Human Capital Intel - 5/21/2024
Committing to skills-based hiring | Diverging views on AI in the workplace | CEOs go apolitical | Job seekers adopt AI | HR cyber risks
Welcome to the latest edition of Human Capital Intelligence. As always, we would love to hear from you at ken@stibler.me with news ideas, feedback and anything else you find interesting.
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By Ken Stibler; Powered by Reyvism Analytics
What’s Working
Skills-based hiring emerges as a new norm amid changing business needs
Amid a rapidly changing labor market, the traditional reliance on college degrees as a primary hiring criterion is giving way to a new paradigm: skills-based hiring. This shift is driven by the recognition that a diverse workforce, with a wide range of skills and experiences, is essential to addressing talent scarcity and boosting productivity. However, despite the unassailable logic of this approach, many companies are struggling to bridge the gap between theory and practice, with hiring managers often reverting to familiar degree-based screening methods.
To overcome this inertia, organizations must take concrete steps to equip hiring managers with the tools and guidance they need to make skills-based hiring a reality. This includes celebrating success stories, reverse-engineering the paths of high-achieving employees without degrees, clearly defining skill requirements, and providing evidence of skill mastery. Additionally, companies must redesign their onboarding and support processes to ensure that skills-based hires have the resources and social capital they need to thrive.
As the AI revolution gathers pace, the need for upskilling and reskilling becomes even more pressing. Executives and employees alike recognize that AI will fundamentally reshape the workplace, automating many tasks while creating new opportunities for those with the right skills. Organizations have a responsibility to provide their workforce with the training and education they need to harness the power of AI, whether through online learning and development programs, on-the-job training, or mentorship initiatives.
The rise of skills-based hiring and the imperative of AI upskilling are not just passing trends, but rather a reflection of the changing nature of work itself. As organizations move away from rigid job-based models and towards more agile, skills-based approaches, HR leaders will play a crucial role in guiding this transition. By becoming "skills-aware" and proactively addressing the challenges of moving along the skills-based spectrum, HR can help their organizations bridge the gap between the promise and the reality of this new paradigm.
Government gets interested as 78% of leaders anticipate AI-driven layoffs
As AI continues to make significant strides in the business world, leaders remain divided on its impact on the workforce. A recent survey by Intelligent.com revealed that a staggering 78% of hiring managers anticipate AI-driven layoffs of recent college graduates within the next year. Some even predict that up to 70% of young talent could lose their jobs, as entry-level positions often involve repetitive tasks that can be easily automated. This belief is further reinforced by the notion that AI can fully perform the job of a recent graduate.
As businesses grapple with the implications, the Department of Labor has stepped in to warn employees to implement AI transparently and with worker input. To this end, the Department of Labor has issued a set of eight "AI Principles for Developers and Employers" to create a roadmap for balancing AI's potential benefits while protecting workers from potential harm. This guidance, which drew input from labor unions and other stakeholders, underscores the growing concern among policymakers about the impact of AI on the workforce.
Quote of the Week
There are over 200,000 videos with 519 million combines views under #boredatwork on the Tik Tok social media. From screaming in a soundproof room to stirring workplace drama, employees are jokingly showcasing their lack of interest in work.
— HR Brew on the rise of “bullshit work” and employee boredom
Read More: Half of Google's white-collar staff, 'does no real work,' Silicon Valley VC says. (Quartz)
Reading List
Small businesses stay quiet amid rising election rancor
Rising costs of labor, commercial insurance, and inputs, employee benefits, capital, and rent are all taking a toll on small businesses. Yet nearly 20% of small business owners remain undecided on their presidential choice, compared to just 12% of the general public. Generally, businesses are also pulling back from political statements, preferring to stay quiet and avoid the heat from taking stances this time around.
Read more about why business leaders are staying quiet in the lead up to November.
Bots vs bots makes hiring landscape increasingly inhospitable
The rise of artificial intelligence in the job market has led to a bot versus bot war, leaving both job seekers and employers frustrated with the hiring process. Candidates, disillusioned with the lack of response from corporate hiring software, are now turning to AI tools to craft cover letters, résumés, and even automate job applications, the Wall Street Journal reports. In response, companies are deploying their own bots to sort through the influx of applications, further complicating the hiring landscape.
Read more about tech-driven degradation of the labor market.
Employee pressures persist
Despite a slowdown in wage growth and a cooling labor market, employees continue to push employers for increased benefits and compensation. The latest data from the Bureau of Labor Statistics reveals that compensation costs rose by 4.2 percent over the 12-month period ending March 2024, a slight deceleration from 2023 but still over pre-pandemic norms. However, this moderation in wage growth has not deterred employees from advocating for their interests, as evidenced by the growing demand for perks, such as a four-day work week and remote work arrangements.
Read more about how the new normal for employee expectations.
Employees prove the weak link in cyber defenses
90% of midsized businesses have reported an escalation in cybersecurity threats over the least year according to a recent survey by the Wall Street Journal. The new data highlights the growing concerns surrounding regulatory scrutiny, enforcement, and the digitization of business operations. These escalating cyber risks have exposed a critical vulnerability within organizations: their employees.
Read more about how employees pose and increasing cybersecurity risk.
Stat of the Week
In Other News
Harness the Power of Introverted People in Your Organization. (Talent Culture)
As the line between B2B and B2C marketing blurs, Workday taps humor in consumer-facing media channels. (WorkLife)
Mothers Reap Benefits of Record Part-Time Workforce Boom in US. (Bloomberg)
What is going on with wage growth in the United States? (Washington Center on Equitable Growth)
Job openings decreased 1.1 million over the year ended March 2024. (Bureau of Labor Statistics)
Pandemic Savings Are Gone: What’s Next for U.S. Consumers? (Federal Reserve Bank of San Francisco)
Here’s how to bring offsite energy back to the office. (WorkLife)
Deel partners with Carta to offer equity tax withholding features. (HR Brew)
Only 2% of CHROs say performance management systems work as intended. (HR Dive)
Senate Democrats push to keep call center jobs in US: Bill would require companies that transfer call center operations overseas to notify the Department of Labor or face fines, among other penalties. (CX Dive)
Final Fiduciary Rule advances DOL’s goal of expanding scope of ERISA fiduciary. (DLA Piper)
AI is showing ‘very positive’ signs of eventually boosting GDP and productivity. (Goldman Sachs)