Want a larger piece of the (economic) pie? Look for the most competitive industries

Caught a really interesting piece over the weekend at The Atlantic looking at one potential reason why (relatively speaking) that worker's or labor's share of GDP is decreasing when compared to 'capital's', i.e. ownership's share. This divergence in share has been thoroughly examined as a primary driver of increasing economic inequality, and was the main subject of Thomas Piketty's influential Capital in the Twenty First Century from 2014.

Said differently, and much more simply, today in the aggregate is getting a smaller piece of the overall economic pie than in the past. There are tons of data points you can examine on this, but they all more or less show the same thing - on average, workers are no better off today, and might be worse off, than they were 20 or 30 years ago.

Why The Atlantic piece titled One Reason Workers are Struggling Even When Companies are Doing Well caught my attention is that it shared some insights from a recent NBER research paper on not just that this share divergence is happening, but offered some reasons as to why it is happening.

And the theory is kind of an interesting one, and if true, can help better inform anyone making career/industry decisions moving forward. Best of all, it is a pretty simple idea that boils down to this - The more concentrated an industry is, (fewer competitors and the ones that dominate are all pretty large), the lower labor's share of the income for that industry will be.

Here's some color from The Atlantic piece:

The researchers looked at data from the U.S. Economic Census between 1982 and 2012 for nearly 700 industries in six major sectors, including manufacturing, retail, wholesale, services, finance, and utilities and transportation. Looking at how much the four largest firms in each industry accounted for in terms of total sales in the industry, they found an upward trend in concentration in all of the six sectors, meaning that it was increasingly common that just a few firms accounted for the bulk of sales. Since the U.S. Economic Census reports payroll, input, and employment, the researchers were able to observe a negative correlation between concentration and labor’s share—meaning that this trend of so-called superstar firms tends to mean workers taking home a smaller share of the pie. Moreover, the more concentrated an industry had become, the larger the decline in labor’s share.

Unpack that a little bit to show a pretty straightforward formula:

Industries have tended to consolidate over time --> the more dominant the four largest firms in an industry become --> then decreasing shares of the overall industry profits find their way to workers/labor.

There are a couple of reasons on offer for why more consolidated, big-firm dominated industries are getting worse in terms of share of profits for workers. One is that these companies are simply growing revenues at a faster pace, and labor costs just have not (or do not need to) keep pace. Another is that modern, transparent business practices make it easier for consumers to find and reward the 'best' companies, which drives out competition in the industry faster than before - and reduces the potential number of firms competing for workers.

The takeaways for the average employee?

Probably that it might pay, (no pun intended), to keep on eye on the relative levels of competition in your industry, particularly if you are in a role that feels industry-specific. If your industry has seen consolidation with weaker competitors being driven out of business (or being acquired), the trends suggest a shrinking percentage of profits will find their way to you and your colleagues.  

You might be better off thinking about an industry that seems to have more, and more even competition, where the market share, (and to some extent the demand for labor), is not being controlled by two or three big companies. And one where the threat of competition for your skills can either score you a better offer somewhere else, or give you more leverage and power in your next compensation negotiation with your current shop.

More options might not be better for the owners of your company, but they might be much, much better for you.

Have a great week!

On the balance between data and people

Quick shot for a busy Monday. If your organization is one of the many that has or has implemented or has at least considered implementing a more data intensive and analytical approach to the HR and talent management, then I recommend taking a quick look at the comments from a young leader in another discipline where data and analytics have completely changed talent management - the world of professional soccer.

Since Moneyball, and maybe even before that, all kinds of sports (baseball, basketball, soccer, and more), have seen a kind revolution and sea change in the approach to player evaluation, team building, and even in-game strategy driven by the increasing availability of advanced data about player performance and better tools to assess and crunch that data. No leader of even a half-decent professional sports team fails to consider metrics, data, analytics, etc. when making decisions about talent.

And so it has also come to pass that in the 'real' world of work, more and more organizations are or have embraced similar and data driven approaches in their talent management programs. Assessments that validate a candidate's 'fit' for a role, algorithms that assess employee data to flag flight risks, or models that pinpoint expected future leaders are just some of the examples of how data/science/analytics are being used in HR.

