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    Entries in workforce (75)

    Friday
    Apr132018

    No more philosophy majors?

    For a 'I can't believe it's mid-April and my flight is probably going to get canceled because it is STILL snowing Friday', an interesting piece of news from a couple of weeks ago on how one university is seeking to re-align many of its programs of study with its assessment of labor market changes and trends.

    The TL;DR version?

    No one wants to hire History, English, or Philosophy majors. (I am not sure that this is actually true by the way, but that seems to be the conclusion). Here's some details from a recent piece in Fortune on what the University of Wisconsin at Stevens Point is proposing:

    One university doesn’t think its students need to pursue English as a major anymore. Or philosophy, history, or Spanish.

    The University of Wisconsin at Stevens Point has proposed dropping more than a dozen majors currently offered through its humanities and social sciences departments. The university would instead offer programs with “clear career pathways.".

    Included in the list of majors to be dropped are the above mentioned history, English, and philosophy as well as programs in geography, (who needs that when we have GPS?), political science, (that seems like it would be in demand these days), and American studies, (that actually sounds really interesting to me).

    Other programs to be expanded or created in this effort to better align the University's programs with what is or at least seems to be happening in the job market include chemical engineering, finance, marketing, (Is there really a shortage of marketers?), and geographic information science, (sounds like geography).

    While this is not really a remarkable or surprising bit of news, I do find it interesting when thinking about what many smart folks seem to say about how work is changing, how automation and AI are replacing (or augmenting), many kinds of labor and roles, and what are the true skills all workers will need to be successful and employable in the robot future.

    And by that I am talking about the kinds of human skills and traits that can't easily or perhaps shouldn't be replaced by machines or algorithms - creativity, empathy, emotional understanding, appreciation of (yes I am saying it), history and philosophy. Sure, the kinds of 'hard skills' and technical programs that this university wants to emphasize are currently in demand, but like many (or all) kinds of technology and science roles, the likelihood of automation and more advanced AI tools replacing them (or at least reducing the need for some human labor) in them is pretty high.

    I am not totally sure what 'Geographic information science' is, but I would be willing to bet that technology will be able to perform lots of what that role requires much sooner than any kind of technology would be able to think, reason, assess, and communicate like a talented philosophy graduate.

    And by the way, if I was looking for new marketing talent, I might prefer a philosophy major or a sociology major anyway.

    Figuring out what kinds of skills are going to be needed and in demand in a changing and dynamic labor market is certainly not easy, and I understand that universities also have practical challenges and have to produce and offer programs that will attract students, (and parents).

    But while there is a lot of data and science that shows where the (current) jobs are there is also some art to producing the kinds of talent that will best be able to help the economy thrive.

    And we probably can't do art, at least not well,  if we stop teaching art.

    Have a great weekend!

    Monday
    Apr092018

    Is every company soon to be an 'Artificial Intelligence' company?

    A few years back the quote 'Every company is a technology company' made the rounds on social media and in presentations on the workplace, the future of work, and in probably too many TED talks to try and compile.

    But while some work and workplace sayings, at least to me, don't necessarily become any more true just because they are repeated all the time, ('Culture eats strategy for breakfast', I am looking right at you), this notion of just about every kind of organization becoming much more reliant, dependent, and committed to more and more advanced technologies as a means to survive, compete, and thrive still seems valid to me.

    Can you think of any business, small, medium, or large, that has not had its processes, products, services, communications, administration, customer service, and marketing significantly impacted by new technology in the last decade? Aside from perhaps a few of the very smallest, local service businesses, I can't really think of any. And even those kinds of places, say like a local barbershop or pizza joint, are likely to have a 'Follow us on Facebook' or a 'Find us on Yelp' sticker in the window.

    I thought about this idea, of every company being a technology company, again recently when I saw this piece on Business Insider - 'Goldman Sachs made a big hire from Amazon to lead its Artificial Intelligence efforts'. While it isn't surprising or revealing at all to think of a giant financial institution like Goldman being transformed by technology like so many other firms in all industries, this specific focus on AI technology is I think worth noting.

