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    Entries in labor (57)

    Wednesday
    Aug302017

    What should an employer do when the state reduces the minimum wage?

    While confessing to not knowing any of the back story or local details behind this, I read with interest this piece in the Atlantic about the state of Missouri rollback of the city of St. Louis minimum wage from $10/hour back down to $7.70/hour. The Atlantic piece is solid, if a little long, so if you don't have time to dig in to it the essentials are as follows:

    1. The city passed an ordinance which was designed to gradually increase the minimum wage in St. Louis from $7.70 to $11. The wage had hit $10 just three months ago, in May.

    2. The state of Missouri, whose governor and state legislature were not in favor of this increase, passed a so-called 'preemption' law, effectively barring cities and other local jurisdictions from setting local minimum wages at a level greater than the state level minimum wage.

    3. The preemption law went into effect on this past Monday, reducing or re-aligning the minimum wage in St. Louis back down to the state level of $7.70.

    Got all that?

    Why this was interesting to me was not because of the politics of it, the local control vs. state level authority issues, or even the economic benefits and/or constraints that minimum wages place on labor markets.

    What is interesting is the dynamics at individual employers who just three months ago were forced/compelled to raise wages to $10/hour for anyone earning less than that, and who know are allowed, by virtue of the preemption law going into effect, to cut wages back, as far back as $7.70.

    These numbers might seem small, but a cut from $10 to $7.70 is almost a 25% reduction in pay. I don't care what you are earning, if the boss cuts you by a quarter, you are going to feel some pain.

    So back to the interesting, (to me) stuff. Employers in St. Louis have three (maybe more, but they would be variations of these), options with respect to the wages of any folks they had to give increases to back in May,

    1. Cut everyone who was bumped up to $10 back to their wage level as of May. 

    2. Keep everyone at $10 who was given the bump in May.

    3. Pick and choose who gets to stay at $10, (the better performers, more essential folks), and bump others back to their May hourly rate, or some other rate less than $10 that better reflects their performance, value, and position relative to their peers.

    Options 1 and 2 are the easiest to implement, and for different reasons, the easiest to justify back to the employees. Which is why I would expect that the vast majority of employers will opt for one of these approaches,

    Option 3 is harder to effect, requires better understanding of employee performance and value, needs managers that know what is going on and can communicate clearly why decisions are being made the way they are, and could possibly drive better overall performance, as better workers feel more rewarded, and the others see a way to work towards the wages they desire.

    Yep, Option 3 is definitely much harder to pull off. Which for some cynical reason seems to me the one that the fewest employers will pursue.

    Have a great day!

    Monday
    Aug282017

    In the automation era, maybe people are still a competitive advantage

    In the last year of so I kind of moved off of the 'robots are taking all the jobs' topic as I had gotten a little tired of it and after reading 17.993 pieces on the subject it is pretty clear that nothing at all is clear about it.

    Maybe the robots will take all of the jobs. Maybe they will only take the 'bad' jobs that we don't want to do. Or maybe we will have to someday co-exist with our robot masters.

    Or maybe people and our unique ability to connect with other people will continue to be an important competitive differentiator in a world where we seem more and more inclined to develop and implement technology to remove people from business processes. Tale a look at an excerpt from a piece in Fortune last week about how the home improvement and supply giant Lowes is rethinking the importance of real, live employees in delivering better customer service, (emphasis mine)

    The company (Lowes) said its adjusted profit was $1.57 per share, below analysts' average estimate of $1.61, according to Thomson Reuters I/B/E/S, while net sales climbed 6.8 percent to $19.50 billion, short of forecasts for $19.53 billion. Comparable sales rose 4.5%, well below the result posted last week by Home Depot, suggesting Lowe's continues to struggle to capitalize on the housing boom compared to its nemesis.

    But the home improvement retailer thinks it has found a solution: increasing hours for store workers to improve customer service.

    "While our results were below our expectations in the first half of this year, the team remains focused on making the necessary investments to improve the customer experience," CEO Robert Niblock said in a statement. He added: "This includes amplifying our consumer messaging and incremental customer-facing hours in our stores." 

    'Incremental customer-facing hours' might be the worst possible CEO-speak for 'putting more employees on the floor' but the real point can't be lost in the gobbledy-gook. If you have ever shopped in a Lowes or similar big-box format store you know that actually finding a customer service employee to help you with a question or to get help locating an item can be a daunting task. It seems so obvious that increasing staffing, hours, and enhancing the knowledge of store associates would likely drive significant increases in customer satisfaction, sales, and longer term loyalty.

