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Business Owners and the Labor Market - The Pendulum Has Swung
May 20, 2025
It doesn't seem that long ago, in 2021, when the job market was ripe with opportunities for white-collar workers.
The flood of government money during the COVID-19 pandemic and a tight labor market created a demand for workers in almost every sector of the economy. At that time, the market pendulum swung deeply in favor of the employee, and lucky candidates had their pick of positions and options for benefits.
As we emerged out of the pandemic, and the labor market remained tight, many employees decided they preferred WFH over working in the office. The tight labor market at the time put leverage on the side of the workers, and in many cases, their demand to continue WFH was met.
With current market volatility, economic question marks, and changing expectations, the job market has swung back in favor of employers rather than their staff. Meanwhile, many business owners and CEOs have come to realize the downsides of a remote or even hybrid work environment.
Many companies are also following in the footsteps of the Trump administration and Elon Musk's DOGE team to trim the unnecessary fat of their companies and opt for efficiency. At the same time, AI has emerged as a significant opportunity to streamline operations and improve efficiency.
Let's examine how current dynamics are changing the workforce, re-examine the relationship between employees and employers, and discuss how small business owners can take advantage of this moment.
The Realities of Remote Work
The COVID-19 pandemic drowned the whole world in change to start this new decade. Work, health, education, entertainment, politics, and everyday life changed in unexpected ways.
Five years on from those tumultuous days in March 2020, lingering attitudes remain. Many employees are unhappy with RTO (return to office) mandates from CEOs.
A large majority of CEOs agree that creating a positive work culture with remote employees is essentially impossible. While there may be occasional times when remote work can be helpful (such as during sickness or family emergencies), many business leaders believe that it should not be the standard.
Accountability, productivity, and creativity are much easier to foster in an in-person office environment. With the pendulum swinging back in favor of employers, employees will need to adjust their expectations.
Adopting AI
Artificial Intelligence (AI) is here and here to stay; this means that another element of the evolving workplace is how businesses are choosing to implement AI.
Many tasks in customer service, sales, communication, data entry, and even computer programming can easily be done through a large language model in a fraction of the time it takes a regular employee. Technological advances in our society stratify our population into early adopters, mainstream users, and late bloomers.
We are at the point of mainstream users: many individuals and businesses have already implemented AI as early adopters over the years.
What does this mean for workers? Those new to the workforce should simultaneously be familiar with using AI tools while also ensuring they have tangible skills that AI does not yet have. Workforce veterans should learn as much as they can about AI and be ready to adapt and pivot in their careers if need be.
The message from business owners is clear—adapt or you will be left behind.
Set Up Employees For Success
The foundation for a strong employee/employer experience starts during hiring. During the interview process, managers should conduct proper evaluations. Yes, a candidate may have the necessary background and credentials for the job, but will they be a good fit with your company's overall goals?
Do they have complementary ideas and behaviors? Here at The Alexander Group, we recommend that our clients utilize the DISC assessment paired with behavioral training.
Once a candidate becomes a new hire, also make sure that your team has onboarding checklists and a training timeline ready to go.
New hires can get lost in the shuffle of a new job, so having these guideposts will help them acclimate to their new role in the first few weeks. It's also a critical time for managers to correct any mistakes or watch for bad habits so that the new hire won't carry these on down the line.
Mentoring is another excellent way to create a positive culture at your small business.
Senior employees should mentor new hires not only throughout the onboarding process but also throughout their time at the company. The mentee gains a role model and someone to vouch for them when new opportunities arise, and the mentor gains leadership skills and the chance to own the success of the company's legacy.
Building and Maintaining a Positive Culture
Even though the workforce may need a little "tough love" right now, winning business owners know the importance of building and maintaining a positive culture in the long term.
One straightforward reason that many employees have been resisting RTO mandates is that the in-person office has lost favor with them. How can business leaders challenge this attitude?
In addition to working with new hires, let's get back to the basics.
Celebrate your team's individual and collective wins with recognition and incentives.
Happy hour, team outings, and pizza parties help the team get to know each other beyond the work itself and strengthen communication. In fact, these events can be a step in the right direction, assisting with the "loneliness crisis" many millennials and Generation Z'ers are experiencing.
Create a business that people want to work for, and then your employees will take ownership of the company's success.
Connect With The Alexander Group
A small business owner needs a group of individuals with similar goals. Our group of Greater St. Louis area business owners collaborates, discusses everyday issues, and develops dynamic solutions. When business owners pair this with our one-on-one coaching, they set themselves up for success.
Contact us today if you're a business owner ready to commit to improvement!
