Despite the start of a new year, a lot of business problems haven’t changed. When 2022 was winding down, a government report on workplace issues ended the year with a dire observation by noting a majority of Canadian employers were not just struggling to recruit new employees—they were also fighting turnover. A year ago, Statistics Canada reported managers were hoping to improve retention by throwing money at the problem (53.3 per cent expected to increase wages while 14.5 per cent planned to increase benefits). But recruiting and retention issues continued to haunt employers in 2023, when, according to a survey conducted last summer by Robert Half Canada Inc., 41 per cent of Canadian workers expected to seek a new job before the end of the year, with 26 per cent looking for better remote options amid the employee recall trend that is contributing to workplace turnover.

As we enter 2024, these issues are well known to most employers. But if they think fighting for talent while getting employees to return to the office is the biggest challenge they’ll face this decade, then they likely haven’t heard Steve Cadigan speak about the future of work or read his book Workquake.

When it comes to talent management, Cadigan is one of the world’s most respected thought leaders. Before launching Silicon Valley-based Cadigan Talent Ventures—which works with leading venture capital and consulting firms and advises organizations ranging from Google, Cisco, and Intel to the Royal Bank of Scotland, Manchester United Football Club, Salesforce, and the BBC—he worked as an HR executive for over 25 years. From 2009 through 2012, he capped his career as the first CHRO at LinkedIn, where he served on the executive team that grew the company from a private venture of 400 employees to a publicly traded global operation that was eventually acquired by Microsoft for US$26 billion.

Simply put, when Cadigan talks about workplace issues, smart people listen. And he argues that the traditional workplace model that emphasizes employee retention is no longer relevant in today’s disruptive world because the pace of technological change now makes the skills most employees have when recruited obsolete in less than five years. As result, relying on educational institutions to generate pipelines of talent that can keep employers competitive over the long term is no longer realistic, particularly in fields that depend on knowledge workers to drive the bottom line.

In this IBJ interview, Cadigan talks about why the fight for talent is likely just getting started and how technology isn’t the answer because the best path forward for all concerned is a total reengineering of the employee‒employer relationship so that turnover is seen as a good thing.

IBJ: Steve, the pandemic provided an unprecedented opportunity to rewrite the workplace compact to make it an honest relationship based upon realistic expectations, but that opportunity appears to be being squandered by organizations seeking a return to the pre-pandemic status quo. But before we get into all of that, let’s quickly talk about the current state of workplace location arrangements. Generally speaking, what percentage of workers are being recalled to an office and under what expectations?

Steve Cadigan: It is really hard to pin down the actual data on employee recalls, and the conditions vary. But in the past year we have clearly seen a wave of organizations that operated remotely during the pandemic wanting their people to come back. And if we look at LinkedIn data showing changes in the availability of remote positions, it suggests that a 50 per cent decline from the peak of remote work actually occurred many months ago.

IBJ: Is this surprising to you?

Steve Cadigan: No. I see several reasons for the retreat. The biggest is fear amongst senior executives who are unsure that they can create long-term value with their organizations operating in a dispersed framework. This is understandable because there is no real evidence that remote environments can be as successful as traditional working over an extended period. Concerns over negative impacts on culture and teamwork are also in play. I am constantly asked to identify what organizations are doing the best at the remote worker thing. And I simply don’t have an answer yet because we have no benchmark to tell us what to expect over a sustained period. That’s the uncomfortable reality. And with their butts on the line, senior management wants to return to an operating environment that makes them comfortable—an environment they know they can perform well within. Hopefully over time we will have some good examples to draw from that show there are some great benchmarks on creating value with teams in a more remote reality.

IBJ: And nobody’s got the cover of the pandemic for weak results anymore, right?

Steve Cadigan: That’s right. Throw in economic uncertainty, raging wars, technological disruption, not to mention an aging workforce and all the other things going on, and it isn’t surprising that there is little appetite for maintaining remote environments without solid examples showing they can be successful long term. That’s why senior executives are calling people back. In some jurisdictions, like San Francisco, where I live, this trend is being supported by municipal politicians desperate for working people to return to the city and support urban infrastructure along with downtown businesses that pay taxes. But there is still a labour shortage, and remote employees are not being shown hard proof that returning to the office will produce greater outcomes for them and the company. And so, we may see a forced reversion to more dispersed work if the supply of talent pushes back hard enough.

IBJ: Is that likely?

