A deep dive into the impact of automation and technology on jobs

I spent some time over the weekend, (I know, I probably need some other hobbies), reviewing a new report from the Brookings Institute titled 'Automation and Artificial Intelligence: How Machines are Affecting People and Places'. In the report, Brookings sought to examine (like plenty of other organizations in the last few years), what the potential impact of advanced technologies, automation, and AI will be on the labor market. Mainly, which kinds of jobs and in what areas are more or less likely to be affected, changed, and potentially replaced as technology continues to improve and advance.

There is a ton of interesting information in the 100+ page report, and for those of you who are interested in this sort of thing, I would block some time to go through it all, but for those who may want a shorter, TL;DR version, here are what are to me, the three most interesting findings/conclusions/takeaways from the report.

1. Contrary to a lot of hype and hysteria around automation and AI, most jobs are not highly susceptible to automation. Take a look at the key finding from Brookings in the chart below:

While almost no single occupation will be completely unaffected by the adoption of new technology, the impact on jobs will be of varying intensity and significant for only about 25% of jobs. Another 52 million or so jobs, about 36% of the labor force will see some or medium impact from new tech. And another 39% of jobs will only see a low impact from new technology. This disparate impact on jobs reminds me of the old saying, 'The future has already arrived, it's just not evenly distributed'.

2. Lower wage jobs are, on average, more exposed to potential automation. Within the variability expressed in the first chart, Brookings tries to break down what kinds of jobs, at what kind of wages, and in which geographic areas are most prone to be impacted by technology. Here's a look at the data around wage level and potential impact from automation:

The main driver behind lower wage jobs being more susceptible to automation is the tendency for jobs made up largely of routine, predictable physical and cognitive tasks are the ones most vulnerable to automation in the short and medium term. Think jobs like office administration, simple production, and food preparation. So according to Brookings the roles that now tend to pay the lowest wages are at the most risk. The danger of this of course is that the people holding these jobs also tend to be the least prepared to make a job shift into roles that are more complex, higher up the wage scale, and less likely to be impacted by technology.

3. In addition to varying widely across types of jobs and wage level, automation of jobs is likely to vary widely by location as well. The larger relative impact will be felt, according to Brookings, in smaller, and more rural areas. See the data below:

There's a lot of detailed data to parse through there, but basically workers in smaller and more rural communities are about 10 percentage points more likely to have their jobs adversely impacted by technology than workers in urban areas. This could be a by-product of the continuing challenge that smaller communities have in keeping their skilled and younger workers from leaving to seek better opportunities in larger towns and cities.

Since this is a long post already, I will leave covering what the folks at Brookings suggest can be done by localities, companies, education, and people in order to be better prepared for the ongoing waves of automation. Suffice to say though that understanding the problem and challenge is the important first step to solving it.

Take some time to look at the whole report if you can.

Have a great week!

In a hot labor market, even the best employers can get ghosted

By now you have likely become familiar with the term 'ghosting' - the phenomenon whereby a friend, a romantic partner, and as we shall see in a moment, a job candidate or employee seems to disappear - and ceases to respond to any and all forms of outreach and communication. Phone calls are not answered, texts are not responded to, and pretty much no matter how you try to get in touch with the ghost, your efforts are unsuccessful.

With a 10 year or so expansion of the labor force and a reduction in the unemployment rate, the ghosting phenomenon seems to be happening more and more in our little part of the world, the HR and Talent Management arena. Good, qualified candidates seem to disappear with more frequency, scheduled interviews are simply skipped (with no contact or explanation), and just about anyone who can pass a background check probably has more than just your job to consider. Even longer term and at least on the surface reliable and trustworthy employees are more likely, in this hot labor market, to just move on to another, hopefully better opportunity without so much as a 'Hey boss, I am thinking about making a move' or even a 'Hey boss, I would like to formally submit my two weeks notice.' And all of a sudden, they're gone. Leaving HR and hiring managers to have to wade back into the candidate pool, hopefully not to be ghosted by the next candidate of choice.

And it is not just the corner store or local manufacturer that can be impacted by candidates or employees simply disappearing. It can happen in any of the most prominent and successful workplaces as well. Case in point, (Warning: a sports reference is coming) what has happened, according to a report in Deadspin, with the University of Alabama Assistant Football Coach Dan Enos and the circumstances behind Coach Enos' departure for new opportunities.

