Business
Companies with return-to-office mandates are hemorrhaging female talent
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To start with what we know: Flexible working arrangements—wherein bosses trust their people to get work done in whatever configuration, wherever it makes sense for them—is almost always the best plan for everyone. Companies that fail to take workers’ desire for flexibility have paid the cost dearly. The past four-plus years have moved flexible work from a nice-to-have to a requirement for many job seekers, none more so than caregivers, lower-income workers, and women, who are more likely than men to fall into both categories.
Then there’s what we’re learning: No single company can escape the impacts of eschewing distributed work and expect to maintain their entire staff. Upwork, a freelancing platform connecting companies with freelancers, recently released a string of reports finding the outsize effect return-to-office mandates have had on women in the workforce. The TL;DR version: It’s been awful for them.
“The system is not working for women, so they’re opting out” in favor of alternative, flexible career paths, Kelly Monahan, the managing director of Upwork’s research institute, told Fortune.
Indeed, per Upwork’s new research, nearly two-thirds (63%) of C-suite leaders whose companies have mandated an office return of some sort say the policy has led to a disproportionate number of women to quit.
About the same share of executives told Upwork they’re struggling to fill those vacant roles—and more than half agree that their hemorrhaging of women employees tanked company productivity. (They surveyed 2,500 global workers, including over 1,500 C-level executives.)
The problem didn’t begin with the remote-work revolution of the 2020s. “We’ve lost decades of female workforce participation leading up to the pandemic,” Monahan, who holds a PhD in organizational leadership, said. The U.S. lags behind other major economies in creating a workforce that actually works for women at all. “We still have a culture that favors the people who built it originally.”
America’s working-women problem
Don’t let the news of Vice President Kamala Harris’ candidacy for president distract you from the underwhelming state of women’s power in U.S. workplaces. Per the Center for American Progress, over the past 30 years, every G7 nation saw at least 10% growth in working women. The same metric remained mostly flat in the U.S., which CAP estimated will cost the U.S. 5% of potential GDP growth.
So the problem predates the Industrial Revolution, but today’s state of affairs—namely, an across-the-board office return—is still disproportionately hurting women. “I’m very bullish on alternative career paths, because we don’t have the same social safety nets of other G7 countries,” Monahan said.
Searching for avenues of greater career control, many women (over half, in Upwork’s survey sample) have taken to freelancing; nearly 30% of those women said no amount of money would lure them back to full-time work. (To be sure, Upwork itself is a freelancing marketplace, which relies on a steady stream of new freelancers seeking contract work to remain profitable.)
The productivity paradox remains, despite years of evidence
While conducting her research, Monahan sought to determine whether flexibility is “a perk or table stakes in job design” and whether “remote work is a perk or just how we work now.” Both are still paramount questions, even as we near the five-year mark since the world locked down due to COVID.
“There’s nothing that correlates higher in-office time with better performance; in fact it’s the opposite,” she said. “That doesn’t mean you have to be 100% remote—and women aren’t always asking for that—just time for life outside of work.”
Workers’ desire for trust underpins all the new findings, Monahan said. “Our data has found that leaders who enable a level of flexibility—give people hybrid options—are way likelier to trust their people more.” (After all, the best companies to work for have happy employees due to the emphasis on trust and wellbeing, more so than pay or benefits.)
Monahan encourages leaders to consider whether their hesitance to embrace more flexible, distributed ways of working are, at the core, issues of trust. “You can’t lead the same way as when we were all in-person,” she hopes bosses realize. “I encourage people in that gray space to have conversations with their teams and figure out how asynchronous work might enable better work.”
Indeed, a 2023 Upwork report found that high-performing companies actually had a wide variance for asking people back to the office—but they stood out among their peers in their commitment to flexibility and trust: 62% of those companies worked remotely at least one to two days per week.