Steve Cadigan: I speak to a ton of management recruiters, and for a long time, they have been telling me the first question candidates ask when approached about a new job is, “Can I do this remotely?” That’s the first question, and it is not about the position’s industry or salary, it is about whether remote is an option. So, there is a strong interest in the capacity of employers to be much more flexible than they were prior to the pandemic. But there are many things in play and anyone who thinks they know how it will all turn out is kidding themselves.

IBJ: Do you think employees who are returning without a grumble are simply keeping quiet about their real feelings while looking around for better options?

Steve Cadigan: How employees are feeling is one of the cloudy things that organizations are going to have a hard time assessing because a lot is happening, and it is all variable. Remote work itself wasn’t something that impacted all employers equally. The experience has been different from organization to organization, not to mention across regions and industries, and so reaction to the pullback varies. It is really hard to get good data on Europe, but the stats I’ve seen suggest remote work isn’t as hot an issue there as it is in North America amongst knowledge workers. This might be partly due to worker protection legislation, but personal circumstances are also likely in play. An individual’s capacity to work remotely obviously influences demand for the option, and density of housing is a bit different overseas, where more folks just don’t have the extra space to sit down and do remote work, which was also a nightmare for many people in North America. Generational differences are also in play, with some in the younger demographic saying they want better access to the workplace community where they can build relationships, develop mentorships, and see a clearer career pathway. That said, a lot of the existing talent pool got a taste for something that they never had before by being able to work from home without a commute. This took place over a sustained period, and many workers were able to experience a fuller life by being home for things like when the kids get home from school. And for many people who never imagined being able to have this kind of life, going back to the office isn’t attractive.

IBJ: So, while the pullback by employers who opened up to remote seems to be happening to some degree pretty much across the board—with the only clearly identifiable difference depending on how politicians or regulators are influencing the recall process—how employees are feeling is hard to untangle, or find data around, because there is significant nuance, right?

Steve Cadigan: Right. But one thing that the laws of human biology tell us is that existing in a different state for a prolonged period creates a different perspective on life and that leads to different choices. And that is partly why we’re having two conversations. Generally speaking, company managers are saying that we are more productive when we are working together, and some employees are saying that they are more productive working from home. Employers are thinking about the bottom line while employees who value remote work options now see productivity to include being home for family and having time to do personal errands and chores. This desire for a more meaningful existence was driven by the pandemic and contributes to the turnover that employers are experiencing. But that turnover isn’t a result of this one issue. If you look deeper, we can see that people are also making different choices as a result of living in a prolonged state of uncertainty that started before the pandemic. So, when executives say to me, “Steve, people are quitting,” I tell them: “Yeah, but it is because you’re scaring the crap out of them by talking about the need for new skills.” Companies constantly talk about the need for skills as an operational issue, and they do it coldly when employees see it as a threat to their well-being, and that’s a big part of the major mess we are in.

IBJ: So, fear is a big driver of turnover, right?

Steve Cadigan: Yes. When we talk about the future of work, we are running what I call the worst marketing campaign in history. People are constantly being told AI and software robots are coming for their jobs, so they are scared. But nobody can really tell them what skills will give them security in the future, and even if these skills were obvious, employers are not built to deliver them. As a result, employees are not just leaving jobs, they are switching careers hoping to find the new skills everyone says they need to have a secure life, or they are giving up. This fear was driving turnover before the pandemic, and it also helps explain what is happening in higher education. High school students are rejecting more education in growing numbers and university students are switching majors like never before. And these waves of disruption in the university pool are impacting formerly reliable talent pipelines. That’s got HR people on their heels. In an attempt to battle a deficiency of people interested in studying accounting, for example, firms have actually started marketing the profession. That wasn’t necessary before. Nobody, not academics or economists, has a really good handle on why people are making the decisions they are making. But it is a Black Swan moment, and all the shifting in macro-level stuff that started before the pandemic will continue to hit us hard until we realize we have a much bigger issue than where people are going to work—it is lack of what I call learning velocity in the workplace.

IBJ: The full title of your book is Workquake: Embracing the Aftershocks of COVID-19 to Create a Better Model of Working. And the pandemic clearly created an opportunity to change how we look at work because disruption always opens the door for change. But you also note that Einstein stated, “You can’t use an old map to explore a new world.” And that seems to be what business managers are trying to do by focusing on returning to the pre-pandemic working world. Is that the problem as you see it?

Steve Cadigan: It is worse than that. Amid all the uncertainty about the future of work, consulting companies are selling digital transformation as the answer. And when it comes to the big issue I describe in my book, technology isn’t the issue or the answer.