But if you have begun adopting these data-driven approaches to talent management processes and decisions how can you know if you have perhaps gone too far, or have let the 'human' part of human resources fall too far by the wayside? 

I think the answer is that it is kind of hard to know for sure, but you probably know it when you see it. But i think it stands to reason that today still, in any field that human performance and human capability are what matters, then it can be dangerous to completely trust the data and fail to consider the people.

Here's what Julian Nagelsmann, (millennial, for what it's worth), manager of the German Bundesliga side Hoffenheim has to say about blending data, analytics, and the 'human' side of management in forming his approach to leading his team. (Courtesy of The Ringer):

I studied sports science and have a bachelor of arts. The variety of football data is becoming more and more specific. You shouldn’t make the mistake of looking at football as a science, but there are more diagnostic tools, and the examination of the human body is improving in football: What effect does AstroTurf have on the body? What does lots of shooting do? What does lots of passing do to muscles? There are always new methods and you have to go with the science, but football will never be a science.

There will be more influence from science to analyze games, and you have to keep educating yourself. But you mustn’t make the mistake of seeing football as something technocratic or based on something that is fed by science. You can develop the person by using scientific aspects in your judgement, but the human is still the focus.

A really interesting take from a manager of a team of highly accomplished (and highly compensated), professional soccer players. Even in sports, where every move, every decision, every physical reaction to game circumstances can and is analyzed, and the subsequent data parsed and performance conclusions reached - Nagelsmann still cautions us to not forget the humans. 

In fact, he goes much further than that - he claims the human has to remain the focus.

Take in the data, be open to the data, don't be a data Luddite - but don't let it become the only tool you use as a manager or a leader.

Super perspective and advice from a leader who sits completely in the nexus of an industry and discipline that has been historically a 'gut feel' business that is being disrupted by data and analytics. 

Use the data. But don't forget about the people.

Great advice for a soccer team or for an organization near you.

Have a great week!

HRE Column: Looking ahead to HR Tech 2017 - #HRTechConf

Once again, I offer my semi-frequent reminder and pointer for blog readers that I also write a monthly column at Human Resource Executive Online called Inside HR Tech that can be found here.

This month, in what has become an annual exercise for me, I take a look at the emerging HR, HR technology, and workplace themes and trends that surface from my early planning for the HR Technology Conference in October.  While some of these themes or trends are just extensions and evolutions of ideas and concepts we have been talking about for a while, (mobile, analytics, engagement), some others like the field of Artificial Intelligence, or AI, seem really fresh and new.  I like to think that reviewing hundreds of HR Tech speaking submissions and having dozens of calls with leading HR tech providers and thought leaders provides me kind of a unique perspective on what is really happening with modern HR technologies inside organizations.

In this month's HR Executive column I take a look at a few of these initial themes or trends that I am seeing in HR, HR Tech, and the workplace, and how these trends will help inform and shape the discussions in 2017, and the program for the HR Technology Conference in October. This is always a fun exercise for me, and I hope you get some ideas and insights from this review as you plan out your year.  

From the HRE piece:

I have started the planning process for the 20th annual HR Technology^® Conference and Exposition (Oct. 10 through 13, 2017, and back in Las Vegas after a quick detour through Chicago last year). To date, the most common question I am asked from individuals and organizations interested in attending and/or speaking at the conference is what the main themes will be this year.

Granted, the annual event covers an ever-broadening spectrum of technologies, business processes and topics and, over time, many of the primary challenges facing HR and business leaders have grown, changed and evolved as well. Five years ago, the word "analytics" would likely not have popped up in an HR leader's job description. Today, analytics is high on almost every HR leader's list of strategic priorities. And the main themes of HR Tech have evolved as well, along with these ever-changing business challenges and technology-driven opportunities.

