayors of any city in history, Michael Bloomberg. Using his decades of executive and hands-on business experience from building Bloomberg LP, Mayor Mike steered New York out of its post-9/11 panic and made it once again a world-class city: safe, welcoming to businesses and tourists, and economically and culturally thriving.

I’m not that familiar yet with his successor, Bill de Blasio. But I do know that the biggest operation he’d ever run prior to being elected mayor last fall was the city’s office of the public advocate -- which has just over a $2 million budget. The budget for the entire city: more than $70 billion. That’s a pretty big leap. And his campaign to run one of the greatest cities in the world was built around reducing income inequality, making the police more sensitive to local communities, and taxing people earning more than $500,000 a year to pay for universal pre-kindergarten. I don’t recall him saying much, if anything, in his campaign about keeping New York’s world-class economic engine roaring, building on the amazing success of his predecessor, or about creating more good jobs. In fact, he ran his campaign as the anti-Bloomberg.

I’m not picking on New York or de Blasio. The point is, when it comes to creating economic growth and good jobs for America, effective city leadership all around the country is essential. It trumps national leadership. For instance, Austin and Albany are both capital cities in big American states. Neither city is located by a port or a natural tourist attraction with beaches or mountains. They’re pretty much alike, except that Austin wins big and Albany loses big.

The difference, in my view, is that Austin has deeply caring, highly engaged business, political, and philanthropic leaders with policies, beliefs, and values about human nature that work. They understand the critical importance of building a thriving, growing economy -- one that welcomes business and creates a culture of entrepreneurship. Albany has the opposite, as I see it: leaders with policies and beliefs that discourage business and entrepreneurship, if not outright scare them away.

Great city leadership has never been so valuable and so desperately needed -- we need way more Austins and way fewer Albanys -- because on core economic metrics, America is failing. GDP grew only 1.9% in 2013, which was even worse than the 2.8% growth in 2012. And the percentage of U.S. adults with full-time jobs right now is 42% -- the lowest monthly average since Gallup started our Payroll to Population (P2P) metric in March of 2011.

Most deadly of all for long-term prospects, the total number of new business startups and business closures per year -- the birth and death rates of American companies -- have just crossed for the first time since the measurement began, according to the U.S. Census Bureau. (Here, I am referring to employer businesses, those with one or more employees.) Four hundred thousand new businesses are now being born annually nationwide, while 470,000 are dying annually -- we are at minus 70,000 business survival per year.

This matters because small businesses are the main source of new good jobs and new economic energy. Up to 50% of all jobs are in small businesses and approximately 65% of all new good jobs are created by them, according to the Small Business Administration. Without thriving small businesses, America’s economy and our standing in the world will fall into permanent decline.

To rebuild the American economy, shouldn’t we elect local leaders who love small businesspeople and their endeavors, rather than discount them? Shouldn’t we also elect leaders with at least some experience at managing something?

This isn’t a Democratic or Republican issue. Bloomberg was a Democrat for years, but for the sake of expediency, ran as both a Republican and as an independent. The newly elected Republican mayor of San Diego, Kevin Faulconer, won on a pro-business platform of government reform. And Colorado’s Democratic governor, John Hickenlooper, has been a dynamite entrepreneur. Thanks to his leadership for the past three years, Denver now has a world-class business culture.

No, this isn’t about partisanship -- it’s about electing local leaders who have experience and who understand and appreciate business.

Here’s a suggested rule for deciding which candidate should get your vote, regardless of your party affiliation: Considering that America will go broke if we don’t revive small business fast, if a candidate has never started a business, worked in a startup, or at least worked at a Holiday Inn or in any job where they had five to 10 people working for them, they are not qualified to lead your city or state.

Tuesday, February 25, 2014

The U.S. Economy: Kidding Ourselves

The White House keeps telling you that unemployment is going down (“It’s under 7%!”) and Wall Street wants you to think the economy is coming back (“The Dow just passed 16,000!”)

It’s time for a reality check. These two institutions want to persuade you that things are getting better -- spreading good news is great politically and drives up markets -- but they aren’t living in the world that you and I wake up to every day.

My simple point to readers is this: You can’t possibly believe the U.S. economy is in a sustainable recovery when:

Business deaths now outnumber business births. According to the U.S. Census Bureau, the total number of new business startups and business closures per year -- the birth and death rates of American companies -- have just crossed for the first time since the measurement began. Here, I am referring to employer businesses, those with one or more employees, the real engines of economic growth. Four hundred thousand new businesses are now being born annually nationwide, while 470,000 are dying annually nationwide.

Up to 2008, startups outpaced business failures by about 100,000 per year. But in the past six years, that number turned upside down. As you read this, we are at minus 70,000 in terms of business survival.

Small business is dying in this country, and this will have catastrophic consequences for our economy and way of life. Up to 50% of all jobs are in small businesses and approximately 65% of all new good jobs are created by them, according to the Small Business Administration. Without startups and growing small businesses, nothing will fix America’s economic energy, let alone create new good jobs.

What’s worse, the country’s leadership isn’t doing much to revive the entrepreneurial spirit of small businesspeople. More than half of U.S. small-business owners say healthcare costs (54%) and taxes on small businesses (53%) are hurting their operating environment "a lot," making these the top two concerns among eight issues tested in a Wells Fargo/Gallup Small Business survey. In such an environment, entrepreneurs wait. They draw their heads back in and take fewer risks, because they’re unsure of the future. That lack of confidence causes everything to stop -- especially good jobs and economic growth.

