Human Capital Intelligence, October 16th
Time to Hire Rises | Workers divided on skills | Remote employee engagement falls | Workplace Suicides Rise | Young employees post about wanting #LazyGirlJobs
Welcome to HCI, a roundup of the key trends affecting all things employee. The newsletter aggregates and synthesizes the most important trends, data and stories from consultancies, trade bodies, and research organizations.
I hope to make this newsletter your monthly island of intelligence in a sea of data, and I would love to hear from you at ken@stibler.me with ideas, feedback or anything else you find interesting.
Labor Markets:
Job numbers come in hot for September hinting at ‘structural’ labor shortages.
The latest job numbers for September have shown a robust increase in total nonfarm payrolls, with a notable surprise given months of prior slowdown. The unemployment rate remains at a low 3.8%. This data suggests a 'hot' job market, signaling potential structural labor shortages. However, wage growth has continued to slow, which could provide some relief for businesses concerned about rising interest rates, according to Nick Bunker, head of economic research at Indeed Hiring Lab.
Septembers figures combined with the slow increase in job vacancies from June lows suggests a long-term labor crisis is becoming increasingly evident, driven by factors such as baby boomer retirements, low birth rates, shifting immigration policies, and changing worker preferences. Even as the labor market softens, these underlying challenges are expected to persist. As a result, companies are urged to rethink their talent strategies, with a focus on tapping into underutilized labor pools, improving productivity through automation and training, and advocating for a thoughtful immigration program. Failure to address these issues could lead to further wage growth and workforce instability in the coming years, posing significant challenges for businesses.
Salary expectations come down but hiring to remain challenging as ‘time to hire’ soars.
U.S. employers are adjusting their salary expectations for 2024, signaling a return to more sustainable compensation growth. Mercer's August compensation survey reveals that employers plan to offer more modest 3.5% increases on average, down from the 3.8% seen in 2023. This moderation reflects the ongoing tight labor market and lower unemployment levels. It suggests that businesses can now breathe a sigh of relief as salary growth expectations come back down to reality, potentially offering cost-saving opportunities as the labor market stabilizes.
While salary expectations may be easing, businesses are still grappling with substantial labor challenges, notably the record-high "time to hire" rates according to the Global Talent Climate report. The average time to appoint employees has increased to 44 days on average, with certain industries facing even longer hiring cycles due to specialized roles and limited talent pools. This time-to-hire issue poses a significant hurdle for organizations. To address this challenge, companies should prioritize retention efforts in key areas like tech professionals and ensure elevated turnover doesn't become a feedback loop by punishing the remaining employees with permanent increases in workloads.
Human Capital, Training, and Education:
Employers and employees divided over attractive skills to development.
Employee turnover costs businesses significantly, with a recent study revealing a staggering $700 billion loss in 2021. To retain top talent and avoid the pitfalls of losing valuable team members, organizations must prioritize employee growth and development. Employees crave recognition of their individual goals and aspirations, and investing in their careers is crucial. Businesses that offer opportunities for continuous learning and skill advancement are more likely to keep employees engaged and committed, benefiting both the company's future and the professionals themselves.
Internal mobility jumps when employers prioritize skill building, report says (HR Dive)
A recent survey sponsored by DeVry University highlights a gap in perception between employers and workers regarding skills development. While there are differences in how they view and describe skills, there is underlying common ground. Employers emphasize the need for soft skills to navigate the complex global economy, such as critical thinking and problem-solving, leadership, and creativity. In contrast, employees prioritize hard skills and credentials like data analytics, AI, digital marketing, and software engineering. Bridging this gap is essential for organizations to thrive in the future, as they must balance the demand for both hard and soft skills in an evolving work landscape shaped by digital transformation and the pandemic's impact on soft skills development.
HR Function and Compliance:
Workplace suicides become more common, adding another hot-button issue to HR’s agenda.
Companies find themselves at the forefront of a growing mental health crisis, with post-covid years seeing concerning increase in workplace suicides according to the Wall Street Journal. Last year, nearly 50,000 Americans died by suicide, marking a 2.6% rise over 2021. Although the number of workplace suicides temporarily declined during the pandemic when remote work was prevalent, the return to office environments has seen high-profile incidents.
Employers are now grappling with the challenge of recognizing subtle signs of distress in their workforce and providing support. Behavioral scientists like Larry Barton report a notable increase in inquiries from companies seeking guidance on mental health challenges and workplace suicides. Responding to such incidents poses a delicate balance for executives, who must show compassion while respecting privacy, often referring employees to internal assistance programs. The tragic stories underscore the need for companies to prioritize employee well-being and address workplace stress and mental health concerns more comprehensively.
How to respond to employees bad mouthing the company online.