Research published by software firm Atlassian earlier this year echoed Upwork’s report, finding that 1 in 3 Fortune 500 and 1000 bosses whose companies mandate some amount of in-person work say they’ve seen zero productivity change as a result. Those same execs also overwhelmingly agreed that how work is done far outweighs the significance of where it happens.
Generally, today’s approach to performance management and measurement is “all very transactional,” Monahan said, with bosses focusing on what they can see. Often, measurable performance benchmarks have no column for where the work was carried out. “Those are very butts-in-seats, micromanaging philosophies.”
And workers notice. The majority of them told Upwork that their employer doesn’t have an accurate understanding of their productivity; most say they’d be more satisfied and productive if they had more of a say in how they’re assessed.
But at companies that embrace flexibility, performance measurement includes columns like creativity, innovation, customer-relationship building, adaptability, and contribution to company strategy. “It’s much more about human-centric, relationship-oriented measures at the forefront; that’s the reality today,” she said. “We don’t work—anymore—in isolation.”
Business
Russia economy: Relying more China’s yuan is backfiring
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After the U.S. and its allies sanctioned Russia in 2022 for its invasion of Ukraine, Moscow turned away from the dollar and euro in international transactions and relied more on China’s yuan.
That coincided with more trade between the two countries as Russia was largely shut out of Western markets as well as the global financial system.
By June, the yuan accounted for 99.6% of the Russian foreign exchange market, according to Bloomberg, which cited data from Russia’s central bank. And Russian commercial banks ramped up corporate loans denominated in yuan.
But this dependence on the yuan is now backfiring as top Russian banks are running out of the Chinese currency, Reuters reported on Thursday.
“We cannot lend in yuan because we have nothing to cover our foreign currency positions with,” German Gref, CEO of top Russian lender Sberbank, said at an economic forum.
That’s because the U.S. expanded its definition of Russia’s military industry earlier this year, thereby widening the potential scope of Chinese firms that could get hit with secondary sanctions for doing business with Moscow.
As a result, Chinese banks have been reluctant to transfer yuan to Russian counterparts while servicing foreign trade payments, leaving transactions in limbo for months. With yuan liquidity drying up from China, Russian companies have tapped the central bank for yuan via currency swaps.
At the start of this month, banks raised a record 35 billion yuan from Russian’s central bank through these swaps, according to Reuters. And banks were expecting more help.
“I think the central bank can do something,” Andrei Kostin, CEO of second-largest bank VTB, said Thursday. “They hopefully understand the need to increase the liquidity offer through swaps.”
But on Friday, Russia’s central bank dashed those hopes, calling on banks to curb corporate loans denominated in yuan.
The Bank of Russia also said in a report that swaps are only meant for short-term stabilization of the domestic currency market and are not a long-term source of funding, according to Bloomberg. But rather than simply filling the roles that dollars and euros did, yuan loans have expanded.
“The increase in yuan lending was partly caused by the replacement of loans in ‘toxic’ currencies, but 41% of the increase was down to new currency loans,” the bank said.
The central bank also released a survey that showed a quarter of Russian exporters had trouble with foreign counterparts, including blocked or returned payments even when dealing in supposedly friendly countries. And about half of exporters said the problems got worse in the second quarter from the prior quarter.
The overall Russian economy has been propped up by the government’s wartime spending as well as oil exports to China and India. But the combination of busy factories and labor shortages due to military mobilizations have stoked more inflation.
Researchers led by Yale’s Jeffrey Sonnenfeld warned the seemingly robust GDP data mask deeper problems in the economy.
“Simply put, Putin’s administration has prioritized military production over all else in the economy, at substantial cost,” they wrote. “While the defense industry expands, Russian consumers are increasingly burdened with debt, potentially setting the stage for a looming crisis. The excessive focus on military spending is crowding out productive investments in other sectors of the economy, stifling long-term growth prospects and innovation.”
