CHART OF THE DAY: More on the increasing 'Quits' data

Quick shot for a busy 'Can you believe my Gamecocks are in the Sweet 16?' kind of a Monday.

Here's just one chart from the latest release of what regular readers recognize as my favorite labor marker report - the Job Openings and Labor Turnover Survey - aka the 'JOLTS' report. 

This chart illustrates the amount of 'Quits'  better known in HR speak as Voluntary Separations, compared with the amount of Layoffs and Discharges, AKA, 'Pack your things, son, it's time for you to go' deals.

Here's the latest chart of this data, then as we all have come to expect by now, some FREE comments from me:

Three quick observations...

1. Really interesting right now that these two lines continue to get farther apart, and the gap between Quits and Layoffs/Discharges continues to increase. The delta between the two series is now 1.6 million, with Quits hitting 3.2 million in January, against 'only' 1.6 million Layoffs/Discharges.

2. The continuing increased in the level of Quits is generally seen as a proxy measure for the overall health of the labor market. The thinking goes that when employees feel more confident in their ability to find alternative work, (either at another company or for themselves), then they are more likely to 'quit' the job they have now. It is a seller's market for labor in some sense. 

3. If this trend continues, and labor markets continue to tighten, (you can also look at total job openings to get a sense of this), then employers will (according to the immutable laws of supply and demand), be forced to take counter measures. They can either look to reduce 'quits' by raising wages, improving benefits, or striving to become less crappy places to work. Or, they can look to alternate sources of labor - offshoring, outsourcing, automating, etc., in order to find the talent/labor they need.

The slow and steady economic recovery since the bottom of the last recession marches on. Unless something changes relatively soon, 2017 is shaping up to be a good year for folks who are in demand, have negotiating leverage, and are feeling as confident as ever in their ability to control their careers.

Have a great week! 

Go Gamecocks!

CHART OF THE DAY: The World Economy in One Chart

You may have seen this chart passed around a week or two ago when it was published on Visual Capitalist, but as I was digging through my 'Read Later' pile over the weekend I felt like it was too good and interesting not to share.

So without further delay,  visual look at the global economy, represented by country contribution to global GDP, and then as you DEMAND, some free comments from me after the data.

(Email and RSS subscribers may need to click through to see the chart, and clicking on the chart will bring you to a much larger version)

Courtesy of: Visual Capitalist

Really interesting and cool chart, right? Three quick observations from me about what 'normals' like us should be thinking about when looking at the data.

1. Go USA! Ok, not trying to be too much of a cheerleader here. But while many other economies (namely China, but I will get to that in a second), have emerged on the world stage in the last twenty or thirty years, the USA still accounts for a shade under a quarter of World GDP. This is important for organizations, particularly US-based or centric organizations to remember even as they make their plans for international expansion. It probably would be a mistake to concentrate too much time and energy on markets that either are relatively small, (say the Netherlands or Spain), or not expected to grow as rapidly in the next ten years, (Germany or the UK).

2. Don't sleep on China, (and to a lesser extent Japan and India). I know that it can be hard for many US businesses to wrap their minds around places like China and Japan. It is hard to to business there. The language and cultural barriers are more significant than say in Western Europe. It may take longer to establish a presence there. But make no mistake, future growth is being defined by what is happening in Asia - not in Western Europe. It may take a little more time, but the organizations that can make the investments, get in front of their competition, will be better equipped to capitalize in the parts of the world that are growing the fastest. 

3. Perspective is really the biggest takeaway from a chart like this I think. We can, here in the US, get really full of ourselves,(see above), and it is a good reminder that even as the largest economy, more than 75% of economic activity is happening elsewhere. Insert your own country in the above sentence and the percentages get even more sharp. Places that we think of as economic leaders like Germany and the UK contribute less than 5% each to global GDP, while seemingly set up for being surpassed soon by places like India and South Korea. None of us are all that big a deal.

Anyway, that's it from me for a busy Monday - have a great week!

CHART OF THE DAY: Report from Startup Land

I don't like to get too caught up in tracking and detailing the latest trends and moves in HR, Talent, or even workplace technology emanating from Silicon Valley. After all, the vast majority of us do not work in go-go startups, can't really empathize with most startups particular challenges, and the rules of engagement for HR and talent leaders at 30 year-old manufacturing companies with 2,600 employees are naturally, (obviously), different than at a new 12-person 'Uber for XYZ' startup in Palo Alto.

But on the other hand if you generally believe that innovation in technology, service delivery, and even 'HR' things like benefits, workplace design, and employee experience does often start at 12-person 'Uber for XYZ' startups, as they are unencumbered by size, tradition, understanding of the 'rules', and simply often too busy to worry about HR things and just get to work, then keeping an eye on what is happening in the Valley can be a useful exercise for any HR and talent pro - no matter what size and type of organization you are in.