The steady rise of social media use and faux anonymity of online platforms means employees increasingly feel they can openly critique their employers. However with more eyeballs watching than ever, effective responses to these scenarios is becoming more important but also trickier to execute well. According to SHRM, it is essential for companies to respond quickly, as anonymous or public negativity can impact company culture and reputation. Strategies include holding private discussions to address concerns, responding professionally to negative reviews on platforms like Glassdoor, and conducting "temperature checks" within the organization to gauge employee sentiment. Additionally, maintaining transparent communication channels and prioritizing employee satisfaction can help mitigate external venting and foster a more positive working environment.
Once criticism has been leveled, HR should have private discussions to understand concerns and respond appropriately, including communicating the reason for any disciplinary action clearly. When facing negative reviews on platforms like Glassdoor, HR professionals should craft professional, non-defensive responses that reflect a commitment to improvement. Conducting employee surveys and maintaining open lines of communication can help identify and address issues before they escalate. Prioritizing employee satisfaction and fostering a nurturing working environment can reduce external negativity and turn employees into advocates for the organization.
Culture, Engagement, and Performance:
Remote employee engagement falls diverging from in person trends.
Recent research from Gallup reveals that while employee engagement has increased overall in mid-2023, the gains are more prominent among in-person workers, with onsite employees showing the most significant improvement. In contrast, engagement levels among hybrid and remote workers have plateaued. This may be attributed to the limited autonomy of remote-ready employees in deciding how and where they work, with only 12% having this flexibility through collaborative discussions. Furthermore, remote workers are less connected to their organizations' missions and values, with only 28% expressing a strong connection, a record low since 2011. It is evident that leaders must focus on integrating remote and hybrid workers into the company culture and fostering stronger alignment with the organization's purpose.
Employee unhappiness is on the rise, with job satisfaction steadily declining since 2020 and taking a sharp downturn this year, according to BambooHR research. This decline in satisfaction is not limited to work arrangements but is also influenced by factors such as unfair treatment, uncertainty over economic conditions, and a lack of perceived meaning in roles. The pandemic and the "great resignation" have shifted employees' priorities towards seeking meaning and connection in their work. Moreover, remote employees, in particular, feel increasingly disconnected from their workplace's mission and purpose. Employee engagement and satisfaction are not just essential for mental well-being but also impact a company's profitability, with disengagement costing the global economy $8.8 trillion in lost productivity, equivalent to 9% of global GDP. Encouraging meaningful conversations and creating a sense of belonging among employees can make a significant difference in addressing these challenges.
Meaningful work offers a free antidote to falling employee engagement.
Employee disengagement is on the rise, with Gallup's worker engagement polls showing a consistent decline in employee engagement levels over the last three years. The disengagement trend has serious implications for organizations, as it can lead to increased turnover and reduced productivity.
It's important to recognize that engagement cannot be bought through superficial perks or environmental factors. Instead, fostering purpose among employees by aligning their sense of meaning with the company's purpose is crucial. Engaging employees in the company's greater functional purpose, which is to serve customers profitably, can significantly improve both financial results and employee engagement.
To enhance employee engagement and foster purpose, organizations can consider four essential approaches: crafting employees' work to align with their passions and interests, making work a craft that challenges and improves employees' skills, connecting work to service by identifying opportunities to serve clients, colleagues, and the community, and investing in positive relationships by approaching colleagues with curiosity and empathy.
When employees are treated with dignity and empowered to contribute to the company's success, they become more engaged and motivated. By engaging employees in the economics of the business, organizations can achieve better financial results, improve customer satisfaction, and create a workplace where employees feel valued and connected to the company's purpose. Ultimately, fostering purpose-driven engagement is a powerful strategy for achieving both employee satisfaction and organizational success.
Innovation and Disruptions:
Heard of ‘lazy girl jobs’? Neither had I until I hopped on Tik Tok.
As Gen Z prepares to constitute a significant portion of the workforce, their priorities differ from previous generations. Andréa Carter, Chief Human Resources Officer at Global Payments, emphasizes that this generation values mental health, work-life balance, and flexibility in their work arrangements. They aim to exert more control over their approach to work in an uncertain job market, seeking companies that support their growth on their own terms.
The concept of "lazy-girl jobs" is gaining popularity among employees, transcending gender and age boundaries. Many individuals, not just women, are embracing roles that offer work-from-home options, accommodating supervisors, fixed working hours, and annual earnings in the range of $60,000 to $80,000. This trend, in contrast to the "lean in" philosophy, signifies a desire for a balanced and fulfilling professional and personal life. While some criticize it, proponents argue that it aligns with their pursuit of a healthier work-life equilibrium.
The rise of work TikTok for a generation of confused young professionals.