But to get back to the question, here is my very preliminary swing at the answer:

Artificial Intelligence and HR

When I initially started brainstorming topics for the column, one thought was to write about the recent Consumer Electronics Show and look for parallels and extensions from the new and emerging consumer tools to how these technologies might manifest in the workplace. While I decided not to do an entire column on that topic, there was one clear "winner" of CES this year, and that was Amazon's Alexa platform. Alexa, via Amazon's Echo device, is a voice-activated, intelligent digital assistant that can perform a wide variety of useful tasks, primarily in the home. The big story from CES was how Alexa is already being leveraged by numerous other devices -- such as in cars, on refrigerators and directly integrated in smartphones. The big takeaway from this, and a trend I am seeing reflected in many of the HR Tech proposals I have reviewed, is the increasing comfort level and capability individuals are developing with intelligent and responsive technologies, in addition to their increasing reliance on them. As these intelligent technologies proliferate in our personal lives (often accompanied by voice-interface capability), we can expect to see them emerge in HR and workplace technology as well. I expect "AI for HR" will be an important topic at HR Tech 2017 and beyond.

The Employee Experience

Last year in this space I talked about the evolution of employee engagement as an important topic for 2016. Now that a full year has passed, I think this evolution from the idea of "engagement" to something that has become known as the employee "experience" has made significant progress. More organizations have begun looking past the focus on the "end result," i.e., the engagement score, and have launched initiatives (and looked to supporting HR technologies) that more directly impact the key components of an employee's experience with the organization -- components that ultimately drive what we measure as engagement. A look through my inbox of pitches for HR Tech 2017 reveals topics such as career development, employee well-being, corporate social responsibility and personalized employee learning -- all topics that speak to organizational efforts to enhance their employees' positive experience.

Platforms and Integration

Like most technology trends, there is a lag between the introduction of a new technology, the identification and emergence of that technology as a "trend," and the more widespread acceptance and adoption of the technology by providers and organizations. At  the 2015 conference, we began to look more closely at the importance of HR-technology platforms, ecosystems and application marketplaces. No matter the specific terminology, the main idea was that organizations of all sizes had adopted numerous and often disparate HR-tech solutions, and were facing the daunting challenge of integrating these diverse solutions both for process efficiency and productivity, as well as for consolidated reporting and business intelligence. Fast forward to early 2017, and HR-tech platforms, application interoperability, and the "marketplace" or app store concept is now being more fully realized and adopted by providers and customers. At the upcoming HR Tech Conference, I expect we will see and hear stories about some important and early organizational successes that have resulted from applying these technologies and approaches to harmonize their divergent sets of HR solutions.

Read the rest at HR Executive online...

If you liked the piece you can sign up over at HRE to get the Inside HR Tech Column emailed to you each month. There is no cost to subscribe, in fact, I may even come over and shovel the snow off your driveway, take your dog for a walk, or help you plan your summer vacation.

Have a great weekend!

HRE Column: On Recruitment Marketing

Here is my semi-frequent reminder and pointer for blog readers that I also write a monthly column at Human Resource Executive Online called Inside HR Tech that can be found here.

This month, in the aftermath of the recent Talent Acquisition Technology Conference and thinking about all the innovative and potentially disruptive HR and talent acquisition technology solutions that continue to appear in the market, I thought about how much I have heard and seen lately about the concept or category of 'recruitment marketing.'

Both at Talent Tech and at the recent Smashfly Transform event, the strategies, tactics, and technologies that HR and talent acquisition leaders are employing to define and communicate their unique employer brand and value proposition, as well as find, engage, and convert their targeted candidate communities were on full display. This field or category of recruitment marketing has seemingly emerged from the combination or confluence of a tight labor market, powerful and purpose-built technologies, and HR and talent acquisition strategies that are leaning heavily on consumer marketing precepts and concepts. 

It is a really exciting, interesting, and fast-moving time in this new recruitment marketing space, and I thought it would be fun and hopefully valuable to share with HR Executive readers my thoughts about this new and emerging space. I came up with a few observations for my latest HR Executive column.

From the HRE piece:

One of the highlights of the recently concluded Talent Acquisition Technology Conference was the emphasis on recruitment marketing as an emerging new recruiting discipline. The definition of recruitment marketing is pretty straightforward: "the strategies and tactics an organization uses to find, attract, engage and nurture [sought-after people] before they apply for a job, called the pre-applicant phase of talent acquisition." (As an aside, you know a new concept has "arrived" when it has a Wikipedia page for its definition.)

