Human Capital Intel - 7/16/2024
Higher retention creates engagement risk | Middle manager disengagement | Work friends | Aging's effect on leadership
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
Higher retention rates create yet another risk to anemic employee engagement
As the frenetic pace of job-hopping during the pandemic gives way to what some economists term the "big stay," employers face a new challenge: maintaining engagement in an era of stagnating career mobility. The Wall Street Journal reports a significant decrease in employee turnover, with promotions slowing across the board.
This new workplace dynamic, while reducing recruitment costs and the chaos of constant hiring, inadvertently fosters a workforce feeling trapped in their current roles. This sentiment of stagnation is potentially detrimental to employee morale and productivity, as workers grapple with limited upward mobility and the dim prospects of significant career advancements.
Companies are increasingly aware of the growing dissatisfaction among their ranks and are adopting tactics like job swapping and short term projects to mitigate these feelings of malaise. However, the effectiveness of such strategies in sustaining long-term engagement remains uncertain. The decreased turnover rate, as reported by Aon, suggests that while companies retain more employees, they also risk accumulating a workforce that might be less dynamic and potentially more complacent.
Middle managers have the keys to the organization, but are increasingly as dis-engaged as their workers
Middle managers, often heralded as the linchpin of organizational effectiveness, are finding themselves increasingly disengaged, mirroring the sentiment of the workers they are meant to lead. This burgeoning issue of disengagement among middle management poses a significant risk to organizations, particularly in navigating the complex dynamics of today’s workforce, which is characterized by a notable decline in front-line turnover and a widening skills gap.
This emerging "Great Detachment," means that both workers and their bosses are increasingly disconnected and checked out. This detachment is not only a reflection of the individual's sentiments but also a systemic issue that stems from a lack of support and empowerment from the upper echelons of management. While middle managers are pivotal in addressing front-line challenges such as high turnover and customer service issues, they require more than the “recognition of their strategic importance” they often receive from leadership —they need actionable support and resources.
Quote of the Week
“The very best people want new experiences…They want a career path, and they want to be promoted.”
—Kevin Conroy, CEO of Cologuard-maker Exact Sciences, on what it takes to engage employees
Reading List
When is it time to go? Leadership and aging come into the spotlight
The question of leadership capability and cognitive decline is becoming increasingly pertinent in America's aging workforce, with the number of workers aged 75 and older projected to double by 2030. As high-powered professionals extend their careers beyond traditional retirement ages, companies face the challenge of ensuring effective leadership while navigating the sensitive issues of age-related performance decline. The stakes are high, with more than half of U.S. private businesses owned by individuals over 55, according to research by Project Equity.
Younger employers are increasingly excited for work friends in an exploitable trend for RTO strategists
In the wake of pandemic-induced isolation, a new trend is emerging among younger workers: a strong desire for workplace friendships. This shift is particularly pronounced among teenagers entering the summer job market, who are prioritizing social interaction and community over pay. Employers are responding by adapting their recruitment strategies, offering flexible schedules, and creating environments that foster socialization. This trend presents an opportunity for companies to attract and retain young talent in a competitive labor market.
Study finds performance monitoring can lower output
Recent research from Cornell University suggests that artificial intelligence tools designed to monitor employee behavior and productivity may have unintended negative consequences. The study found that such monitoring can lead to decreased productivity and increased employee turnover rates, challenging the conventional wisdom that closer oversight leads to better performance.
How to keep up rather than drop out of the race to exploit AI efficiencies
HR is experiencing a deluge of AI-powered tools, with new offerings emerging daily. This rapid proliferation is overwhelming HR professionals, who are struggling to assess and adopt the most effective solutions amidst the noise. The challenge is compounded by the pressure to stay competitive and prove HR's strategic value to the organization, making the adoption of AI tools a high-stakes decision.
Stat of the Week
In Other News
Employees today think about work differently. That’s why having a great learning and development program is so important. (Built-In)
Booz Allen Hamilton’s AI upskilling program tackles needs across the spectrum of AI work. (HR Brew)
The US Housing Crisis Is Really About Low-Wage Jobs. (Bloomberg)
One-third of US adults have little to no confidence in higher education, poll finds. (HR Dive)
Talent Density: Solution to a Tough Labor Market or Just Another Buzz Phrase? (LinkedIn)
The Noncompete Clause Moves Deeper Into Limbo: Two court rulings this summer could prolong uncertainty over noncompete agreements, which the FTC aims to ban starting in September. (Wall Street Journal)
Nearly half of HR professionals are new to their role - yet CEOs lay L&D and management at their feet, report shows. (HR Dive)
The Supreme Court Blows Up a Popular Small-Business Succession Plan. (Wall Street Journal)
Showing up to work late is more accepted in new hybrid arrangements. (WorkLife)
White-Collar Work Is Just Meetings Now: The meeting-industrial complex has grown to the point that communications has eclipsed creativity as the central skill of modern work. (The Atlantic)
Gen Z want to live in expensive cities—instead of moving to the outskirts, their parents are paying their rent. (Fortune)