Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside my co host Matt Miller.
Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moving news.
Find the Bloomberg Markets podcast called Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. This has been a week with so much going on again with the central bankers, but better to bring in I know exactly in the last couple of weeks has really been a lot of economic data as well here which has been very influential for the Fed. We want to bring on our next guest, Claudia Sam, founder and
independent economist at Some Consulting. Claudia, thanks so much for joining us here again, a lot of economic data for this market to digest. What for you are you focusing on right now?
Well, obviously the game in town is inflation, the consumer inflation, and we really got by getting the consumer inflation and the next day the producer inflation.
You had kind of a signal between the two.
But we still see a lot of disinflation in the pipeline.
It's just it's not there yet so.
And like you said, there was a whole wealth of data that came in the last two weeks, and it's I think it's caused the FEDS and problems that we've seen multiple times, a lot of data come in during their blackout period, so you don't have reserve bank presence, you don't have chair Powel out there interpreting the data, and I think they get a little stuck with where the consensus and markets was before they had to go dark for a while.
And I have to point out how Claudia is the creator of the Psalm rule, which is that recession indicator that is used by the FED. What do you think that is telling us at this point amidst all of this debate about where the economy is headed right now.
So we're not in a recession right now. I mean, the Sam rule is a recession indicator, it doesn't forecast a recession, and I think it's just a way to summarize.
When you look at all of the labor market data, it's really good.
I mean, if you told us a year ago the Fed's going to raise five percentage points and the labor market is going to be well below four in unemployment. I mean, it just it almost doesn't make sense except the labor market is strong, it is able to buffer what the Fed is doing to a large extent.
So cloudy. I mean, A big part of the pushback on a recession call, or certainly one that would call for a longer, deeper recession call, is that the consumer's in pretty good shape. As you mentioned, you know, most folks want a job, have a job. Retail sales still remain pretty strong. How do you kind of put all that together?
What we knew coming into this this year, late last year, the consumer up and down the income distribution, had a lot of money on the side, a lot to buffer. Now, this money will run out. It's not like it's forever, but that's something that US consumers, a big group of families, have never gone into a recession with this kind of a buffer. So you really watching physical policy versus monetary policy play out. And I do think at some point the Fed's going to get the upper hand. It's a
big question if they've done too much. But as of right now, things are good, especially for consumers, which are seventy percent of the economy.
Have we gotten to a point where the FED has been too aggressive to try to lower inflation, or do you think where they are pausing or potential skip the debate here, this is the proper point to do it.
So I think a pause at this point was appropriate.
Just they've gone really fast and really hard.
It's an opportunity for the rest of the economy to catch up and then assess. What I found very puzzling in the statement this last meeting and share pilot the press conference is they're like, we're going to pause here, but almost all the participants think we're going to have to raise later.
And it's like, if you really.
Think that, why are you pausing right now?
Right?
It didn't quite hang together.
That was a hawkish pause, but I think they kind of pushed it past what was It was kind of a confusing hawkish pause.
When you looked at the dots, dots go also in the terminal and to see the wide divergence there between members. Was that surprising to you or is that something that you typically would see in the midst of when you are getting to a point toward rate hiking cycles ending.
Or it is heartening to see that the FMC participants are having a robust debate both externally and particularly internally, and these dots, particularly you go out in the out years.
I mean, if we.
Didn't see some dispersion, it would be a problem.
Right.
They are being very clear that maybe they've done enough, maybe they've done too much, maybe they haven't done enough. So I the dispersion in the dots, I think, especially as you go out over the forecast, makes a lot of sense to me. We are going to end up higher than five percent this year. Like I said, I find that a little bit harder to get how the decision and the messaging hang together.
Hey, Claudia, just for me, I feel like one of the limits to my analysis of kind of economic conditions is I just spend way too much time in the greater New York area. I don't get out much, and when I do, I tendify myself on the West Coast. So am I really out there seeing what's going on? Do you get it? Are you ever concerned that the macroeconomic data we get from the government isn't really representing kind of what it's like out there day to day for the average American?
Well, in fact, we do have official data that looks at states, even looks at counties, through the labor market area unemployment statistics. Now, the problem is these come out a couple weeks after Jobs Day, you know, and we've all moved on and at CPI and for some reason analysis from one of my Bloomberg opinion columns, I looked at these differences and it was actually inspired by talking to a journalist who covers New York and was like,
the dispairit. He's pretty the right. Racial disparities haven't closed in that way in New York.