The rise of the hashtag #worktok on TikTok - the short content platform which has been the biggest social media for under 30s for years - has garnered 1.8 billion views, signifies an emerging workplace trend among younger employees. They are increasingly using this platform to share candid insights into their professional lives, openly discussing topics like quitting and salaries, and learn new skills from the cottage industry of educational accounts. The growth of #worktok highlights the need for community and mentorship, particularly in a generation that has missed out on traditional onboarding and hungers for the skills employers say they lack.
Gen Z is seeking out skills from TikTok and YouTube, but L&D shouldn’t see it as a threat (HR Brew)
While #worktok offers a unique opportunity for employees to connect and share experiences, it also presents risks. Content on TikTok is often public, allowing employers to access their employees' videos. This opens up the possibility of unintended consequences, such as accidentally sharing trade secrets, normalization of bad mouthing employers, and increased transparency around aspects of a company that many leaders might just prefer to keep private.
Despite career optimism, Gen Z workers say they’re stressed about boss expectations. (HR Dive)
The platform is not going anywhere though, so understanding and monitoring the impact of the trends and opportunities on TikTok on the workforce is becoming increasingly vital. With Gen Z set to make up a significant portion of the workforce, proactive engagement and monitoring of such platforms are essential for businesses to navigate this evolving landscape successfully.
What Ken’s Reading:
Human Capital, Training and Education
Invest in Your Team or Fall Behind – 3 Ways to Upskill Your Team with Continuous Training. (Entrepreneur)
Amazon’s Prime Perk: A Robust Upskilling Program That Trains Workers for In-Demand Jobs. (Linkedin Talent Blog)
KPMG offered video game training to some employees. They brought 16% more clients and 36% more in revenue-generating fees. (Fortune)
Walmart scraps degree requirements for some corporate jobs: The move reflects a broader focus on skills among employers nationwide. (HR Dive)
Soft skills vs. hard skills in upskilling – Bridging the disconnect between employer and employee priorities. (Reputation Leaders and Devry)
Labor Markets
Despite Economic Risks, Companies Are Hanging On to the Workers They Have: Layoffs are low even as the economy faces hurdles ranging from strikes to oil prices. (WSJ)
The ‘Hot’ Labor Market Isn’t Helping a Certain Group of Jobseekers. (WSJ)
Two-Thirds of Graduating MBA Students Still Jobless (Intelligent Analytics)
How companies can compete for top talent even as wage growth slows (HR Brew)
Walmart Cuts Starting Pay for Some New Hires (Wall Street Journal)
Despite economic uncertainty, most workers still plan to ask for a raise. (HR Dive)
Senior Citizens are increasingly applying for entry-level positions, hiring managers report. (HR Dive)
Culture Engagement and Performance
What’s Fueling Burnout in Your Organization? (Harvard Business Review)
How To Avoid Being A Bad Boss: 5 Paths To Positive Impact. (Forbes)
How Candid Can You Really Be With Your Boss? (Wall Street Journal)
Workday adds AI that recommends manager actions. (HR Dive)
Rising Wages and Plentiful Jobs: Construction has happiest workers of any industry. (HR Dive)
Don’t forget retained workers after layoffs, consulting firm advises. (HR Dive)
HR Function, Compliance, and Law
New Wiley Survey Reveals Gaps in Levels of Psychological Safety Between Employees and Executives (Wiley)
‘As simple as an email’: Recruiter ghosting signifies lack of respect. (HR Dive)
Sharing at work can be good. Oversharing is not. (Business Insider)
How long will you live? Poor ‘longevity literacy’ will hinder retirement savings. (Benefits Pro)
Employees want robust benefits, but many don’t use them. Can a chief engagement officer fix that? (Fortune)
Managers aren’t confident about their employers, but HR pros can help. (HR Brew)
Workplace Disruption
How ChatGPT Can and Can’t Help Managers Design Better Job Roles. (MIT Sloan Review)
As HR turns to generative AI, 2 ways to mitigate the risks. (HR Executive)
Technically HR: AI could reshape how employees grow at work. (HR Brew)
How Does HR Analytics Transform Workforce Planning? (Talent and Culture)
Company policies lag behind workforce adoption of generative AI. (HR Dive)
4 mistakes to avoid when calling employees back to the office. (HR Dive)
Podcast: How to Avoid Burnout in a 60-Year Career. (Wall Street Journal)
Bosses Aren’t Just Tracking When You Show Up to the Office but How Long You Stay. (Wall Street Journal)
How a Four-Day Workweek Actually Works, From the Companies Pulling It Off. (Wall Street Journal)
CNET Journalists Seek to Unionize, Saying AI ‘Threatens Our Jobs and Reputations’. (Bloomberg)
More than 40% of labor force to be affected by AI in 3 years, Morgan Stanley forecasts. (CNBC)
ChatGPT provided better customer service than his staff. He fired them. (Washington Post)
Why You Soon Won’t Be Able to Avoid AI—At Work or At Home (Wall Street Journal)