IBJ: Okay, so let’s talk about Workquake. Your book is based upon an epiphany you had while leaving Electronic Arts for LinkedIn. Simply put, after you started exploring an exciting new opportunity and your boss found out, you felt bad about not wanting to stick around despite the fact that the EA job that you signed on to do had changed dramatically as a result of changing market conditions. You should have been excited about chasing what proved to be your opportunity of a lifetime, but you were bummed out. You knew your boss was going to take heat for losing you because turnover is considered a sign of failure, especially when it involves key players. This got you thinking about the unrealistic nature of expectations that the current model of work puts in place. You started imagining a world in which you and your boss felt good about you moving on. And this led you to realize just how dysfunctional the current nature of employee‒employer relationships have become because they are built on hollow declarations of long-term commitments, which still influence HR practices despite no longer being realistic. Right?

Steve Cadigan: That’s right. I think the workplace relationship is broken. But I’m not pointing a finger at employers. As an HR professional with 35 years of recruiting experience, I was part of the problem, which isn’t anyone’s fault. Things have changed so much over the past few decades that we now have what I call a serious architecture issue.

IBJ: Can you elaborate for people unfamiliar with your book?

Steve Cadigan: Sure. The current model of work is generally designed with the expectation that employees get educated and then find a job that has them basically do the same thing for a long period of time. In other words, organizations essentially hire people for existing skills that are supposed to enable them to contribute to the bottom line over the course of their career while they marginally learn some new things along the way. This doesn’t work anymore because today’s jobs are often outdated the day most people start doing them. Many are outdated the minute a job description is written. And if you don’t see that as an employer, you’re blind to what is happening. Turnover, as we discussed earlier, has been on the rise for years because people are scared to stick around in jobs that are not really helping them become more employable. This has reduced loyalty to employers, which is no longer supported by long-term financial security in the form of decent defined pensions.

IBJ: So, you are saying the new loyalty is to self-preservation and perhaps quality of life for employees that embraced remote work, right?

Steve Cadigan: Yes.

IBJ: So, what’s the answer?

Steve Cadigan: Well, I’ve talked to so many executives around the world about this issue, and it seems obvious to me that we are not at the implement-a-solution phase. We are still at the need-to-acknowledge-we-have-a-problem phase. But the workplace has indeed experienced a radical transformation over the past 30 years, and we have to face the new reality in which we have both a massive skills gap and the most fluid and disengaged workforce in history. In this environment, for reasons that make no sense, we are still running with a workplace architecture that was built to hire talent and apply it, not grow it at the rate of change that we now need. And since we can no longer expect educational institutions to produce a talent pool that meets our short-term or long-term needs, while workers crave development, I think the answer involves reengineering the workplace to be a place where people are constantly learning new skills that increase their employability while being paid to contribute to the bottom line.

IBJ: What does this mean for employers?

Steve Cadigan: It means they need to accept reality and build for instability. I know of a fast-food outlet that actually posted a sign essentially saying that because they cannot recruit and retain staff, they must charge customers more money. This isn’t taking ownership of the issue; it’s a surrender to the problem and attempt to pass it off to the consumer. Instead of giving up and trying to maintain a broken business model, it is time to change. And that means figuring out how to attract workers by being more adaptable when it comes to issuing individual work duties, constantly mixing in new projects, assignments, challenges, rotations, et cetera.Sell them on how you will help them find a better job by making them agile and adaptable.

IBJ: Paradoxically, you are arguing that companies currently worried about turnover need to become comfortable building a culture that grooms people to leave. Is embracing turnover an easy sell when you talk to organizations that see employee retention as key to trust, predictable outcomes, and success?

Steve Cadigan: Well, as I mentioned earlier, we are still at the need-to-acknowledge-we-have-a-problem phase. And I am not saying reengineering work in a way that works for both employers and employees will be easy, especially given the complacency that exists. But something has to change because job stability and loyalty to a company are yesterday’s virtues. That’s the big meta theme in my book. And reengineering work to generate adaptable employees isn’t as scary as it sounds.

IBJ: But what is the logic behind embracing turnover? Why not just focus on building employee adaptability to fight it?

