Human Capital Intel - 8/27/2024
Declining data reliability | Managers don't want to manage | Working hard won't get you ahead anymore | Big teams = less innovation
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:
Unreliable labor market data undermines confidence, casting a shadow over the economy
Usually Bureau of Labor Statistics (BLS) data releases are a fairly sleepy affair, providing insight only into specific Wall Street traders, economists, and the occasional newsletter writer. However, last week the BLS revision of job market numbers cast a long shadow over the reliability of economic data at large, as it revealed the labor market actually created over 800,000 fewer jobs last year than previously reported.
For the less-economically inclined, the reliability of such data is felt, not seen. Labor market figures play a critical role in understanding, forecasting and planning from hiring and wage decisions to the Fed’s interest rate cut timeline.
The BLS’s largest revision in 15 years is particularly concerning given the Federal Reserve's reliance on labor market strength as a key factor in keeping interest rates higher for longer. The Fed's strategy of holding off on interest rate cuts, justified by what appeared to be a resilient job market, now seems to have been based on flawed data, raising questions about what other surprises might be hiding in the numbers.
When data is broadly in line with forecasts - a pre-pandemic memory - it allows banks to open up more funding, and businesses to plan confidently. Yet increasingly, the data we’ve used to make decisions, from hiring to capital expenditure, is increasingly “noisy”, or full of unclear, ambiguous indicators that don't allow for a clear understanding of businesses’ external operating environment.
Read more about the causes and consequences of declining data reliability.
Your managers don't want to manage anymore
A silent crisis is unfolding in corporate America: managers are increasingly reluctant leaders. Gartner's research reveals that nearly a quarter of managers would prefer not to oversee people, while simultaneously being responsible for triple the number of direct reports compared to 2017. This reluctance is reflected in leadership outcomes, with Perceptyx reporting that 25% of employees rate their current boss as their worst ever, despite 70% of middle managers claiming to act on employee feedback.
This managerial discontent stems from intensifying pressures from both above and below. Caught between heightened expectations from leadership and growing demands from subordinates, managers feel ill-equipped and overwhelmed. The traditional career ladder, which often equates advancement with management roles, is proving to be a flawed model for many professionals.
Read more about how managerial misery is leading to the trend of “unbossing”.
Quote of the Week:
“You don’t want to say, ‘I cannot take more work right now’ because it makes you look weak.”
—Yuliya Lavysh, a former Bank of America employee, on why her colleagues felt pressure to work more hours than company policies allowed
Reading List:
Back office blunders and a disconnect for core ROI
The recent decline in Diversity, Equity, and Inclusion (DEI) job postings, as reported by Lightcast, reveals a deeper issue plaguing many corporate back-office functions. While the 43% drop in DEI jobs since August 2022 is attributed to political backlash, it also reflects a pervasive “value-add” problem faced by support departments. The function, and related positions, rose on the back of public pressures, but never established a positive corporate role. The function defended its existence with the thin business rationale that “diversity leads to better profit” which originated from a now discredited McKinsey study.
Read about the struggle for the back office to prove tangible value on KenStibler.com.
Employees increasingly believe that working hard won't get you ahead
A growing disillusionment with the traditional "work hard, get ahead" ethos is sweeping through the professional landscape, as employees increasingly question the link between long hours and career success. Companies clinging to outdated notions of visible effort as the primary indicator of dedication may find themselves losing top performer “workhorses,” especially as research suggests that self-promotion and strategic visibility often trump sheer hard work in career advancement. As a result, both employees and employers are being forced to reevaluate what it truly means to "work hard" in the modern professional landscape, with a growing emphasis on impact, relationships, and strategic career management over simple time investment.
Read more from the Wall Street Journal.
Larger teams sharply reduce innovation
Recent research suggests that bigger isn't always better when it comes to team size and innovation. A new study finds that as team size increases, not only does innovation suffer, but individual career prospects within those teams also diminish. The research should prompt a rethink of team structure when innovation is the goal, especially for executives who have long subscribed to the notion that larger, more diverse teams are the key to breakthrough thinking.
Read more in the Financial Times ($).
Core hours with flexibility offers a realistic RTO compromise
Employers may have stumbled upon a viable compromise to address the ongoing resistance to return-to-office (RTO) mandates. Recent job platform data shows a growing trend towards offering employees "core hours" - a model where staff are required to be present during specific periods but have the liberty to complete their work on their own schedule outside these hours. A Flexa analysis reveals that job postings offering "a little flexibility" - allowing employees to slightly adjust their start or finish times while maintaining regular hours - have more than tripled compared to the previous year.
Read more in the HR Dive.
Data Point:
-9%
The drop in employee happiness from May 2020 to now as measured by BambooHR’s employee net promoter score
In Other News:
You Can’t Close Skills Gaps Without Labor Market Data. (Beamery)
How to identify and overcome labor shortages in the supply chain. (SBEC)
Suddenly, Hourly Workers Aren’t So Hard to Find. (Wall Street Journal)
Employee underperformance increasingly cited for layoffs as job market cools. (HR Dive)
After a Pay Boom, Raises Are Shrinking. (Wall Street Journal)
California is one of the worst performing job markets in the US, adding only 5,400 Private-Sector Jobs Since 2022. (Bloomberg)
The Great Detachment is looming for employees, experts warn — especially for Gen Z. (Business Insider)
‘FOMO’ at work may be a key risk factor for burnout. (HR Dive)
Why should an employee be allowed to resign instead of being fired? (USA Today)
What HR should know about Colorado’s new AI law. (HR Brew)