    But in the last several years most businesses like Lowes have seemed to focus energy and investment in all things digital - better websites and apps, self-checkouts, and even in Lowes case - actual robots that work in the stores.

    But maybe, still, consumers see the value, understanding, and empathy that only people can provide. Maybe in a world where it seems like most of your competitors are moving towards ecosystems and processes that remove people and increase automation that actually providing old-school, in-person, and expert customer service, (from human employees), can still be a source of competitive advantage.

    Really interesting times we live in where increasing customer service employees to improve a customer service problem seems like a bold, innovative, out of the box strategy.

    Have a great week!

    Wednesday
    Aug232017

    Tenure and Unhappiness at Work

    Caught some interesting data looking at the happiness and satisfaction with work of employees in the UK broken down by different age cohorts. As reported in Bloomberg, UK workers aged 35 years and up were twice as likely to be unhappy with work as their younger, millennial colleagues.

    Here's a quick look at one data set from the research conducted by Happiness Works and Robert Half UK about employee unhappiness distributed across age groups:

    According to this data, unhappiness at work takes a pretty decent sized step up in the 35 to 54 age group and increase a bit more with the 55+ group. Couple of small/medium/big things to think about before we take this data totally at face value.

    One is just what do we mean by 'unhappiness?' Is it 'kind of had a bad day that day' unhappiness or is it 'I am about three minutes away from quitting and smashing the printer on the way out the door' unhappiness? And second, what is the 'normal' or expected amount of unhappiness we'd expect to find in an average workplace? I can't think of any scenario when you get a large group of people in any kind of shared endeavor where some of them wouldn't be happy. Even a few folks I heard from yesterday thought the Great American Solar Eclipse was a little underwhelming.

    But getting past those concerns for a second, let's think about the implications of increasing unhappiness as the workforce ages a bit more. If true, or even kind of true, this could be an issue for more and more workplaces and more and more leaders of HR and people.

    Here's some more data, courtesy of my pals at the BLS. From 2015, a quick look at the median age of the US workforce, and some projections out to 2024

    How about that? The US labor force is trending older, and the trend is expected to hold for the next decade if not a little longer. So if workforces are getting older and unhappiness with work seems to be associated with the employee's age, then you could expect even more acute challenges to come with respect to happiness and its cousin employee engagement.

    The problem of course with aging in the workforce is that it is pretty similar to our own personal battles with aging and its effects. It happens, or seems to happen, so gradually that we hardly even notice it. And then Wham! all of a sudden we have gotten older. And we usually are not prepared for that day.

    If you are someone who has some concern or responsibility for the health, wellbeing, happiness, and productivity of a workplace you probably ought to be thinking about these issues a bit more than you have in the past.

    And it probably wouldn't hurt to take time to think about your own happiness and wellbeing too.

     

    Friday
    Aug182017

    CHART OF THE DAY: There are more job openings in the USA than ever

    I know I have written a couple of versions of this post in the last year or so, but to me, and as the data referenced in the post title keeps increasing, I think it is worth taking a look at the latest job openings data.

    As always courtesy of our pals at the BLS and using the fantastic charting capability from the St. Louis Fed.

    Here's the chart showing the total number of non-farm job openings in the US over the last 10 years or so and hen some words of wisdom and whimsy from me as we get ready to head into the weekend.

    Three quick takes...

    1. It may be hard to see on the chart, but the end of June 2017 data point shows a whopping 6.2 million open jobs in the USA. That is the record high for this measurement since records began to be kept starting in 2000. To give the 6.2 million number a little context, the total US labor force at the end of June is just over 160 million. Said differently, if we could magically fill the 6.2 million openings today, total US employment would jump almost 4%. That is a huge, huge number when talking about this kind of data.

    2. Wages, while growing, are not yet, (maybe never?), catch up to the fact that job openings keep increasing and time to fill metrics also continue to climb. I caught a quote from a random Fed official recently, can't remember which one at the moment, that essentally said something like 'If your business has a hiring problem or you think you have a 'skills gap' problem, and you have not taken steps to meaningfully increase wages and benefits you are offering, then I just don't believe you actually have a problem.' Persistent sluggish wage growth has been the most baffling element of the sustained labor market recovery of the last several years.

    3. I know this is obvious, and I know I have blogged this bit a few times before when considering the tight labor market, but it bears repeating. More and more power is shifting to employees, candidates, graduates - almost anyone with up to date skills and a desire to succeed. Factor in the myriad ways for people to side hustle, and employers have to continued to raise their game and their value props to have any chance of staying competitive in today's market. I am a 'labor' guy at heart, and more leverage and negotiating power shifting to workers just feels like a decent thing to me.

    Have a great weekend all!

    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!