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Business
ETFs are set to hit record inflows, but this wild card could change it
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![ETF Edge, September 4, 2024](https://image.cnbcfm.com/api/v1/image/108029268-1725475250ETF-FULL-090424.jpg?v=1725475249&w=750&h=422&vtcrop=y)
Exchange-traded fund inflows have already topped monthly records in 2024, and managers think inflows could see an impact from the money market fund boom before year-end.
“With that $6 trillion plus parked in money market funds, I do think that is really the biggest wild card for the remainder of the year,” Nate Geraci, president of The ETF Store, told CNBC’s “ETF Edge” this week. “Whether it be flows into REIT ETFs or just the broader ETF market, that’s going to be a real potential catalyst here to watch.”
Total assets in money market funds set a new high of $6.24 trillion this past week, according to the Investment Company Institute. Assets have hit peak levels this year as investors wait for a Federal Reserve rate cut.
“If that yield comes down, the return on money market funds should come down as well,” said State Street Global Advisors’ Matt Bartolini in the same interview. “So as rates fall, we should expect to see some of that capital that has been on the sidelines in cash when cash was sort of cool again, start to go back into the marketplace.”
Bartolini, the firm’s head of SPDR Americas Research, sees that money moving into stocks, other higher-yielding areas of the fixed income marketplace and parts of the ETF market.
“I think one of the areas that I think is probably going to pick up a little bit more is around gold ETFs,” Bartolini added. “They’ve had about 2.2 billion of inflows the last three months, really strong close last year. So I think the future is still bright for the overall industry.”
Meanwhile, Geraci expects large, megacap ETFs to benefit. He also thinks the transition could be promising for ETF inflow levels as they approach 2021 records of $909 billion.
“Assuming stocks don’t experience a massive pullback, I think investors will continue to allocate here, and ETF inflows can break that record,” he said.
Business
Tens of thousands in South Korea protest lack of climate progress By Reuters
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By Sebin Choi and Daewoung Kim
SEOUL (Reuters) – More than 30,000 protesters gathered in South Korea’s capital in broiling heat on Saturday, demanding more aggressive action by the government to combat global warming.
With temperatures exceeding 30 degrees Celsius (86 degrees Fahrenheit), protesters young and old marched in the country’s biggest demonstration so far this year, snarling traffic in central Seoul.
They waved large banners reading “Climate justice,” “Protect our lives!” and “NO to climate villain (President) Yoon Suk Yeol’s administration”.
“Truth is, without the air conditioner this summer was not liveable and people could not live like people,” said Yu Si-yun, an environmental activist leading the protest.
“We are facing a problem not unique to a country or an individual. We need systemic change and we are running out of time to act.”
Organised by the 907 Climate Justice March Group Committee, the protest followed a ruling last month by South Korea’s top court that the nation’s climate change law fails to protect basic human rights and lacks targets to shield future generations.
The 200 plaintiffs, including young climate activists and even some infants, told the constitutional court that the government was violating citizens’ human rights by not doing enough on climate change.
South Korea, which aims to be carbon-neutral by 2050, is the biggest coal polluter after Australia among the Group of 20 big economies, with a slow adoption of renewable energy. The government last year lowered its 2030 targets for curbing industrial greenhouse-gas emissions but kept its national goal of cutting emissions by 40% from 2018 levels.
Even South Korea’s kimchi has fallen victim to climate change. Farmers and manufacturers say the quality and quantity of the napa cabbage used in the ubiquitous pickled dish is suffering due to intensifying heat.
“Feel how long this summer is,” said Kim Ki-chang, a 46-year-old novelist who was participating in the protest for a third straight year.
“This would be a much bigger threat and survival issue to younger generations than the older ones, so I think the older generation should do something more actively for the next generation.”
Seoul has had a record 20 consecutive nights defined as “tropical”, with low temperatures remaining above 25 C (77 F).
Protest organising committee member Kim Eun-jung said the demonstrators chose the popular Gangnam financial and shopping area this year, not the Gwanghwamun area they used last year, to have their voices heard by the many big corporations there that the group blames for carbon emissions.
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