Per the Deadspin piece:

According to a report from The Athletic, the fear that (Head Coach Nick) Saban uses to manipulate the sport to his whims has also permeated throughout his current staff, which is why none of his coaches were brave enough to tell him that one of his assistants had left the program to take a similar job in Miami:

“Where the F#$% is Dan?!?”

Several of the staffers knew the answer to their boss’ question. Word had already spread that 50-year-old Enos was headed to Miami to become offensive coordinator and quarterbacks coach under Manny Diaz. No one in the room wanted to be the one to break that news to Saban, even though Miami was primed to announce it in a couple hours.

“Dan” is Dan Enos, Alabama’s quarterbacks coach this past season and reportedly the man who was set to take over as the program’s offensive coordinator, following Mike Locksley’s departure to be the head coach at Maryland. Enos decided instead that the Hurricanes were a better fit for his talents. Maybe it was this kind of treatment that convinced him to go to Miami.

The details of how Saban found out do paint a great picture:

One staffer scrambled to check if Enos was in his office. It was empty, save for a pencil on the desk. Maybe he’d already moved into Locksley’s old office, but that one was empty, too.

“He moved out like the Colts,” said one person with knowledge of the matter, equating Enos’ departure to the middle-of-the-night exit by the old Baltimore NFL franchise to Indianapolis.

They had no clue he had peaced out.

Steve here - really entertaining and illustrative look at a reasonably prominent employee move from what has arguably been the most successful and famous "company" in its industry. Over the tenure of Head Coach Saban, Alabama football has been consistently among the best performing teams in the country, regularly competing and sometimes winning, National Championships. That one of Saban's assistants felt confident enough to leave for another opportunity at another university without, apparently, letting his boss Saban even know speaks volumes about the labor market today.

Most of us would probably like to leave a job under positive circumstances. We might need a referral someday, we may even want to keep the door open to a return to the company we are leaving some time down the line. But to essentially pack up the office in the middle of the night and disappear? Well that takes more guts and confidence than we've all become accustomed to from employees. 

I am 99% pro-employee in just about all workplace situations. So I kind of don't have too much of a problem with what Coach Enos apparently did to Saban and Alabama. But that 1% of doubt is saved for the realization that the job market can't possibly always be so good, and ghosting employers either as a candidate or a departing employee might not be the best strategy for the long term.

That's it, I am out - have a great week!

CHART OF THE DAY: Four out of five say that company culture needs to change

Quick take for a waiting for the snow to come Wednesday. I wanted to share one data point from the Katzenbach Center Global Culture Survey 2018, a broad look at organizational culture and leadership.

Here is the survey's lead chart and the one that shows that despite us telling each other that 'Culture eats strategy for breakfast' for literally 30 years, there apparently is still much that organizations and leaders need to do in the culture wars. Data first, then some FREE commentary from me after the chart:

Some quick thoughts...

1. The 'Culture eats' brigade would have us all think that well, culture does actually influence and drive business success to a larger degree than corporate strategy or even organizational talent. If so, then why do four our of five respondents claim that their culture needs to evolve and change in the next three to five years? While most of us probably agree that business strategy has to change, often fairly frequently, to respond to changing market conditions, it does seem kind of startling to see that 80% of people surveyed feel the same about culture. Is culture as malleable as strategy? Does it need to change as frequently as every 3 - 5 years, about the average tenure of talent at many organizations?

2. I still maintain that the 'Culture eats' folks ignore the importance of strategy and the need for culture and strategy to be more connected and aligned. The culture survey states this plainly - "But for the influence of culture to translate into real business results, culture, strategy and operations must be aligned." And again, I'd add to this the importance to have people, the right people with both the right skills and attitudes to be aligned with both culture and strategy.

3. Like many other workplace challenges, there is a difference of opinion and viewpoints about organizations culture between leadership and the rank and file employees. According to the Katzenbach survey, 63% of leaders feel their company culture is consistent with how people actually act in the organization, while only 41% of employees agree to that statement. Leaders at all levels need to really dig in to better understand how the organization's culture really manifests, shapes, and influences how work gets done in the organization. Culture is not what leaders talk about, it's what they do, what they reward, what they punish, and if/how the employees in the organization follow or don't follow these cues.

I feel like we have been talking about organizational culture for ages, and I suspect the conversation will not end any time soon. Good for the workplace blogger types I guess!

Have a great day!