The federal government’s unemployment rate has little bearing on reality. Sure, unemployment “dropped” to 6.6% recently. Notice anyone in your neighborhood or at your workplace celebrating? It’s becoming common knowledge -- even to a lot of people who don’t follow this stuff closely -- that the official U.S. unemployment rate doesn’t count people who are so discouraged that they’ve quit looking for work. The rate doesn’t begin to reflect the suffering and depression of the more than 20 million Americans who are out of work or underemployed.

Let me put it this way: If the unemployment rate is really going down, then why did the issue become the new No. 1 problem facing Americans today? And why did Federal Reserve Chair Janet Yellen, in her first congressional testimony this month, say, “Those out of a job for more than six months continue to make up an unusually large fraction of the unemployed, and the number of people who are working part time but would prefer a full-time job remains very high”? She also said, “…the recovery in the labor market is far from complete. The unemployment rate is still well above levels that Federal Open Market Committee participants estimate is consistent with maximum sustainable employment.”

Americans aren’t looking for part-time, crappy jobs, and they aren’t looking for more free time to paint or read. They want the respect and dignity of a full-time, good job. The problem is, U.S. adults with full-time jobs as a percentage of the U.S. adult population right now is 42% -- the lowest monthly average since Gallup started our Payroll to Population (P2P) metric in March of 2011. 

GDP growth continues to fail expectations. Many economists, both left- and right-leaning, predicted U.S. GDP would grow 3% last year. It only grew 1.9%, which was even worse than the 2.8% growth in 2012 -- so the pie shrunk. Now we’re seeing predictions of 3% growth this year. Here is the big question: Based on what?

Seriously, what is driving the upbeat predictions this time? A technology boom we haven’t yet heard about? Automobile exports? Fracking? The return of manufacturing jobs? Millions of “shovel-ready” government projects?

Reality check: The three most important indicators to watch in gauging whether or not America will ever recover from the 2008 financial crash are: if business births begin to outnumber business deaths again, the steady growth of full-time jobs as a percent of the population (P2P), and significant GDP growth.

On all three indicators, America is failing this morning.

Thursday, January 23, 2014

Small Business Is Dying

Does anyone really take the official U.S. unemployment figure seriously? My bet is the monthly number, as reported by the Bureau of Labor Statistics, will no longer be trusted by media, economists, politicians, and investors -- not to mention the public.

We were recently told by the Labor Department that unemployment fell to 6.7% in December from 7% in November. But they also told us that the economy created only 74,000 new jobs in December, far below the 200,000 new jobs economists had expected.

The official unemployment rate is an inaccurate mess, because it doesn’t count people who have quit looking for work. And an unemployment rate of 6.7% is not only horribly misleading, but now a cruel misrepresentation of the millions of unemployed and underemployed Americans who are growing discouraged and feel emotionally destroyed.

We need new metrics real fast, and Gallup has developed one. It’s called Payroll-to-Population (P2P), and it’s a very clear metric with no messiness or complicated formulas. Gallup’s P2P simply represents the percent of adults in full-time jobs with a paycheck as a percentage of the total U.S. adult population. P2P answers the most pressing question of the day: What percent of American adults have a full-time job?

While the federal government touted an improved unemployment rate, Gallup’s P2P rate fell to 42.9% in December, from 43.7% in November. The current rate is the lowest Gallup has measured since March 2011.

I’m not optimistic that this number is going to substantially improve anytime soon -- not until the country’s leadership understands the severity of our jobs problem and understands the source of true, organic job creation -- which is new business startups.

On that front, the news is deadly. According to the U.S. Census Bureau, the total number of new business startups and business closures per year -- the birth and death rates of American companies -- have just crossed for the first time since the measurement began. Here, I am referring to employer businesses, those with one or more employees, the real engines of economic growth. Four hundred thousand new businesses are now being born annually nationwide, while 470,000 are dying annually nationwide.

The deaths of businesses now outnumber the births of businesses.

Up to 2008, startups outpaced business failures by about 100,000 per year. But in the past six years, that number turned upside down. As you read this, we are at minus 70,000 in terms of business survival. (The data are very slow coming out of the U.S. Census Bureau, via the Small Business Administration, so it lags real time by two years.)

The real job market, with organically created jobs from the hearts and minds of American small- business people -- American entrepreneurs -- is now in critical condition. One could conclude that America’s free enterprise spirit is dying or, at best, is very sick.

Leaders should take new business startups and entrepreneurship very seriously: 50% of all jobs are in small businesses and approximately 65% of all new good jobs are created by them, according to the Small Business Administration. Gallup is sure taking this seriously. We just launched our Entrepreneurial StrengthsFinder assessment, which aims to help America -- and the world -- find and develop our best and most talented business builders.

American leadership has a clear choice here. It can continue to tout dishonest unemployment figures while coming up with no real solutions to the jobs crisis that now afflicts millions of Americans. Or it can base policies on honest employment figures and begin attacking the jobs problem by rekindling the country’s spirit -- the spirit of free enterprise.

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