    Here's an excerpt from the piece:

    Goldman Sachs has hired a senior employee from Amazon to run the bank's artificial-intelligence efforts.

    Charles Elkan has joined Goldman Sachs as a managing director leading the firm's machine learning and AI strategies, according to an internal memo viewed by Business Insider.

    Elkan comes from Amazon, where he was responsible for the Artificial Intelligence Laboratory at Amazon Web Services, according to the memo. He previously led the retailing giant's Seattle-based central machine-learning team.

    "In this role, Charles will build and lead a center of excellence to drive machine learning and artificial intelligence strategy and automation, "Elisha Wiesel, Goldman Sachs' chief information officer, wrote in the memo. "Charles will work in partnership with teams across the firm looking to apply leading techniques in their businesses."

    The key element I think to the announcement of Goldman's new AI hire is meant to work with groups across the entire business in order to find ways to apply AI and Machine Learning technologies. Almost as if Goldman is not looking to create the 'AI Department' akin to the classic 'IT Department' that exists in just about every company, but rather to find ways to infuse specific kinds of tech and tech approaches all over the company.

    And thinking about AI in that way, much differently to how most companies have looked at most of the major technological advances in the past is what leads me back to the question and title of the post. If the Goldman, (and plenty of other companies too) example of looking for ways to embed AI technology and techniques all across their businesses, then it is not really a stretch to suggest at least in some ways they are seeking to become 'an AI company' at their core.

    What's been the most significant single technology advance in the last 25 years or so that has done more to change how work and business get done?

    Email?

    The web?

    Mobile phones?

    Probably some combination of these three I would bet. And has any company you have known decided to 'brand' or consider themselves 'an email company?' Or a 'mobile phone' company? 

    Not really, these were just tools to try and get better, more efficient, more profitable being whatever kind of company they really were.

    So I think the answer to the 'AI question' for Goldman, or for anyone else going all in with AI at the moment is 'No', we aren't really trying become an Artificial Intelligence company. We probably should just consider AI and its potential as just another set of tools that can be leveraged in support of what it is we are really trying to do.

    Even if it is tempting to try and create the latest management/workplace axiom.

    Have a great week! 

    Monday
    Mar192018

    What the Toys R Us meltdown reminds us about workforce trends

    By now you probably have seen the sad news that Toys R Us is in bankruptcy, and is facing the likely closure of its 700+ stores in the US in the coming months.

    Definitely a sad day for many, especially for the thousands of Toys R Us employees soon to be out of work, and for the let's say 'traditionalists' among us who still enjoyed shopping for toys and games and the like in the 'real world', and not just from an Amazon app.

    Of the many reasons that have been blamed for Toys R Us demise, competition from Amazon (and others) is frequently cited, along with the pretty staggering amounts of corporate debt and debt service payments that Toys R Us has been burdened with since its acquisition by Private Equity companies in 2005. Other post-bankruptcy analyses have pointed to Toys R Us failure to modernize its shopping experiences, inability to grasp digital commerce trends, and the fact that they lost touch with their most important customer - mothers shopping for their kids.

    But there is one other factor that has contributed to the toy retailer's plight, one that has not been mentioned as much in the coverage, and one that has much wider implications in work and workplaces as well. And it is this: people in the US are having fewer children, thus creating fewer of Toys R Us' prime 'end customers', and, eventually, fewer entry-level workers for all US firms to recruit.

    Here it the thing, the folks running Toys R Us maybe couldn't figure out what to do about this trend, but they did see it coming. Here is an excerpt from their most recent 10-K financial filing from April 2017:

    "Most of our end-customers are newborns and children and, as a result, our revenues are dependent on the birth rates in countries where we operate," the filing reads. "In recent years, many countries' birth rates have dropped or stagnated as their population ages, and education and income levels increase. A continued and significant decline in the number of newborns and children in these countries could have a material adverse effect on our operating results."