One recently published set of snapshots on what is happening in Startup Land comes to us from Silicon Valley Bank in the form of their 2017 Startup Outlook Report (US).  It is a really interesting look at some of the trends, challenges, and points of view from their survey of leaders of 941 global startups, 62% from the US. I want to share three charts from the US portion of the report, with a comment or two for each, then send you on your way for the (long) weekend.

Chart 1 - The 'War' for Talent

You'd expect that a majority of startups would report difficulty in finding the people they need to grow their businesses since many of these startups are in technology fields where the tech itself may be new, and the competition for people with these often very hard to find skills is fierce. But 90% plus saying it is challenging or extremely challenging to find talent? I must say that even surprised me. Even though the percentage ticked down a bit, 9 of 10 startup leaders showed up to work today probably worried about finding talented people.

2. Gender diversity is not improving

While it probably is not surprising that most startups have mostly male leaders and mostly male boards of directors, what is at least a little surprising, given the increased attention on this issue in the last year, is that surveyed startups are getting more male at the leadership and board levels.  Buried behind this chart is the note that about a quarter of surveyed firms have formal programs in place to increase female representation in leadership roles. But a quick look at the above data suggests that these efforts are not moving the needle at all.

3. Despite it all, almost all of these startups are hiring

It is the nature of a startup to grow and hire, so you'd expect these numbers of firms looking to increase headcount in 2017 to be high, but it is pretty encouraging to see that this number has remained consistently high over the last few years. And this is really good news for the kinds of people that these startups are likely to be after - highly skilled, proficient in the latest technology, and able to add value right away. There's a reason why 'Data Scientist' is sometimes called the best job in America today. Although I'd argue that 'Stretch Four' would be better. Non basketball fans, Google that one.

Lots of other interesting data points in the 2017 Startup Outlook Report - I encourage taking a few minutes to read it through. You might not be an HR pro at a Valley startup, but you just might be competing with some of them for your next Data Scientist.

Have a great weekend!

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!

CHART OF THE DAY: People are quitting faster than you can fire them

Do you know what the best day of the month is for workforce trends and labor market geeks is?

Of course you do - when the monthly JOLTS (Job Openings and Labor Turnover Survey) report is released by the Bureau of Labor Statistics!

That great day was yesterday, and in what has become a semi-regular feature on the blog over the years, I want to share just one chart from the latest JOLTS report, and as you DEMAND, offer some free (cheap!) comments on the data.

First the chart - this one showing the amount of 'Quits', (voluntary separations), vs. the level of  'Layoffs and Discharges' (non-voluntary turnover), for the US labor force.

Some quick takes from the 'Take this job and you know what with it!' vs. the 'Clean out your locker and scram' trends:

1. Consistent with the longer term and pre-recession trends, 'Quits' are now exceeding 'Layoffs' by about a 2/1 ratio. Back in 2006, you could expect 2 folks to quit for every 1 who you had to fire (or layoff). Halfway into the last recession, (and for some time after), Layoffs surpassed Quits, as no one in their right mind wanted to quit their job with the chances of finding another one being so dicey.

2. Obvs, the return to a more 'normal' and historical 2/1 Quits/Layoffs ratio puts much more pressure on HR,  recruiters, business leaders - essentially anyone whose job depends on having the needed people in place, and not looking to leave for the next, better opportunity at the drop of a hat. The same drivers that are making the Quits rate climb, (perceived labor market leverage, lots of openings across the country, rising wages), also tend to depress the 'layoff/discharge' rates. Do you really want to can that marginal performer if you are not at all sure you can find a better replacement in a timely manner?

3. Finally, what might be the most valuable take away from looking at the overall labor market Quits/Discharges ratio is that it (should) force us to think about this ratio in our own organizations, and what we think might be the optimal or healthy ratio for us. We probably would rather exist in a world where there were not all that many quits and certainly not all that many firings or layoffs. But that ideal world rarely exists, and even if it did, would it be perfect?

Said differently, there probably should be some tension and some churn in our organizations. The system/culture/workplace should weed out some folks who will self-select out. There should be some really talented folks that end up having/choosing to leave to chase some bigger dreams and goals that you might not be able to offer them the opportunity. And there should be some folks that you force out. The key may not be the absolute numbers of any of these categories, but the way these groups compare. If you are being forced to forcibly remove more folks that leave on their own accord, then you have a problem I would imagine.  And if no one ever decides to leave on their own, you have a problem as well, albeit a different one.

Ok, that's it from me. Enjoy the JOLTS report like I know you will!