As they have in the country.
And looking at you know, the places you go to visit, I mean, California is another one that actually has seen their unemployment rate creep up in a way that you know, if they were getting the some rule, you know, as they were the whole country, really they would be in a recession.
Not to say they are.
There's a lot of things happening regionally.
We have to be very careful.
Often the problems in a regional economy don't spread to the rest, but sometimes they do. So it's important, I think, to look at those And frankly, it's just because the data comes out a little later that I think it doesn't get it's due attention.
We did hear from FED Governor Christopher Waller earlier this morning. He's a voting member, as you know, and talking about how fears over a few banks shouldn't alter their policy. Was bet your Jerome pal forced to have to have that hawkish rhetoric after the decision on Wednesday in order to keep the FEDS options more flexible in case there is so unforeseen issue when it comes to the economy, or when it comes to some of these bank stresses that we saw earlier this year with the regionals.
So they hiked twice right after bank failures, and so I don't feel like that was playing a big role in the pause. They've only got a month between now in July in terms of data, so I don't know exactly how they think what was appropriate this this month, you know, won't be appropriate next month. But we'll see when they do those those extra hikes. Yeah, so I think that's I guess that's the thing that I would emphasize.
So, Claudia, as fast forward as a little bit to the July meeting, what do you think the FED does here?
I think it'll lean heavily on what happens in the consumer prices. They did in this last data release, they got some relief on this super core their you know, core services without housing.
They need to see it.
Overall in core core has been very sticky.
It's been very, very.
Painful to watch it just move along.
Now.
They're not going to take one month of good data and hang their hat on it. So I think they are looking in the banking sector.
They're looking not.
To look for another failure, but to look for the credit tightening.
Enough, so all right, Claudia, thanks so much for joining us. Claudi Sam, She's founder and independent economists with some consulting.
You're listening to the team Ken's live program Bloomberg Markets weekdays at ten am eastering on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
Paul, I feel like, because we are we had the FED meeting earlier this week, we had retail sales yesterday coming in stronger than what people were expecting. I feel like we have to unpack that with our next guest, and who better to do it with than Mari Shore, senior equity analyst at Columbia thread Needle Investments, who's going to talk to us about that retail sales report. Obviously the consumer strength and inflation. Mari, break it down for us.
What is your take on the latest round of data when it's related to the consumer.
Yes, thanks again for having me.
The May data was definitely encouraging given the tougher compare, and it does reflect the underlying resiliency of the consumer. But I also think we did see the benefit from warmer weather following a cooler April, and also additional holidays, and we know that the consumer is showing up around
holidays and key events. But as we do look forward, I would say the outlook is still more cautious, as temperatures are expected to be cooler in the early summer, and we continue to see the consumer shifts spending towards needs from wants and towards services away from goods.
So we talk about temperature is supposed to be cooler in June and July. Wait a minute, that's not good. I'm a beach person. I need to get the side compound. Yeah, exactly, So, I mean, Mari, what it's interesting thing when you think about spending out there, is it across the board or are there pockets of depending upon income levels, stronger weaker than the others, or is there just do some of these macro trend levels Are they pretty representative across the board?
Well, we are definitely seeing a broad divergence between categories. So I would say the weakest categories remain some of the big ticket categories that were strongest during the pandemic, like home related items consumer electronics, while the strongest categories remain health and wellness, e commerce which has recently picked up again, and also eating out, which really plays into
the strength in experiences. When we think about different income demographics, I would say we've really seen a broad slowing across the spectrum. We know that the low income consumer is still under pressure from higher food inflation, but even at the higher income levels we have seen a slowdown, which is likely related to the market volatility.
We've seen the weakness and the.
Housing market, and also some questions as to the jobs outlook.
So how does this alter your projections when it comes to earnings growth moving forward?
It doesn't really.
It really supports I think what I've been saying for some time, and that is that the consumer in aggregate still looks strong. But again, when you dig a little deeper.
You continue to see that shift towards goods from service I'm sorry, towards services from goods and towards needs from wants, and so as we move through the year, especially with the rising risk of recession, as I know some of your prior guests have discussed, I think it really does place risk on the company's guidance for the year, which is very much back half weighted, And as we think about what the key driver of sales could be going forward, it is a little bit more difficult to identify.