    Data from the CDC in the US backs that up - the most recent data available from 2016shows the US birth rate hitting a record low, and with no obvious sign of this trend changing, retailers like Toys R Us are going to face continuing pressure. Longer term, if this trend does continue, all kinds of employers will face pressure too - a different kind of pressure perhaps, this one stemming from relatively fewer entry-level or younger candidates, as well as the need to create workplaces that are more open, accommodating, and available to older workers too.

    Since I love charts, I will close with this one, from our pals at FRED - a look at the increase in the 65+ labor force in the US over the last 20 years or so.

    I will spare you trying to squint at the small print, but the total number of workers aged 65+ has more than doubled since 2000 - with almost 10M people in that group as of the latest data. And even if you can't read the small print, it is easy to see the 'up and to the right' trend in the data.

    Fewer babies and young kids means trouble for Toys R Us in 2018. It could mean recruiting problems for your organization too, in a few years. Don't wait until it is too late, like our pals at Toys R Us, to know how to react.

    Have a great week!

    Thursday
    Feb152018

    The changing mix of employee compensation increases

    TL:DR - More and higher one-time bonuses, fewer and less annual salary/wage increases

    In the aftermath of the recent tax reform legislation passed by the US Congress and signed by the President, you certainly must have noticed a pretty long list of major organizations who reacted to the reduction in the US corporate tax rate by (among other things), awarding bonuses (oddly, almost all exactly in the amount of $1,000) to their employees.

    Here is just a short list of select companies who have shared this windfall with their employees in the form of one-time bonuses:

    Alaska Air, American Airlines, AT&T, Bank of America, Comcast, Disney, Home Depot, Lowe's, Southwest Air, Walmart, Waste Management - and there are lots more.

    The companies above, (and plenty others) have directed the employee rewards portion of their expected tax cut windfall to these one-time bonuses, while a few others (Aflac, Boeing, Cigna, FedEx, Honeywell, UPS, Visa), have either supplemented these one-time bonuses with other employee rewards improvements - increases hourly wages, 401(k) contribution enhancements, and/or stock-based rewards.

    But the vast majority of publicly announced employee rewards increases as a result of the corporate tax cut have been these seemingly ubiquitous one-time $1,000 bonuses. It is almost odd, (and if you are a conspiracy lover, curious), that so many companies in different industries all settled on this same bonus amount. Weird...

    But these tax cut bonuses also draw our attention to a larger trend in employee compensation increases, one that pre-dates the recent surge in one-time tax cut bonuses - the trend of companies allocating more payroll budget towards one-time and variable awards, and relatively less budget to annual (and in theory, recurring), salary/wage increases. Said differently, more and more of the compensation increase that an average worker might see is tied up in discretionary and variable methods, like one-time bonuses. Check out this chart from a piece in the NY Times, reporting on an Aon Hewitt study of the topic:

    Back in 1991, for example, variable pay (like one-time bonuses) took up about 3% of total compensation budgets, while the budget for annual salary increases was 5%.

    Fast forward to 2017 and the amount of budget allocated to one-time bonuses has risen to 12.7% while the amount earmarked for annual salary increases has fallen to 2.9% (the 'getting 3%'ed to death phenomenon).

    A closer look at the data shows that after taking an expected financial crisis/recession dive in 2008/2009, compensation budget allocations have not really recovered to their pre-recession levels, while the budget for one-time bonuses and awards has continued on a slow and steady climb. This makes sense for a few reasons. The harsh economic environment from the recession era is still on many CEO's minds, and the need to be more flexible and adaptable, (especially when it comes to employee compensation), has become standard operating procedure and many companies. E

    Given these recent tax cut bonuses play into that line of thinking - CEOs can't be sure these tax cuts will be permanent, a change in control or philosophy of Congress could alter the landscape at almost any time. Giving one-time bonuses instead of 'permanent' salary/wage increases allows companies to respond to market, competitive, and economic conditions in almost real-time, whereas granting (and potentially removing), salary/wage increases is a much more difficult challenge to manage. Have you ever known any worker who will accept a salary or wage cut cheerfully?

