Human Capital Intel - 5/8/2024
White collar career insecurity | Cost reduction vs strategic workforce planning | Workplace misinformation | Title inflation | Bottom-up AI adoption
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 Reyvisum Analytics
What’s Working
Anxiety and technology stalk the white collar workforce
White-collar workers are increasingly finding themselves grappling with a confluence of anxiety, technological advancements, and ongoing workforce changes. The once-stable realm of professional careers is now fraught with vulnerability and scarcity, leaving many workers anxious about their future prospects.
The COVID-19 pandemic accelerated the shift towards remote work and digital collaboration, eroding the stability of white-collar careers. Now, the rapid adoption of artificial intelligence and automation is transforming the nature of white-collar work, rendering many traditional roles obsolete or easily replaceable. Recent reports indicate that AI adoption will drive layoffs in 2024, with 50% of tech leaders anticipating AI-driven layoffs, buried under the guise of cost reductions, efficiency gains, and “rightsizing”.
The five-year plan? Forget it. Five months is more practical. The combination of Covid and ChatGPT has shortened the time horizon against which we work.
— Bloomberg News
As businesses seek to streamline operations and reduce costs, the demand for certain skilled positions is diminishing, leading to a growing sense of job insecurity among professionals. This trend is particularly evident in industries such as finance, law, and administration, where AI-powered tools are capable of performing tasks previously reserved for human workers.
The scarcity of white-collar jobs is also exacerbated by the growing skills gap, as the demand for tech-savvy professionals outpaces the supply. While new jobs are being created in tech, they often require skills and experiences beyond what office workers currently possess.
Talent gets caught between cost reduction and strategic planning
Talent acquisition (TA) professionals find themselves in a challenging position, torn between the demands of strategic workforce planning and the pressure to reduce costs, according to a recent report from The Josh Bersin Company and AMS. Despite the crucial role TA plays in securing skilled workers, only 32% of TA leaders feel they are treated as strategic partners within their organizations.
This disconnect is further inflamed by the ongoing skills shortage, with 60% of TA leaders citing it as their top concern. Simultaneously, 58% face tremendous pressure to improve the efficiency of recruiting processes, often at the expense of long-term strategic planning. The lack of a clear workforce plan in 42% of companies, and the reluctance of nearly half of HR leaders to adopt “strategic hiring” compounds the issue.
TA leaders also grapple with the need to enhance the skills of their recruiters, with 42% acknowledging the need for more training. However, the prioritization of cost-cutting measures over strategic talent acquisition poses a significant barrier to providing the necessary training and development.
Reading List
Title inflation becomes more common
In a bid to attract and retain talent, companies are increasingly resorting to title inflation, bestowing impressive-sounding titles on employees with relatively little experience, the Wall Street Journal reports. A recent search on Indeed's job board revealed over 8,000 entry-level openings with the keyword "senior," indicating that title inflation has permeated even the lower ranks of the corporate world.
Read more about why businesses are inflating entry-level job descriptions.
Despite falling inflation, wage gains continue to rise in 2024
As the Federal Reserve grapples with lingering inflation concerns, new data released on Tuesday reveals that worker pay gains have accelerated faster than anticipated in the first quarter of 2024. The Employment Cost Index (ECI), a comprehensive measure of employer spending on compensation, rose 1.2% in Q1, surpassing expectations and outpacing the 0.9% increase seen in the previous quarter.
Read more about the drivers and implications of faster wage gains.
Successful AI adoption requires a bottom-up process
As companies rush to harness the potential of Generative AI, centralized control under a designated "AI czar" may seem like the obvious approach. However, history has shown that this top-down structure often fails to deliver the desired innovation, according to Harvard Business Review. Instead, successful AI adoption requires a bottom-up process that empowers frontline teams to identify opportunities within workflows and drive innovation.
Read more about how employee mindset is critical to capture AI-driven advantages.
Social media misinformation raises workplace cynicism among young workers
A recent viral TikTok - GenZ’s Facebook - which has garnered over 8 million views and 900,000 likes, is perpetuating the idea that being a pleasant and high-performing employee at a junior level makes employees less likely to be promoted. The video's creator, Jacqueline Morris, argues that companies may intentionally keep such employees in lower positions to maintain productivity and avoid the costs associated with hiring and training replacements, Entrepreneur reported.
Read more about how managers should respond to workplace misinformation.
Stat of the Week
In Other News
Google releases new ‘product agnostic’ AI course to help with workforce upskilling. (HR Brew)
Building a virtuous cycle of training for emerging tech. (Benefits Pro)
Why every company needs to train staff how to leave. (TLNT)
‘Get profit-loss experience’: Inside the modern (and aspiring) CHRO’s toolkit. (WorkLife)
Sharing Personal Information Can Build Trust on Your Team — If You Do It Right. (HBR On Leadership)
Overcome the 4 barriers to building a “for all” culture. (Fast Company)
Exclusive: Employers Are Souring On Ivy League Grads, While These 20 “New Ivies” Ascend. (Forbes)
How manager complicity is driving toxic workplaces. (WorkLife)
25% of Americans over 50 don’t expect to retire. How to start saving. (NewsNation)
How HR can avoid turnover following an M&A deal. (HR Brew)
What employers can expect from 2024 graduates. (WorkLife)