If you think about during the.
Pandemic, most of the companies drove sales growth through pricing, and that is no longer a lever that the retailers can pull. And so now you really need to see unit demand accelerate to see stronger sales growth. And I think it is hard to identify a catalyst for that stronger unit demand into the back half the year given the macro pressures that we've discussed.
And to your point, you were talking about those price hikes that have gone on for multiple quarters now maybe not being able to see that continue. Campbell, super instance, signaled that recently that consumers might be less willing to put a but those price increases. General Mills actually flagged that similarly in an investor day as well. When it comes to the margin pain that a lot of household
products companies, packaged goods, beverage stocks have been under. Is most of that pain passed yet or is more to come on the margin front.
It's a great question. There's lots of moving pieces on margin. I would say from a input cost standpoint, given the disinflation we've seen and a lot of the key commodities, they will see less pressure on the margin line from that. However, promotions are normalizing normalizing, which will be a headwind. And in addition, we've heard retailers talk about issues like shrink or theft, which is a huge headwind.
For them this year.
And also for retailers like Target and Walmart and the warehouse clubs, they are seeing unfavorable category mix.
Pressure their margins.
So this year was setting up to be a pretty easy year from a margin standpoint, just due to easy comparisons.
But as it's played.
Out, I think we've seen that the headwinds are now seemingly more than offsetting the tailwinds on the margin line.
Mario, I know it's only June. But let's start thinking a little bit ahead here, first back to school and second holiday season. What are the retailers saying at this point as to expectations.
Yeah, I think for the retailers this year into holiday, given the macro headwinds and the demand normalization in some of these discretionary categories, their real focus is just on planning conservatively so that they are able to keep inventory as closely aligned with sales as possible so they do not face the kind of markdown risk that they saw last year and last holiday season.
I think there's.
Also maybe a couple select opportunities, like, for instance, with the bed bath and beyond bankruptcy, you've heard a couple retailers talking about going after the home category in a bigger way.
To try to pick up some of that share.
But I think in general, the retailers are very mindful of the more cautious macro backdrop, and they're really just trying to plan their business as conservatively as possible so that they can try to protect their margin rate even if sales come in a little bit slower.
We only have about forty five seconds left. You mentioned theft picking up. Why is that.
It's a great question.
You know, some of the retail executives that we've spoken about have said that in their decades of experience, they have never seen such a broad based pickup in theft. Again, that's across the country, across store type, whether.
It's rural versus urban. I think it.
Really reflects the macro draft backdrop that we find ourselves in and maybe some of the legal changes in terms of what it takes to prosecute some of these fats as felonies versus maybe more minor charges.
But you've really heard all.
Of the retailers talk about it, whether it be a grocery store, a target, a home depot, an alta. And it's something that they're all really working hard on, but they are also trying to prevent theft, theft and not sacrifice sales.
All right, Mari, thank you so much for joining us. Always appreciate speaking with you, getting your perspective on the retail space. Maris Share, senior equity analysts at Columbia thread Needle. You're listening to the.
Tape cans Are Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio. The tune in app Bloomberg dot Com and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
We're going to switch things up do more of a C suite conversation tool, and this is a really important conversation. I'm looking forward to our next guest, Daniella Gilboa, the co founder and CEO of AIVF, an AI healthcare company. She's joining us to discuss healthcare tech and IVF technology is an important conversation for many. Danielle, thank you so much for joining us. How are you?
I'm great, Thank you for having me.
Well, tell us about your company and what you do.
Sorry I missed that for a second. Can you reput the question.
Tell us about your company and your mission.
Yeah. So we're here to democratize and optimized if the IVF journey and what we do is we developed an AI model that understands and analyze embryos better than any human being. And the million dollar question of which a will become a baby? We have an ancestors, so our models analyze the embryos and are able to detect and recognize different features, so with different outcomes, and so we are uh, this is the way of optimizing IVF.
So, Gabrielle, I've have some experience with us, and I'm a big fan of IVF and thank you Medical College of Virginia MCV. How does your technology work? How does artificial intelligence which is the buzzword for every industry out there? Now I have another one to add to it, which is in vitrio fertilization. How does it work? How does it work.