    But beyond that, companies still need to keep worker's desires in mind, after all the labor market remains extremely tight. The Times reports that a second Aon Hewitt survey showed that when asked what they wanted their companies to do with their tax cut windfall 65% of them said they wanted a pay raise, far more than other options like a bonus or an increase to the 401(K) contribution. Interesting stuff for sure.

    Compensation is a tough job for sure. And oddly, it doesn't get that much easier when there are more dollars to spread around.

    Have a great day! 

    Wednesday
    Feb072018

    UPDATE: On striking for a 28-hour work week

    A few seeks ago I shared the story of the largest metal and steel worker's union in Germany whose members were threatening to strike for the right (among other things) for the ability to reduce their work week to 28 hours per week for up to two years at a time - mainly in times where a worker has increased child or elder care responsibilities. As a reminder, this is what the steel workers were trying to accomplish:

    Workers have downed tools at more than 80 companies across Germany as the country’s biggest union stepped up its campaign for a 28-hour working week to allow employees to improve their work-life balance.

    In what is shaping up to be the biggest industrial dispute in the metalwork sector in three decades, more than 15,000 employees took part in warning strikes at factories including those of the carmaker Porsche.

    The IG Metall union, which represents around 3.9 million workers, wants every employee in the metal and electrical sector to have the option to reduce their working hours for a total period of two years, with the automatic right to return to full-time employment afterwards.

    In mid-January I offered the take that we shouldn't look at these worker's demands as another example of the 'soft' or laissez-faire approach to work that we in the US like to think is common in Europe, and let ourselves believe that these kinds of increased worker calls for more benefits (including fewer hours potentially), could not become an issue here eventually. Workers in all kinds of industries likely have more power than they are currently exercising.

    Fast forward about three weeks - how did it turn out in Germany?

    UPDATE - German metal workers union secures right to 28-hour work week.

    From the piece in Business Insider:

    A German industrial union has won its workers the right to work just 28 hours per week in a deal that could eventually impact almost 4 million people in the country.

    IG Metall, the biggest trade union in Germany for metal and engineering workers struck the deal which will allow staff to go down from 35 hours to 28 hours per week for as long as two years, in instances where they need to care for children, elderly, or sick relatives.

    The agreement between the union and industry impacts some major, global manufacturers like Porsche, Airbus, and Mercedes, and also includes a 4.3% pay rise for the workers. It is a pretty major win for the workers, who seem to have gotten just about everything they were looking for in the deal.

    Why does this matter, especially to US readers, in a time where unions and labor rights movements in general have been declining for ages?

    I would say to think about this deal, and why the workers were looking for it, as less of a 'union' issue and more of a work/life issue. One of the major benefits of the so-called 'gig' economy is the schedule control that most gig workers have. There is a tremendous amount of flexibility and even power that comes with being able to self-determine how many hours you will or can work in a given day or week or month. Some times you want/need to work more, and other times fewer hours. Especially when dealing with child, elder, or other personal responsibilities.

    This effort by the metal workers union is really an attempt to try and marry some of the best features of the 'regular' employee (steady pay, benefits, some level of security, commitment to one company), with the 'gig' worker economy, (flexibility, work/life balance, control and freedom).

    Gig working is not for everyone. It can be uncertain, scary, can have pretty major fluctuations in compensation and benefits. And 'regular' work also has its downsides - lack of schedule control, long hours, stress about work/life. So what the German metal workers are really trying to do is find a kind of compromise between the two - by crafting a design where they are still 'regular' employees, but have more flexibility to determine when they need to reduce (or increase) their working hours based on personal and family circumstances.

    That is the way to think about this story if you are a business or HR leader in the US or anywhere really - this is not about the union or some kind of Euro-socialist approach to work.

    It is about workers trying to find the 'right' kind of work/life balance and arrangement that fits for them in the modern world. And it is about companies trying to find ways to ensure their goals can also be met, knowing that for most of them, these goals can only be met through the success and well-being of their workforces.

    Have a great day!