Human Capital Intel - 6/11/2024
Rapid change requires skillset renewal | Labor market weaken the economy | The 'no ownership labor market' | Salaried workers below DOL threshold
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
Rapid change means businesses and employees should align on the increasing need and importance of retraining
Despite our human instinct to expect a return to pre-covid stability, the competitive landscape is undergoing a structural transformation for employers and businesses alike. The convergence of technological advancements, shifting workforce demographics, and changing employee preferences are shredding old taboos and unlocking new potential. At the heart of these new pitfalls, and potential, lies the increasing pace of change. We can all feel it, from the speed of technological improvement to global affairs, our world is speeding up.
While this level of rapid change is certainly uncomfortable, it is far from unprecedented and certainly manageable. The process starts and ends with continuously assessing and developing our mindset, skills, and toolkit.
Specifically, the small to medium-sized businesses (SMBs) which have long relied on their nimbleness and customer centricity as core value props must recognize the key role of continuous skill acquisition and development to maintain their competitive edge and long-term success in this dynamic.
Don't let Friday’s jobs report fool you, the labor market is weakening, and the economy along with it
Despite the veneer of resilience portrayed in recent headlines and corporate optimism, the labor market is showing signs of weakness, casting a shadow over the US economy. The latest data reveals that consumer spending, which drives around 70% of the US economy, began the second quarter on a disappointing note. Personal consumption increased by a mere 0.2% in April, and when adjusted for inflation, it actually declined. This slowdown in spending, coupled with the contraction in retail sales, reinforces concerns about diminishing consumer demand and suggests that the post-COVID economic surge may be losing steam.
The foundations of consumer spending—earnings, savings, and credit—are also showing signs of stress. Real disposable income fell for the second time in three months, while the saving rate has plummeted to a 16-month low as households have depleted the extra savings accumulated during the pandemic. Rising credit card delinquency rates, although not yet at pre-pandemic levels, point to increasing financial strain among consumers. With approximately one in six credit card users utilizing at least 90% of their available credit, the ability to sustain spending through borrowing is becoming increasingly limited.
Quote of the Week
“A company’s not a family…We used to refer to ourselves as a family, and then we did have to fire people, or they’d have to leave the company, and you don’t fire members of your family.”
—Brian Chesky, Airbnb CEO, on why employees and employers shouldn’t think of their organization as a family
Reading List
Your salaried employees are over the new overtime threshold, now what?
The Department of Labor’s overhaul of overtime pay eligibility has left many employers scrambling to assess the impact on their workforce. The new rule, set to take effect on July 1, 2024, will raise the minimum annual salary threshold for exempt employees from $35,568 to $43,888, with a further increase to $58,656 scheduled for January 1, 2025. As a result, HR departments must now decide whether to convert affected employees to nonexempt status or increase their pay to maintain their exempt status.
Read more about the steps to take when a salaried employee falls below the line.
The ‘no ownership’ economy hits employment
The ‘no ownership’ economy, where consumers prefer renting over owning goods, is now making its mark on the labor market. Structural shifts, a multi-decade decline in employee loyalty, and a scarcity of quality jobs are driving more workers into part-time roles. The desire for flexibility and a better work-life balance has led many, including those in high-stress positions like CHROs, to opt for fractional work. This growing trend of part-time employment represents a significant shift in workforce dynamics, signaling another move away from the traditional full-time job model.
American summers are looking more European as productivity slumps
As the summer months roll in, Americans are quiet vacationing and dragging productivity down with them. Employees secretly taking time off without using PTO might be a shock to American managers, but it’s yet another sign of US workers adopting more European work practices. In Europe, which has long been known for its more relaxed work culture and lower corporate profits, taking extended time off during the summer is a common practice.
Quality feedback quietly becomes scarce
Managers are increasingly not providing direct, constructive feedback to their employees. This hesitancy stems from a fear of violating the psychological safety of their team members, particularly among the Gen Z workforce. As a result, the development and growth of employees are being compromised, potentially leading to a generation of leaders ill-equipped to handle criticism and uncomfortable conversations.
Read more about how unconventional talent requires flexibility but rewards in hard work.
Stat of the Week
In Other News
Onboarding New Employees in a Hybrid Workplace. (Harvard Business Review)
Work-based youth learning programs can augment talent development strategies, report says. (HR Dive)
How AI Can Make Us Better Leaders. (Harvard Business Review)
The Case For Precision Skill Development. (Forbes)
From the baby boom to the baby bust: Falling fertility rates are one of the biggest challenges facing our world. (Financial Times)
Keeping Pace with the Perceptions of Modern Workers. (Lever)
A six-day workweek could go over like ‘a lead balloon,’ says ResumeBuilder’s chief career adviser as some employers expect employees to put in more hours next year. (HR Brew)
Beyond Basic Prompts: How GAI Can Help Make You a Better Recruiter. (Linkedin Talent Blog)
How to Build the Ideal HR Team (on a Budget). (Paycor)
What is the difference between a CPO and CHRO? (WorkLife)
ACLU Asks for US Probe Into Bias of Consultant's AI Hiring Tools. (Bloomberg)
Gen Z, millennials are ‘weak link’ as AI fuels new cyberattack workplace threats. (WorkLife)
America’s Commute to Work Is Getting Longer and Longer: Drives to the office that take over an hour are becoming more common—and even more palatable. (Wall Street Journal)
US students face recruitment challenges after Gaza protests: Employers warn of tougher scrutiny following demonstrations over Israel-Hamas war. (Financial Times)
The Workers Who Do Everything on Their Phones—Except Answer Calls: Bosses and employees are wrestling over whether voice calls have a place in the hybrid era. (Wall Street Journal)