Weekly round-up: Grass isn’t greener for job switchers, more redundancies, and prisoners are employees?

In this week’s round-up of HR news, the grass is proving to not be greener for job switchers, Baltimore prisoners could be classed as employees through the courts, and Peloton’s chief executive steps down after huge redundancies.

Workers switching jobs find the grass isn’t greener elsewhere

The conceived narrative out there is that switching jobs typically makes workers happier. However, it’s now more likely to leave them in a more miserable position than what they were before. According to Bloomberg, people who left a job for a new one reported being less satisfied at work than those who stayed put.

Back in 2022, those who switched jobs scored higher on all 26 separate components of job satisfaction. Wages, work/life balance, and culture were all perceived to be better after job switching. However, these results have now flipped, with those who quit saying they were less than pleased than those who remained on the majority of those elements.

This overall decline could stem from those who took big pay bumps to switch employers during the pandemic. COVID-19 was a catalyst for hiring surging, which was also aligned with the rampant quitting that was occurring during that time. Those who partook in this trend, chasing a higher wage, may not have taken into account the other aspects such as skills training, opportunities, and career development.

In 2022, wage gains for job switchers soared. According to data from the Federal Reserve Bank of Atlanta, as employers dangled signing bonuses and other perks to get people in the door.

Allan Schweyer, a principal researcher at the Conference Board, stated: “If you left a job in 2021 or 2022, you might have been offered a raise of 20 per cent or even more, and you’re thinking, ‘I’ll take that.’ But they might not have looked at other factors, like is there a career path, and what’s the culture like? So, when they get there, they realise the grass is not necessarily greener.”

Baltimore prisoners may soon be classed as employees

A federal appeals court ruled on Wednesday (8 May) that the Baltimore County jail prisoners could be covered by state and federal labour laws, which reverses a previous decision that excluded the detainees on the work program from earning a minimum wage.

A three-judge panel US Circuit of Appeals sent the detainees’ lawsuit back to a lower court, finding that Baltimore County’s main purpose in sending prisoners to work at its recycling plant was saving money, not rehabilitation.

Howard B. Hoffman, the lawyer representing the detainees in their class-action lawsuit, said: “Today’s decision is a historic precedent-setting decision, which is not just a victory for these hardworking workers but for all US workers whose wages may be impacted by the use of inmate labour.”

A Baltimore County spokesperson declined to comment on the ongoing situation, which will now return to the US District Court in Baltimore for reconsideration.

It was explained in the previous case that the county jail detainees who were detailed to the recycling plant through the work program were not covered by the Fair Labour Standards Act, the federal law that governs overtime and minimum wage for most US workers.

The judge threw out the suit in June, concluding that the work program had some rehabilitative purpose, even if the county also saved money by using cheap detainee labour.

Under the county jail’s voluntary work program, workers were paid $20 in total for 10 to 12 hours per day of manual labour at the single-stream recycling plant run by the county’s Department of Public Works.

Hypocrisy arises as the county also contracted with a temporary staffing agency to place people there who were paid minimum wage and overtime to perform the same work as detainees in the work program.

Whether or not this appeal goes through, the moral debate around individuals working the same job for the same number of hours yet earning significantly less is an interesting discussion.

Peloton CEO steps down after they jump on the redundancy bandwagon

Peloton chief executive Barry McCarthy took over in 2022 to revive the brand from its late-pandemic slump. However, he failed to do so, leading to him stepping down and the company cutting 15 per cent of its staff. According to The New York Times, the connected-fitness company announced disappointing quarterly earnings on Thursday (2 May), with revenue down 4 per cent from last year.

This resulted in the company reducing its overall staff count by 15 per cent, or 400 workers, in a last-ditch effort to save costs by $200 million by June 2025. This isn’t the first time, however, that Peloton has let workers go with job cuts in hopes of cutting costs.

In fact, Peloton has had several other rounds of job cuts in the past couple of years, most recently in October 2022, when it laid off about 12 per cent of employees, at the time equating to around 500 people.

McCarthy said in a statement: “Hard as the decision has been to make additional headcount cuts, Peloton simply had no other way to bring its spending in line with its revenue.”

Investors appeared optimistic about the news. Peloton’s stock price rose about 9 per cent in premarket trading.

The company said it was looking to reduce its retail footprint and instead invest in “software, hardware and content portfolio and in improvements” for paying subscribers.