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In the latest edition of The Grant Williams Podcast, Christopher Joye, Chief Investment Officer and Portfolio Manager of Coolabah Capital, makes an underappreciated observation about the inflationary effects of the modern corporate organizational chart. Over the past few decades, an explosion of “mandatory” jobs that contribute little to the creation of tangible products or services—in other words, to productivity—have invaded large companies like a cancer. Joye points to the big banks, which have seen a massive increase in
“compliance departments, risk departments, legal departments, government affairs departments, ESG departments, [and] human resources departments,” leading to the inevitable result that “we are producing similar products with many more people.”



Once spawned, none of these positions can really ever be eliminated, and it necessarily follows that the creation of the same increment of GDP now requires a far higher net wage expenditure. A secondary effect of so many unproductive roles is the dwindling number of qualified candidates to fill the productive ones. These observations form the basis of Joye’s view that we should expect inflation to be a tad stickier than most are modeling.

We would extend Joye’s thinking by pointing out another troubling trend in Western labor markets: that the definition of “doing work” has been blurred with “attending meetings.” As a general rule, meetings are a giant waste of time, and yet nothing makes an employee occupying an unproductive job feel more productive than being invited to one. A packed calendar is the sign of an important person, after all, and what better way to kill time until you can go home and attend your evening meetings with the team in Asia?