Well?
Before any AI development? What we we do in IVF clinics is we would analyze embryos based on morphology or the way that the embryo looks or looks under the microscope. So this is very subjective human analysis. This is very guestimation. Like what we do with AI is that we train the model on huge amounts of data images of embryos
and videos of embryos and patients backwards. And so the AI could again I said before, I detect different features that the human eye cannot see and come up with a score that's much more accurate than any embryologist or physician could realize. And this is really the way of democratizing our Yeah, what I mean is that the million dollar question of which embryo will become a baby and which embryo we select to transfort back to mummy's uterists. Instead of having it as a tilent error. Now you
have an accurate way of doing it. And ai as ai sauld you know, because.
So that Danielle has your tech, has your technology? Has your technology been deployed in the marketplace? And if so, kind of what's the efficacy here or the success right?
H Yeah?
So the technologies is deployed in across Europe and Southeast Asia and South America and the US very soon.
Uh.
And yes we have h and we have reports from you know, from clinics uh saying that they have in pressed success rates and they're actually changing their pricing model. Instead of pricing its pair treatment, they price it pair baby because they now have a system that they can trust and it's reliable and it's accurate, and it's just the impact is so amazing that you know, we're we're very honored to be doing it.
How does the regulation work?
It's uh, well, you know, ai as ai is something that regulatory organizations study. It's not yet uh confirmed, but but it's fully regulated. We have the ce Mark and the FDA very soon. So it needs to be regulated. You know, it's something that.
We push when you say, you say how soon regulated when you say soon, how soon?
As soon as in a few months, So.
Talk to us about it. Just kind of the US market here, what are what what are the opportunities here in the US market relative to or compared with some of the existing technologies.
Well, the US market is an interesting market in terms of IVS because fertilities is the global problem. And the problem is that you have huge demands for IVF and it's growing and very limited capacity. The clinics cannot scale so and and the demand is huge because we can freeze their eggs and we delay childbirth and you want to force the career and then new families and thoreography
and all of this make IVS be very popular. But then the clinics in the US, you only have four hundred and eighty clinics that it, so only twenty percent of the need is actually being served. So eighty percent of people needing IDs, you know, just give up the dream of having a baby. And when you apply AI technologies in healthcare, and you know, IVF is a very good example. You reduce costs, you reduce time to pregnancy, you reduce money to pregnancy. You're able to scale the clinics.
You could build new clinics that are based on AI technologies, and you know, much better and much more efficient. And you know, this is the way of again democratizing IDs and this is our mission.
Well, it's a fascinating story. We appreciate you taking a few minutes, Danielle to kind of share it with us. Danielle Gilboa, co founder and CEO of AIVF.
You're listening to the team Ken's are Live program Bloomberg Markets weekdays at ten am eastering on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
One person that we've been talking to really since the beginning of the pandemic about the whole supply chain issue, which is something that most of us never even thought of. We just click on a button, assume it's gonna be at our door. The next day, we walk into a store and it's gonna be on the ni you know, it's gonna be on the shelf.
And then the pandemic completely upended it all.
And then the pandemic updated. Then we had to get smart on like, Okay, where does this stuff come from? How does it get shipped? How does it get transported? Oh, it goes to a dock, and then it's got to go nowhere else and then it's got to be put on a railroad or a truck. So we had to get smart on that. One of the folks that really really helped us was Gene Soroka, the CEO of the Port of La So he's been a good friend to
keep us up to date on what's happening. And Gene, I know the story is first, I want to start with what's going on at your Port of Los Angeles because I know there's been a work You guys have been in negotiation with a lot of the unions and it looks like we have a breakthrough here in a last day or two. Give us an update there, Jene, Yeah.
Good morning, Paul and Jess. You know it's interesting. This Wednesday night, it was announced by the Acting Labor Secretary Julie Sue that the Pacific Maritime Association, the Employers Group, and the International Lawn short Warehouse Union our dock Workers reached a tentative agreement on a new six year contract after thirteen months of negotiations. So welcome news across the board for importers, exporters and those of us who work in and follow the US economy so closely.
And you said tentative, So what are the next steps.
Yeah, this is a process, Jess, and it does rely on the very democratic and great brand of the ILWU. They're going to meet together as leadership here next month. Month they'll talk through the details of the tentative agreement to their delegates who will then go out to the twenty nine West coast ports and that they represent and socialize this with the membership, and then the rank and
file will vote following that socialization process. So based on history, we're looking at a couple three months to get the contract fully ratified. That is a very important process to make sure the voices of those who were working on the docks every day get heard.
All right, here's one of the things I learned during the pandemic, kind of appreciate people in society and the economy that you don't maybe think about often. One of course, was healthcare workers and you think about all the stuff they do and all the challenges they have to go through and how critical they were, and how much challenges were put on their shoulders and how much weight was put on their shoulders during the pandemic. And of course
we thank the healthcare workers. But the other one was this whole supply chain thing. You don't really think about it, but the people on the front lines literally really the dock workers and all those people, how important they are to everyday daily life for all of.
Us, so across the world.
It's all across the world. And again, Jean's been kind of have to spend some time and bring it up, bring it to our attention here. So Jane talk to us about this contract as what it means for the workers there that again did just yeoman's work during all the time, but particularly during the pandemic.
Yeah, this this was such an interesting time and with the benefit of history on our side. You know, these men and women were out there, whether they were truck drivers, warehouse folks working in the factories or or here on our docks before vaccines, before we know how pervasive COVID nineteen was going to be. I lived in China during SARS and I thought that was bad, you know, we were really hunkered down and we didn't travel, and we
were watching out for our health and safety. But this was one thousand, ten thousand, whatever the experts say, worse than what I witnessed during that time in the early two thousand and These folks just went out to work, and then we saw the American consumer start buying more and more goods because we weren't going to ballgames or flying to see Grandma. And the amount of cargo that came through here was just unbelievable. And they met the
challenge day in and day out. They averaged six days a week on the job here at the Port of Los Angeles, and it was just selfless and how they kept this American economy moving at a time where all of us, you know, we're just looking for answers. It was tremendous. So in this contract six years is really great. It gives stability to the workers, It gives confidence to the companies to bring more cargo back here to Los Angeles, and I think we'll talk about that in a moment too.
But it also is going to make sure that they're paid what they're worth. We etioned whether it's the hourly wage based on the skills, the attainment, the accreditation to the healthcare and benefits that they receive, and a special thank you for what they did during the pandemic. I think that's going to at least from what I see.
I just flew in from Tacoma last night. It was that the largest agriculture conference that Peter Friedman holds for the Agriculture Transportation Coalition, and we announced that night at the big dinner with six hundred guests there and everybody was so pleased. But I came back last night in part to be on your show here this morning and my discussions with the rank and file doc workers. I saw Melvin McKay, who represents Local ten in Oakland. I
saw a bunch of guys from Seattle and Tacoma. They're just elated, good and they're really appreciative that so many of us recognize what they're doing every day.
We actually had Bori Shore, an equity analyst from Columbia Thread Needles, speaking to us earlier when it comes to the retail consumer landscape. But when I think about these tenative deal when it comes to something like this, especially retailers like Walmart, Target that are starting to land this different type of merchandise for the critical back to school seasons as well as Paul was talking about obviously holidays
coming up. When it comes to me acturers and automakers and food producers, what do you think this deal would actually mean when it comes to exporting those types of goods who rely on those Pacific ports.
Well, Jess, this is where the work really begins, and we're so thankful again to the Acting Secretary Julie Sue, Jim McKenna, the PMA, Willie Adams International President of the ISLW for really going all out this week to get it done. Julie was on the ground for seventy two hours along with her staff, working around the clock trying
to bring the two sides together, which was successful. What it means now is that I'm out on the road and I'm going to be crisscrossing the country talking to people like Jay Timmins at the Manufacturing Association, John Gold and Matt Shay at the National Retail Federation along with the importers and exporters to make sure that they understand what the ground truth is out here and how much
we want their cargo back. You know, what's interesting is that for every five forty foot containers we moved through this port, we create a new job. And that's where it all begins, trying to help the American economy, getting people to come to work every day, put food on the table, put their kids through school. This is really the American economy at its finest right now, and I've got a big job ahead of me. It's a tall
mountain to climb. But we need industry to come along with us, and I think the AG conference was a great start to that this week.
So Gene, just give us about forty five seconds kind of where the Port of Los Angeles is now relative to its competition, and kind of where what you're looking to do going forward.