Steve Cadigan: Turnover is going to happen whether you embrace it or not. And it isn’t a millennial attitude thing. The world has changed a lot since my generation found jobs in newspaper ads or at job fairs. If we had smartphones that could tell me about a hundred different ways to use my history degree, while also informing me about everything from corporate cultures and leadership styles to the selling patterns of executive teams, then my generation would have looked at work as a buffet table of choice and explored our options like the younger generations. But whether people accept this or not, turnover is here to stay, and most managers know this even if they don’t want to admit it. When I am talking to executives who complain about not being able to hire people with the skills they need fast enough while watching new hires leave earlier than ever before, I ask them if this is a new problem or one that has been going on for at least the last five years. Then I ask them if they really think the trend is going to change, and they say, “No.” That’s when I ask them why they are playing defence if they don’t expect people to start staying in jobs longer down the road. Focusing on improving a reward system designed to motivate people to stay longer when you don’t think it will work makes no sense.

IBJ: When you talk about playing defence, you’re essentially saying offering more money, more vacation, more benefits, and in some cases remote options, right?

Steve Cadigan: Right, and this isn’t just unsustainable in many cases—it won’t solve the bigger issue, so I tell people to think about why they are not playing offence instead. If you know your people are going to leave faster, why not celebrate that trend and support it as means to attract talent who will appreciate what you have done for them after they leave? This is where heads start to spin, because most companies don’t extract value out of alumni networks. They subscribe to the Tony Soprano school of HR, which says if you quit, you’re dead to me. And that makes no sense when the work is fluid like never before. Thanks to employee turnover, companies have more alumni than ever before, so why not fix the broken workplace architecture by building lifelong relationships that generate value for all concerned?

IBJ: So, you are essentially saying companies should strive to set the standard for making their employees employable in the age of disruption, making them attractive to other employers. How do you drive this point home to people who fear turnover or see it as a sign of failure?

Steve Cadigan: I love to ask business leaders to name the most valuable car company in the world. Everyone knows it isn’t the one that’s been around the longest with more than a century of business excellence. It is Tesla, the one that arrived in just the last few decades. And the average tenure of Tesla employees is around two years while the average tenure at all of its competitors—companies with greater market share that have been proving themselves for many decades—is around five years. So why does the market value Tesla above them all? It isn’t because of the boss with three part-time jobs. Tesla is highly valued because it can innovate despite its lower tenure. So, as I tell my clients, maybe we should all stop worrying so much about people leaving and recognize that there just might be a competitive advantage to be gained by bringing on new people with new ideas more frequently. There are even economic benefits to turnover. Think about the business model of top management consulting firms, which tells talent to “come here and then leave for a better paying job.” I’ve done a lot of work with these firms, and they’ve got people who have been around a long time, but the majority are there for short gigs, two or maybe three years, and these gigs launch careers by providing a great learning experience across different industries, sectors, cultures, and management styles. And when people leave for greater opportunities, they are replaced with cheaper talent while the firm charges clients the same. It’s a wonderful business model that other companies should emulate. Meanwhile, as we just discussed, employees who grow at your company and then leave become part of a network of alumni that can add tremendous value if you tap it as a resource.

IBJ: But what about the steady stream of lost operational expertise?

Steve Cadigan: Companies can function while constantly moving people around into new positions. While I was at LinkedIn, the average tenure of employees the whole time was nine months because we doubled and doubled and doubled. And when you double revenue and double employee populations so hard, you’re constantly putting people in roles they’ve never done before on a significant scale. Maybe a lot of executives fear this is a recipe for disaster, not reliable, consistent, predictable results. But Microsoft bought LinkedIn for US$26 billion because of the value it generated while operating this way for years. When you think about it, moving people around is actually the ultimate insurance for turnover. When somebody leaves, the more employees know about each other’s jobs, the easier it is to maintain operations until a new hire arrives. And in the digital age, there are ways to move people around efficiently. I know of one company that uses artificial intelligence to map the experience, capabilities, and qualifications of every one of their employees to every job in the company. This gives HR a high level of understanding of how everyone on staff would perform in other positions across the organization as well as an understanding of how to strategically deploy training and leadership development. This makes perfect sense given today’s technology and the information that is available from CVs, LinkedIn profiles, and performance reviews. But people are still typically hired by managers who operate in silos that don’t work together to map employee skills and potential, which is why many companies think they have a recruiting problem when they actually already employ a possible solution and just don’t know about it.

IBJ: Okay, so what is your advice for managers?

Steve Cadigan: Stop talking about the future of work in ways that are so inhuman. The term digital transformation doesn’t generate warm and fuzzy feelings like an image of a golden retriever puppy. It is cold and the focus on efficiencies scares people, who we still actually need despite all the hype around AI.

IBJ: Some people think that might change.