Stack Ranking is somehow still a thing in Corporate America

This week over on CNBC.com a pretty major piece dropped on the workplace culture at Facebook, for years one of America's Top/Best/Greatest places to work, but after a really tough 2018 on a number of fronts, has seen both its market value and its employee morale decline.

There is a ton of detail in the report, but one of the primary contributing factors that led CNBC to describe the workplace culture as 'cult-like', was the company's approach to managing employee performance. Two specific performance management practices were called out for having potentially negative or detrimental impacts on culture and engagement.

The first practice is Facebook's requirement that employees solicit 5 peers at the company to provide feedback on their performance two times a year. This feedback can be given to the employee or to the employee's manager and is kept confidential and importantly, cannot be questioned or challenged. Critics of the process claimed it leads to employees having to make sure they buddy up to a number of colleagues in order to ensure positive feedback only is given, and serves to hide or ignore negative feedback or even just honest and open dialogue.

But the second, and probably more important performance management practice in place at the company is a familiar one - the now infamous 'Stack Ranking' of GE and Microsoft fame. Under Facebook's Stack Ranking process, employees are placed (after a lengthy talent calibration exercise), into one of 7 performance categories, with semi-strict percentage quotas and limits for each category being enforced by management.

For example, the top category or highest grade is given to fewer than 5% of employees, while a grade of 'Exceeds' is said to not to exceed about 35% of staff. The CNBC piece cites several anonymous former Facebook employees who indicated that they felt like they had to invent or stress overly negative feedback and comments for employees in order to avoid having too many of their teams in a given performance category - a common problem with just about all Stack Ranking systems.

While in some circumstances and companies (heavy, sales driven ones for example), Stack Ranking can and does work fairly well in setting expectations and managing employee performance. But in complex, creative, technical companies like Facebook, the practice almost always leads to infighting, politics, favor trading, and ultimately, unhappy teams. GE and Microsoft both eventually shifted away from Stack Ranking, it will be interesting to see if this piece and other problems at Facebook will lead them to do the same.

Really interesting stuff and a fascinating look at how a fundamental HR/Talent Management practice is impacting a major organization. It will be interesting to see how it plays out.

Have a great day!

World Bank Report: How work and workers are changing

I know you have better things to do so you, unlike me, probably did not devote a sizable chunk of your down time this past weekend reading the recently released World Bank's 150 or so page report titled 'The Changing Nature of Work', a look at the future of work, and how work is expected to change as a result of technological, societal, and demographic changes.

The report is really interesting, pretty comprehensive, and probably contains enough information and ideas for a dozen or so deeper dives. But for today, beyond just calling your attention to the report, I wanted to highlight one important set of findings from the World Bank - ideas on how employee skills are changing and more specifically the kinds of skills that will become more in demand moving forward, as technology continues to shape and re-shape work. 

Here's what the folks at the World Bank think about what kind of employee skills are going to have to change in the future:

It is easier to assess how technology shapes the demand for skills and changes production processes than it is to estimate its effect on job losses. Technology is changing the skills being rewarded in the labor market. The premium is rising for skills that cannot be replaced by robots—general cognitive skills such as critical thinking and sociobehavioral skills such as managing and recognizing emotions that enhance teamwork. Workers with these skills are more adaptable in labor markets.

Technology is disrupting the demand for three types of skills in the workplace. First, the demand for nonroutine cognitive and sociobehavioral skills appears to be rising in both advanced and emerging economies. Second, the demand for routine job-specific skills is declining. And, third, payoffs to combinations of different skill types appear to be increasing. These changes show up not just through new jobs replacing old jobs, but also through the changing skills profile of existing jobs.

The World Bank offers up as an example of this changing nature of what kinds of skills the new and future economy will need and reward the below chart of how the general job requirements for a hotel management trainee have changed in the last 30 or so years (see below)

The point being that while the job, in general, is more or less the same in 2018 as it was in 1986, the skills and characteristics of the kind of person who is likely to be successful in the job has shifted. In 2018, there is more emphasis on attitude, communication skills, ability to effectively team with others - the kinds of skills that are essential to business today, and that are still incredibly difficult to automate or replace with technology. Recent data from other sources such as LinkedIn' hiring trends report suggest much the same - "soft" skills, the ones we can't replace with an algorithm or a chatbot are in increasing demand. Said differently, that philosophy or psychology degree your kid wants to take at University may not be such a bad idea after all.

I plan on exploring the World Bank report further in the coming weeks, and encourage anyone interested in the Future of Work to give it a look.

Have a great week!