Paul.
We're running at about seventy percent of capacity right now. Half of that thirty percent that's open is cargo that shifted to the East and Gulf Coast because folks were quite concerned about what was going to happen in this negotiation. The other half or fifteen percentage points are really economic related. It's still high inventories of retailers, manufacturers, and others, but I'm starting to see the cargo coming across. We've got fifty eight ships traversing the Pacific right now. That's a
good number and the highest it's been in sometime. We're going to get on a better cadence of calendar items back to school, fall, fashion, year end holidays starting here in the month of June. I like our chances for a good second half of the year.
All right, Geen, as always, thanks so much for taking a few minutes and bringing us up to dat on what's happening in the all important supply chain.
You're listening to the tape Can's our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
You know, Jess. In my time at Bloomberg, I've been able to see many, many Bloomberg offices all around the world. You have, everyone is more awesome than the next. And we're sitting here at Bloomberg Global HQ, here at Midton Manhattan. It is an extraordinary office base. Yet there's like nobody here. And then I remember, oh, it's a Friday.
Summer Friday, summer Friday, just new Friday.
Yeah, so go figure. So that brings up the big, bigger issue of getting folks back to work. Where do we go? I don't know, we're in here every day because we're on air, but a lot of folks have this flexible thing worked out to a to a t. So the question is where do we go from here? In a lot of I think boardrooms and c suites are trying to get a sense of that as well. Our next guest is going to help us think about that.
Erica Keswin. She's an author and workplace strategists and she thinks about this stuff a lot, and she joins us here in our Bloomberg Interactive Broker studio. So, Eric, it seems like, as a result of the pandemic flex work, working three days a week, that seems to be the new norm. How do you think about it?
Well, great to be here. I think about it a lot. Kind of keeps me up at night. You know, when you look at the data, you know seventy percent, seventeen percent of people want to be fully remote all the time. I think nineteen percent of the people say they want to be in the office all the time, and now
that leaves most of the people in the middle. And so what I'm seeing is we are moving to that three day a week seems to be the norm, but i am I've spoken to a number of CEOs this week that are that are starting to make a shift, and they're making it in a couple of ways. Many of them have been saying, you know what, you can come in two or three days a week and pick whatever days you want. I think those days are few and far between because what's happening is people come in
and you're missing each other. There's no energy, and so you're not really getting the bank for the buck of bringing people in. So I'm seeing a shift too. Let's do three days, two days, four days, whatever it is, but these are the days because what you want to do is to create connection and energy. I mean, I'm here in the Bloomberg offices. There are people and there are energy, and so that is a big shift that I'm seeing.
And here in the office, I have to point out New York City office occupancy breaking fifty percent for the first time since the pandemic. How do we get here?
You know, I think people are realizing that there's been this slow erosion of the cold sure of their organization. And it's not to say that remote and hybrid companies don't have cultures, because they do.
But it's hard.
And so if you decide that you're going to be not in the office, you've got to put resources and energy around building a culture in a remote or hybrid way. It's doable, but you have to put a lot of energy success.
Have you seen any success stories there?
Yes?
What's working? What's not working?
So I talk a lot about designing a day in the office that's worth the commute, and what you don't want. Again, we're in New York City, so we have people coming into New York City from Connecticut, from Westchester, from Montclair, New Jersey. Right, they're coming in. What we don't want and then I'll tell you the success stories and what
we do want. But what we don't want is people coming in and no one from their team is there, and they're on zoom all day and they're not seeing anybody, and that it creates what I call the recipe for resentment. They are mad because they've commuted an hour and a half from wherever it is they live. So Instead, we need to design days in the office or even moments that matter for people where they do feel connection. So what do those look like? Some companies build it around
learning and development. If we don't help our people grow and develop, I describe it as up, down and sideways, they're going to quit. So you bring people together, have a speaker, a lunche and learn, bring people together to learn something. Other companies, you know, they align it with
their values. Some of them might do service work. Let's have every you know, the first Wednesday of the month when our people come in, maybe Wednesdays our big day when everybody commutes in, and we're going to have an opportunity to give back to our local community. Maybe it's when managers do their one on ones. Maybe it's when
there's a big strategy meeting. And so it doesn't necessarily matter what it is, but it needs to be intentional because also what I say, and it's a little cheesy, but bear with me, it's left to our own devices. We're not connecting.