In some ways, recruitment marketing is just the natural extension of the widely discussed "HR should act more like marketing and/or sales" argument that has become popular in recent years. While that argument has indeed proven durable, it may not always be appropriate in all cases, as George LaRocque from HRWINS, one of the conference speakers, pointed out. LaRocque correctly showed that, while most consumer marketers serve only their ultimate external customers, recruiting leaders and recruiters often serve several kinds of customers: candidates, hiring managers, and even HR and organizational leaders.

But even if there is not a perfect analogy between recruiting and sales/marketing, many progressive organizations and talent-acquisition leaders are successfully using consumer-marketing strategies, tactics and approaches to more effectively "market" their organizations and employment opportunities to potential candidates. This discipline of recruitment marketing has indeed emerged and grown more prominent in just the last few years and since not all HR leaders might be completely familiar with the concept and approach, I'd like to explore at least a few important points and share some thoughts on how HR and organizational leaders can begin to incorporate these ideas into their talent acquisition strategies.

Why is recruitment marketing different than just posting job ads?

In her closing keynote at the conference, Stacy Zapar presented a comprehensive review of the many strategies organizations can and perhaps should employ to more effectively define, communicate and market their unique employer brand and employee value proposition to the candidate marketplace. While posting specific job ads on the company careers page and ensuring these ads are distributed to additional outlets such as Indeed or LinkedIn are certainly part of most organization's candidate-attraction strategies, Zapar correctly emphasized that these efforts are only a small part of the optimal overall recruitment-marketing strategy.

Read the rest at HR Executive online...

Good stuff, right? Humor me...

If you liked the piece you can sign up over at HRE to get the Inside HR Tech Column emailed to you each month. There is no cost to subscribe, in fact, I may even come over and rake your leaves car or clean out your gutters or even help you re-purpose the Thanksgiving leftovers. 

Have a great, long Thanksgiving weekend!

ANNOUNCEMENT: The HR Happy Hour Podcast Network

I am super excited today to share some great news - the official launch of the HR Happy Hour Podcast Network, and the details of the three new shows that will soon debut on the HR Happy Hour umbrella. My co-host, Trish McFarlane and I are thrilled to be joined by such a great lineup of shows and contributors, and you can read the details of the announcement HERE.

Some quick backstory for folks who may not be familiar with the HR Happy Hour Show, (I know, shocking!), that will help explain and set the context for today's announcement.

Back in 2009 I was an adjunct instructor at the Rochester Institute of Technology in Rochester, NY teaching a graduate-level course for HR Master's students on the topic of HR Technology. At that time I got the crazy idea to try and record interviews with HR and HR Tech leaders, and make these audio files a part of the course's required materials for the class. I used the Blog Talk Radio platform to make the recording process a little easier for guests, as back then, even Skype was hardly in use by most folks, and fewer folks were recording podcasts on their own, in even a quasi-professional manner.

Since then, the HR Happy Hour Show has evolved and transformed. The first two or three years featured mostly live-streamed shows broadcasting at 8PM on Thursday nights, complete with callers, a lively Twitter backchannel on the #HRHappyHour hashtag, and even dedicated Google Wave threads!

In the last few years the HR Happy Hour has become a more traditional podcast, generally pre-recorded, or recorded live at industry events, and (lightly) edited to fit the now much more widespread and popular podcast format and formula. The last few years have seen a dramatic rise in the overall popularity of podcasting in a number of topics and domains, and I personally am proud that the HR Happy Hour Show was podcasting before podcasting was cool! We have had a series of great guests, covered the most relevant topics in HR, HR Technology, work, and the workplace, and had a lot of fun along the way.

And now with the launch of the new HR Happy Hour Network, these first three new titles, (details are in the release here), and to be partnering with such a great group of people, I am confident the next seven years of the HR Happy Hour will be just as much fun as the first seven.

Many thanks to everyone who has listened to, supported, or even guested on the show so far - stay tuned for more great and informative content, HR and HR technology insights, and hopefully - lots of fun from your pals at the HR Happy Hour Show and Network.