Steve Cadigan: I had a really interesting experience in a board meeting recently. We were trying to help the management team build an employee value proposition. Why come to this company? Why stay here? With the infinite ocean of choice out there, we knew that we had to be really clear. We did some brainstorming and took notes for a team to take away and work with. But while we were discussing ideas, I had opened up ChatGPT and dumped everything in before the chairman ended the meeting. I told the app: “You’re an expert on branding, marketing, and PR. Build a value proposition using these words.” The result was brilliant, and we all had a “whoa” moment. But it was still just a shortcut, which is why I tell my kids not to worry about AI. Just focus on having the capacity to communicate and express yourself while maintaining curiosity and a growth mindset. A robot isn’t going to compete with you on that front, which is why digital transformation should be seen as a tool to augment human workers, not replace them. And since we are still going to need human workers, it just makes sense to be more welcoming when talking about the future of work, which in many ways will actually be more interesting and more impactful while offering greater satisfaction and more balance. And while we are being more welcoming, let’s be more honest about the joint challenges we face. Amid all the options and uncertainty out there, today’s workers are loyal to learning because they crave employability, so let’s stop expecting loyalty. And instead of offering false promises of job security in positions that everybody knows could get disrupted tomorrow, let’s offer employees the skills and abilities required to land greater opportunities or deal with career disruptions. Do that and you’ll see them come back for more. Rehires will tell you a lot more than any employee engagement study, which is such a useless measurement when the things that impact it are out of your control.

IBJ: What do you think corporate boards should be doing to ensure their organizations can successfully transition to the new model of work that you propose?

Steve Cadigan: Well, we need boards to think differently if we want to get to the implement-a-solution phase. A board’s job is delivering reliable, predictable, and consistent results. But to survive the workquake, they need to lead the charge when it comes to embracing turnover. And that means learning from Silicon Valley. It’s definitely not a perfect world, but there is more innovation and creativity here than anywhere in the world and it is accomplished with high turnover.

IBJ: What does the reengineered work world as you see it mean for employees?

Steve Cadigan: They need to be willing to experiment. Employers and employees share a challenge right now. It is like we are driving a car built for a smooth road but have collectively found ourselves in a jungle without a clear path. Everyone is miserable in this outdated vehicle, so we need to find a new one that provides a more satisfying and inspiring future for work. But the new vehicle will be significantly different, and a lot of employees and employers alike will need to become comfortable getting from point A to point B differently, which is scary.

IBJ: Surviving an earthquake takes luck, but preparation helps. So, what specifically can workers do to prepare themselves to navigate the workquake you describe?

Steve Cadigan: Survival will be easier for people who embrace learning and place a higher value on it than job security. They need to act like entrepreneurs selling agility and adaptability while being open to changing jobs whenever something different presents an opportunity to upgrade skills and knowledge across different industries and business models. This means constantly looking around.

IBJ: Is it too early for people seeking work to be honest about where their loyalties really lie during a job interview?

Steve Cadigan: Good question, and the answer depends on the company. I know a firm that begins its interviews by asking, “Where do you want to be when you leave the company?” I think that’s a really healthy way to get to know a potential employee and set the groundwork for a mutually beneficial relationship. So, in this situation, honesty about what you want from a job wouldn’t necessarily work against you. Honesty is part of the solution. But as I noted earlier, a lot of companies still look for people who say they expect to stay a long time. So, in many cases, honesty about loyalties should probably wait until we get past the acknowledge-we-have-a-problem phase.

IBJ: Okay, so last question. How do you think business schools should evolve to add value to this brave new world of embracing high turnover? Do you think more executive ed programs that focus on lifelong learning and teach things like how to be coached is part of the solution?

Steve Cadigan: I have to say that I have a great deal of empathy for business schools who are doing their best to keep up with a landscape of work that is changing faster than we have ever seen it change. My suggestion for business schools is to help confront the reality that the need for new skills is continuing to accelerate for all businesses and organizations. Therefore, I hope that business schools can evolve to be a resource for students for their entire working journey—not just when they are enrolled. I also hope the schools can really grow their alumni networks and make them powerful learning centres for former students to share and help one another. Secondly, I think AI is forcing all of us to think differently about what knowledge and learning are important in a reality where knowledge is increasingly becoming a commodity—easily acquired. We all will need to reframe how we differentiate ourselves and add value in a world where AI will increasingly be capable of doing more and more of the work we have been doing. Lastly, I think mastering change is a super powerful skill that all schools should be teaching their students today and in the future.