That's right, And I think where are we in this kind of this whole there's almost a generation, not a generation, but certainly three or four years of young workers and my oldest twins are part of that crew. They've never had that. They've always kind of been remote, and so they don't have that cultural bias that, oh this is unusual. They're default is why am I coming into the office, as opposed to the fault is why are you're working at home?
Well, and there is a big generational thing going on. I too have twins.
My post are twenty.
But one of the you know, people are living longer and they're working longer. So in many companies we have five generations of people working under the same roof, and the older people are now starting to realize, wow, these younger gen z, they don't want to be me right. You know, it used to be you'd go to a law firm or an investment bank and everybody did. Their goal was to become the partner. So things really are shifting.
The other thing that we're seeing is that some of the you know, the gen z, the younger generation, are missing some of those soft skills. They don't even know how to use the phone. And so it's the bridging these generations together, understanding where people are and trying to meet them where they are and bring, you know, bring together the boat all the most positive sides of each generation.
When it comes to these occupancy rates, how does this vary across different industries?
You know, like you said, you guys have to be in the office, right, so you're here. You know, there are huge percentages of people never went home in the pandemic, and all these conversations that we're having about everybody being at home.
It's the knowledge.
Workers and so, not the hospitals, not the restaurants. And so when we think across industries, some people are like, what are you talking about? We never we never went home. So all of these conversations around, you know, the occupancy rates really are around, you know, the workers that don't technically have to be there, which is why we want to design time in the office that that is worth it, and to think about the why and not just say not you know, let's do three days or four days
just because generationally it's what we've always done. Let's think about the why when we do come together, what are we going to be doing and why is it better for us to do these five things in person?
You know, I've seen a lot of I guess survey work that says, you know, and this is in London, New York everywhere saying if my company makes me come in five days, I will definitely think about leaving and getting a different job. Now, I wonder when the economy, if the economy slows, when the economy slows, when the unemployment rate is no longer three point seven percent, it gets up to four four and a half five percent, are do companies think that then maybe they'll have a little bit of leverage.
They do, but I would disagree, because your top talent that you want to keep, they have options. You know, even with the economy slowing, even with all the tech layoffs, what we're seeing is these people leave and they do
have another job pretty soon right after. My opinion on this is that if you are, if you're a Goldman Saxe, if you're some of these companies that are paying at a certain percentile, and and people want to work there because of the cachet of working there and the experience of working at you know, some of certain companies, some of the top law firms, you know, the banks, they're gonna they're gonna come in five days a week, they are, and then they're gonna do it until they're and then
they're going to leave. But a CEO said to me this week, you know, party's over. In those words, he said, the party's over. We are bringing our people back, and I said, you know, let's kind of see what happened. He's doing four and one, so four days in, one day out. And they're not those kinds of banks and law firms that are going to be able to justify, in my opinion, doing it, because I think the minute people, the good people get another job, they're going to be out.
How great is the scope of the danger of trying to advance your career if you aren't coming into the office, and especially the Paul's point when he's talking about the younger generation that's just coming out of college and might not be in office every single day.
So I'm a big believer of coming into the office, not coming in for the you know, just the sake of being in the office. If you are listening to this and you're a leader and you're asking your young people to come in, you need to make sure some of the older people, some of the more experienced people are there, because what's the point. I mean, yes, they'll meet the other interns, they'll meet the other young people,
and there's a real benefit to that. You know, most people meet the most important people in their lives at work. I mean it's where, you know, the way it's always been.
It is shifting.
But if the more senior people aren't there to help them develop, and just don't assume because we all happen to be under the same roof that the young people are going to be mentored. I do worry that proximity bias is real, and so flexibility. I think a lot about that for the young people. I don't think that they're all going to get picked for the best assignments
if they're never showing up. And I also worry about it for women that if you have, you know, a husband and a wife, and the husband's like, all right, I have flexible work, but I'm I'm going to go in and the women aren't. I think it's going to take women twenty steps back.
Erica, thanks so much for joining us. Really appreciate it. Erica Keswin, author and workplace strategist, author of Bring Your Human to Work, Tensurefiaways to design a workplace that's good for people, great for business, and just make change the world.
Thanks for listening to the Bloomberg Markets podcasts. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three.
And I'm fall Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio