Human Capital Intel - 8/6/2024
Labor market losses lower cost of tech skills | AI creates complex work | Chevron decision set to drive wave of regulatory risk | MEI challenges DEI
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
White collar labor market melts down, offering opportunity for cheap tech skills
The white-collar job market is experiencing a significant cooldown, marking the end of the pandemic-induced hiring frenzy. Recent data from ADP shows that hiring for roles typically requiring a bachelor's degree has fallen below 2019 levels, with the decline particularly pronounced for workers in their 20s. This shift is leaving many recent college graduates facing a bottleneck of entry-level openings, as more established professionals cling to their current positions.
The market correction follows a period of over-hiring during the pandemic, with many companies now implementing more stringent hiring practices. Tech giants, and other corporations, are scaling back middle management and becoming increasingly selective in their recruitment processes. This tightening is compounded by growing investment in generative AI, which may further reduce demand for traditionally sought-after roles such as coders and data analysts.
Some 47% of workers who use AI say they don’t know how to use the tech to achieve their employer’s productivity goals
Despite their lack of professional experience, recent graduates often possess a natural affinity for technology, which can be incredibly valuable to employers. Having grown up in the digital age, these young professionals are typically adept at navigating new software, understanding emerging tech trends, and adapting to rapidly evolving digital environments. Their familiarity with social media platforms, cloud-based collaboration tools, and the latest mobile technologies can bring fresh perspectives and efficiencies to established business processes.
Employees claim AI complexity decreases productivity
While 96% of C-suite executives anticipate AI tools will boost overall productivity, a staggering 77% of employees report that AI has actually increased their workload. This disparity highlights a critical challenge in the integration of AI technologies across organizations.
The complexity of AI tools appears to be a major stumbling block. Only 17% of employees feel highly skilled and comfortable with their company's AI tools, compared to 37% of employers who believe their workforce possesses such competence. This skills gap is leading to overwhelmed employees, with 65% reporting that their employer's AI-related demands are excessive. Nearly half of the surveyed workers admit they don't know how to leverage AI effectively to meet their employer's objectives.
Reading List
Chevron ruling set to have lasting contribution to regulatory complexity
The recent Supreme Court decision to overturn the Chevron doctrine, a cornerstone of administrative law for nearly four decades, is poised to significantly reshape the regulatory landscape in the United States. Kenneth Jacobs, executive chairman of Lazard, argues in a Project Syndicate op-ed that this ruling, contrary to conventional wisdom, may prove detrimental to business interests and economic vitality. By eliminating the requirement for courts to defer to federal agencies in cases of statutory ambiguity, the decision opens the door to increased litigation and potential regulatory fragmentation across states.
Merit, Excellence and Intelligence (MEI) emerges as DEI pushback broadens
A new approach to hiring and promotion, dubbed MEI (Merit, Excellence, and Intelligence), is gaining traction among some business leaders as a counterpoint to traditional Diversity, Equity, and Inclusion (DEI) initiatives. Popularized by Scale AI CEO Alexandr Wang, MEI advocates for selecting candidates based solely on their qualifications and potential, without considering demographic factors. This shift comes amid growing criticism of DEI programs, with some executives arguing that true meritocracy naturally leads to diverse workforces without the need for explicit diversity targets.
Hiring reverts to more traditional ways as online applications inundate employers
The job application landscape is shifting dramatically as employers grapple with an overwhelming influx of online applications, driven in part by the ease of applying and the use of AI tools by job seekers. This digital deluge has led many companies to revert to traditional networking and referral-based hiring practices. Recent data from Greenhouse, a hiring software company, reveals that referred candidates have a significantly higher chance of advancing past initial screenings and securing positions, despite representing only a small fraction of the applicant pool.
Stat of the Week
61% of workers have quit a job because of their company’s culture, according to a report from Oak Engage
In Other News
US Payroll Growth Slows and Jobless Rate Ticks Up to 4.1%. (Bloomberg)
What does your CEO need to know about cybersecurity? (Cybersecurity Dive)
The rise of side hustles: Entrepreneurship in today's economy. (Employee Benefits News)
In the ‘arms race’ for AI talent, some employers are hiring in the wake of layoffs. (HR Dive)
Safe To Speak Up? 4 Ways To Build Psychological Safety At Work. (Fortune)
Workplace jargon reflects changing power dynamics. (Marketplace)
Amazon is cracking down on RTO holdouts and ‘speaking directly’ to employees who haven’t spent enough time in the office. (Fortune)
What HR needs to know about AI copilots. (HR Brew)
What separates genAI pacesetters from the pack. (OODA Loop)
From Burnout to Balance: AI-Enhanced Work Models. (Upwork)
College education may not be preparing employees for generative AI. (HR Dive)