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    Entries in economics (20)

    Monday
    Jan072019

    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!

    Friday
    Dec142018

    PODCAST: #HRHappyHour 350 - The US Labor Market and Economic Trends for 2019

    HR Happy Hour 350 - The US Labor Market and Economic Trends for 2019

    Hosts: Steve BoeseTrish McFarlane

    Guest: Josh Wright, Chief Economist, iCIMS

    Sponsored by Virgin Pulse - www.virginpulse.com

    Listen HERE

    This week on the HR Happy Hour Show, Steve was joined by Josh Wright, Chief Economist from iCIMS to talk about the important labor market trends, why these trends are important for HR and Talent Acquisition leaders, and what 2019 might have in store for the labor market and the economy at large.

    Josh shared his thoughts on why HR and Talent leaders should care and follow these big picture data points and trends, why economics is the language of business, and how understanding the economic outlook at a macro and local level can help HR leaders make better decisions.

    We also geeked out a little on some of the important economic data sets like the monthly jobs report, weeky new jobless claims, and Steve's favorite, the monthly BLS JOLTS report. In addition, Josh shared why keeping abreast of the housing market can be of value to HR leaders.

    Josh also shared the interesting work iCIMS is doing with their Monthly Hiring Indicator, and how that data can help HR and Talent leaders in their organizations. Finally, Josh shared some thoughts on what 2019 might have in store for the labor market and the economy overall.

    You can listen to the show on the show page HERE, on your favorite podcast app, or by using the widget player below:

    This was a fun and geeky show! Thanks so much Josh for joining us,

    Remember to subscribe to the HR Happy Hour on Apple Podcasts, Stitcher Radio, Google Podcasts or wherever you get your podcasts - just search for 'HR Happy Hour.'

    Tuesday
    Jul112017

    Learn a new word: The General Theory of Second Best

    There's nothing I care more about that NBA basketball, (I promise this isn't another basketball post, but I may have to dig out a basketball analogy to make the point), with the possible exception of learning new things.

    Which is why, I think, I run the 'Learn a new word' series on the blog. I am also falling into the trap of thinking 'if this is interesting to me, then it should be interesting to people who read this blog'. After 10 years of this, I am not really sure if that is even true. But I persist.

    So here's today's 'Learn a new word' entry - The General Theory of Second Best.

    What in the heck is that?

    A decent description can be found in the Economist: (emphasis mine)

    The theory of the second-best was first laid out in a 1956 paper titled, sensibly enough, "The General Theory of the Second Best", [paid access] by Richard Lipsey and Kelvin Lancaster. Roughly put, Lipsey and Lancaster pointed out that when it comes to the theoretical conditions for an optimal allocation of resources, the absence of any of the jointly necessary conditions does not imply that the next-best allocation is secured by the presence of all the other conditions. Rather, the second-best scenario may require that other of the necessary conditions for optimality also be absent—maybe even all of them. The second-best may look starkly different than the first best.

    Let's think on that for a moment and take it back (sorry) to the basketball analogy I hinted at in the open.

    The optimal allocation of resources for say a basketball team has traditionally consisted of five different kinds of players, with different body types, playing styles, and characteristics that when assembled, would provide the team with the right balance of scoring, passing, rebounding, and defensive play that would result in winning.

    But let's say that the team can't acquire or develop one of the positions, let's say the point guard - the player who usually is charged with handling the ball, setting up his/her teammates for easy scores, and functioning as the on-court leader of the team. If this example team can't find a good enough point guard, the Theory of Second Best suggests that 'answer' to the problem isn't making sure the other four positions/roles are filled as designed and slotting in any old player as the point guard.

    The theory suggests that the 'optimal' solution, when one resource (the point guard), is missing, may be to take a completely different approach to building the team. Maybe the team looks for more 'point guard' like skills in the other positions, or maybe the team implements a different style of offense entirely to mitigate the problem.

    The real point is that once conditions appear that make the 'first best' strategy impossible to execute, that you may need to think really, really differently about what will constitute the 'second best' strategy. 

    The second best may look starkly different than the first best.

    I really dig that and hope you think about it too, once your plans in business or in life run into some challenges.

    Friday
    Jun302017

    CHART OF THE DAY: All jobs matter

    Super quick shot for a 'let's get out of town for the long weekend' Friday.

    Today's chart comes courtesy of our pals at Bloomberg and depicts the types of jobs that have seen the most total job losses in the first part of 2017.

    Here's the chart. then some quick FREE comments from me. 

    Three quick hits then let's fire up the grill for some hot dogs...

    1. 'Wired' telecommunications jobs seeing the most losses so far in 2017 is not terribly surprising. More and more folks have abandoned a hard phone line at home, and I bet it won't be too much longer until most companies do the same for their employees. 

    2. Most of the rest of the impacted job sectors are in the physical retail space. Department stores, sporting goods stores, general clothing stores, all are under significant pressure from the likes of Amazon, Walmart, and others. I went to one of the local malls a week or two ago, (weird, I know), and it was half-empty and I issued an over/under of 11 months until it closes for good.

    3. I want to go to one more chart for point #3 - one that shows the comparative job losses in department store employment (which we seem to not care about that much) vs. coal mining employment (which, at least in election season, we care about a lot). Take a look...

    Almost 10x more jobs lost in the department stores than in the coal mines. But for whatever reason I bet most folks would have no idea of that disparity.

    Why?

    Some of it is political I suppose. There are pockets of the remaining coal mining jobs that are in important areas and states for electoral purposes. 

    But department stores are, or at least were, everywhere. And the people that work in them probably need and care about their jobs just as much as any coal miner. And if it is because of Amazon or Walmart or changing shopping tastes that thousands or potentially hundreds of thousands of department store employees end up out of work then that is likely more of a national concern than a few hundred coal miners here or there.

    That is not to diminish the coal miners who are at risk. Not at all.

    It's just to make a point that the department store workers matter too. And so do the warehouse workers. And the cashiers. And the bookkeepers. 

    And everyone whose job is under threat from automation, politics, outsourcing, or anything else.

    All jobs matter. And so, too, do the people that work them.

    Whether they live in a swing state or not. Whether they have a PAC or not. Whether we think they are 'good' jobs or not.

    Have a great 4th of July weekend!

    Monday
    Mar062017

    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!