• | 9:00 am

Why the gap between management and workers feels wider than ever

Season 12 of The New Way We Work launches with a look at one of the most fundamental problems with work: that employees and management don’t see eye-to-eye.

Why the gap between management and workers feels wider than ever
[Source photo: Israel Andrade/Unsplash; MirageC/Gett Images]

Even in the best of times, there’s always been conflict between corporate leadership’s priorities and those of employees. But the past several years have been far from the best of times. When the pandemic forced companies to embrace remote work as a necessity, employees were able to seize the opportunity to work in what is often a more humane way. But instead of embracing remote and hybrid work, countless companies have spent the past three years battling and threatening their employees to return to the office.

And return to office is just one of the employee/management clashes in recent years. There have been high profile labor organizing efforts and strikes, a renewed uproar over executive pay, and often missteps in handling layoffs and cutbacks.

On this season on The New Way We Work, I’m going to be looking at the problems with work—how we got here and how to solve them. For the first episode, I spoke to Fast Company Work Life editors Julia Herbst and AJ Hess. We talked about one of the most fundamental problems with work: that employees and management don’t see eye-to-eye. We broke down where priorities are mismatched, how the general vibe and reality of the job market and economy don’t always match up, and how we can hopefully find common ground.


It can seem pretty gloomy when there are near daily headlines about high-profile layoffs at companies like Google, Microsoft, Amazon, Citibank, UPS, The Los Angeles Times, and more. “Those are businesses that touch a really wide range of economic activity,” says Hess. “However, on the other hand, despite all of this macroeconomic turmoil, there are also really, really strong macroeconomic labor figures.” The unemployment rate is 3.9%, and employers added over 275,000 new jobs in February, which was more than analysts expected. “So there’s this kind of confusing picture, and I think that’s why on the one hand, the market might be going well, but people feel like it isn’t,” says Hess.

So why is there such a disconnect? Part is because many of the layoffs are coming from prominent companies that in some cases have high profits. “​​Part of it is that the churn rate—the rate at which companies hire employees and then fire them—is getting faster, and that’s really well documented over the past several decades,” explains Hess. “So what I think is happening is that we’re still seeing crazy layoffs, but the funny thing is that they’re hiring back cyclically, which is why the unemployment rate stays relatively flat or stable for now.”


During the Great Resignation in 2021 and 2022, companies were desperate to retain employees and were scrambling to give employees what they wanted, but then the mood shifted in early 2023.

“Companies were feeling like they had the ability to push workers back into the office more than maybe the average worker wanted to,” Herbst says. “So even though employment numbers are still strong, it doesn’t necessarily feel like the average employee might have quite the same level of empowerment or feeling they can demand what they want.”

It can also make employees feel like they can’t quit a job unless they have another one lined up, which is in contrast to the feeling many employees had just two years ago when so many companies were eager to hire.

Another reason for this power shift is the implementation or possibility of AI. As Hess points out, the economy is doing well enough that there are available jobs, but they might now be the types of jobs that people want. “In an ideal system, people are paid a significant amount for jobs that aren’t very fun,” Hess says. “But I think as people have come out of the pandemic, they’ve reassessed their values and they want jobs that not only pay them well, but also . . . fulfills some type of personal passion or creativity. So I think one of the disconnects that we’re seeing is that it feels like there aren’t enough good jobs, enough jobs that meet all of these pretty high criteria.”


Pay is always an important part of feeling valued and satisfied at work, and the massive gap between executive compensation and the average worker’s salary has increased steadily over the past decade. CEOs at the top 350 U.S. companies earn 27.8 million per year on average, which is almost 400 times what the typical worker earns. It’s also 1,460% more than executives earned in 1978. “[The gap is] not just growing between employers and employees, it’s also growing between employers of the past and employers today,” says Hess.

Hess points out that workers typically do not fully comprehend how massive the CEO-to-worker pay gap is. However the gap can still do damage. “When I interviewed professors and researchers on how this impacts workers, they told me that even though workers often underestimate how big the gap [is], they do perceive the gap to be big enough that it causes what one professor called ’emotional damage’ to employees. And this hurts morale. It hurts company culture. Many said it hurts productivity.”

For more, including how HR can do a better job handling layoffs, why the return to office debate has lasted for four years, and what’s behind the increase in labor organizing, listen to the full episode.

  Be in the Know. Subscribe to our Newsletters.


Kathleen Davis is Deputy Editor at FastCompany.com. Previously, she has worked as an editor at Entrepreneur.com, WomansDay.com and Popular Photography magazine. More

More Top Stories: