Episode Transcript
[00:00:00] Hey guys, I want to bring you up to speed on something that I think a lot of you are going to get kind of excited about, and that is the job market for HR itself. There was an article in BusinessWeek that quoted Johnny Taylor from SHRM making the comment that the HR field faces extinction from AI.
[00:00:22] And I read it and I really didn't feel comfortable with it. And I did some research and discovered that actually the opposite is true. Despite all the discussions of layoffs, restructuring, eliminating routine jobs, eliminating bureaucracy, streamlining systems, whatever, the number of HR jobs is going up pretty steadily. So what I did is I went into Lightcast and I did an exhaustive analysis of all of the major O net job categories in HR that includes HR jobs, recruiters, training people, compliance specialists, HR technologists, HR consultants, a lot of related job titles, but mostly related to HR itself. And I looked at it over the last 20 years and over the last four years, over 20 years, since 2016-26, the number of postings on average has gone up around 1.6% per year. Number of job postings. Now that's not a huge number, but the number of employees, and this is US data, by the way, in the United States has gone up by 0.9%, which means that we are hiring more HR people per job in the workforce than we were 20 years ago on a fairly steady line. Now, the curve is pretty jagged because there was a massive hiring of HR people after the pandemic and then somewhat of a slowdown after the pandemic. So this is a big average and it's a little hard to tell, but if you look at the chart in the substack article, and I'll put it onto our website also, you can see that if you draw a linear interpolation of this 20 years of data, it's steadily up. The second thing that the data shows, which is also interesting, is is that the pay, the posted pay for HR jobs during that 20 year period of time went up by 82.1%. 82%. Now, there's no way of knowing if that's high or low unless you compare it to inflation. Inflation over the last 20 years, although this could be out of date as of now, has gone up 66%. So in other words, the HR profession, people in HR are ahead of inflation in their wages. Now that's actually pretty unusual. I don't think that's true for software engineers. I don't think that's true for most other jobs unless you're exceptionally high performer in your role. So the value that we're paying for the human resources profession as a relative to other things in the economy is also going up. So then you might say to yourself, well that's a very long period of time. Everything's changed in the last four years.
[00:03:08] Let's go back and just look at the last four years since ChatGPT was launched. So of course as an analyst I went back and I just cut the data to look at it for the last four years. And what you find out is that for really the last two years, because the first year or two there really wasn't much AI impact on anything. It's just a lot of noise. The number of HR jobs over the last two years has gone up by 6% per year and the number of real jobs outside of HR has only gone up by a half percent. So the, in other words, the HR profession has way outperformed in terms of the number of jobs being posted. And then in the last 12 months the number of HR jobs posted has gone up by 4.7% and the number of total jobs only by 0.2%. Now I'm not saying that HR is taking over the workforce like nursing and healthcare, by the way, nursing and healthcare, every single jobs report takes a higher percentage of the US workforce. And that's because we're getting older and we have more procedures and drugs and, you know, interventions in our healthcare part of our lives. But there's a very statistically proven trend here that the value and quantity of people doing HR is going up. So what could this possibly be when we have research that shows that 30 to 40% of the skills and tasks and jobs in HR are going to go away? The recruitment coordinator, the interview scheduler, the training administrator, the HR administrator, the policy administration manager. There's a lot of bureaucracy in this domain of course, as there is in everything else. And so Johnny probably wasn't doing as much analysis as I did. The reality of it is it's exactly what we talk about in our new book Superpowered. We are superpowering this profession for two reasons. Number one, as more and more of this bureaucratic, administrative scheduling sort of caretaking stuff gets automated and there's more self service and more agents for people to find the information they need or get the training they need or generate the content they need, that frees the HR leadership team and the HR group in your company to focus on transformation, change, leadership development, job redesign, reskilling, culture, retention, figuring out what to do about pay in this weird high inflation economy. There's a Lot of things to do that are value add that can replace this administrative work. Now normally I feel like I have to make a business case to CFOs to convince them of this because the natural reaction is oh my gosh, if we can get rid of a bunch of HR people, wouldn't that be great? But in this case it's already happening. If you look at the data and let me give you some of the logic behind this by the way, the the L and D profession is about one, somewhere around one to one and a half percent of payroll in terms of all the training and training spend and content and stuff we do. Sometimes a little higher than that, but it's about that much. The HR group and the company as a whole, not the pay to employees, but the pay to the HR people, the HR technology, the HR tools, the HR vendors, the HR consultants are somewhere around 3 or 4% of the company, rarely even that high, usually a lot lower. So if you're looking at AI as a way to cut HR expense, you're dealing with a pretty small number to begin with. And let's suppose you do shave a million, you know, 1% off, great, that's 1% that could go to the bottom line. But, but if you slow down the hiring or you reduce the effectiveness of your training or sales productivity goes down, or the supply chain management team doesn't feel they know what's going on in the rest of the company so they can't keep up to date or God knows what else could happen. You've just shot yourself in the foot. And one of the reasons we built our HR certification the GHRE was because we did an analysis of this and we proved in a report called the Economic Value of Development of hr which sounds a little bit self serving, but it's basically a study of this that shows that the companies that spend more money on HR in a given industry, and I mean the HR team, not just the pay to the employees, that obviously has a huge impact too are much faster growing companies. Much faster growing companies. The reason for that as we talk about in our pay setter research is, is that most of the transformation and change and growth initiatives you have deal with issues like culture, skills alignment, communication, engagement, long term workforce planning, org design, job design and leadership capabilities. Guess what? Every single one of those topics is something that an HR person would like to work on if they didn't have to help somebody fill out their expense accounts or decide where to go for the policies on some family leave.
[00:08:00] So what we're doing is we're freeing up this very skilled, highly ambitious group of people. Now, obviously there's lots of people in HR that may not qualify for that, but most of them do to enable them to be superworkers. And that's what the super worker story is all about. And in the book called Superpower that's coming out in November that Kathy Enderes and I wrote, you will see story after story after story of how AI is not eliminating jobs, it is eliminating work and tasks so that we can redesign the roles and jobs of the people to do higher value activities. Now, getting back to HR for one more minute, the glitch in this whole equation is do you know enough about what AI to buy or build, how to use it, where to apply it and where it will change the roles in your company?
[00:08:53] And you know, you could sit here, we sit here. Obviously as analysts, we talk to a lot of companies about this and everybody has different perspectives on this and different problems and where this pays off. And the reason we did HR 2030 is because it's not going to be the same path in every company. One company like Chipotle is going to want to automate recruiting because they can sell more burritos if they can hire people faster. So they're going to apply their AI budget to building faster and faster candidate assessment and recruiting and onboarding because that's direct contribution to revenue. Another company, maybe Boeing or Lockheed Martin, is worried about skilling because they have massive government contracts that require excellent new skills in new areas. By the way, Rolls Royce is the same boat. And if they can't rapidly skill new technology people, new engineers, new consultants, they can't keep up with the government contracts, they can't fulfill on their requirements and they lose people to their competitors. So they're investing in AI or for upskilling and reskilling. Other companies really see a big return on investment in the call centers. So banks for the most part tend to have very large, fairly high turnover populations in the branches and the tellers and some of the administrative jobs behind the scenes in the bank. So they do a lot of hiring and they do a lot of onboarding. There's usually call centers, fairly large call centers that manage these employee transitions as they go through these different parts of their careers. I know I've talked to the group at HSBC that does this. I've talked to bank of America about this. I've talked to other companies about it. So they're going to get a big return on investment by applying AI to that process and automating the employee experience and family leave, so forth, that's basically what we're doing, by the way, with News Corp. So this transformation from point A to point B, from no automation or little automation to more and more and more automation, doesn't have to be linear for everybody at the same pace or in the same direction, but there's lots of opportunities to do it. And the fact to me that the HR job postings are not cratering tells me that this transformation is happening now. The other reason that there's increased demand for HR jobs is because the economy is growing. And interestingly enough, as most of you know, if you've ever worked for or started a small company, when you're a small company, even if you're a relatively mid sized company like OpenAI or Anthropic or Nvidia, who's a pretty big company, you have to do a lot of HR stuff. You have to hire people, you have to source people, you have to train people, you have to onboard people, you have to come up with new pay programs, you have to do stock options, you have to come up with communications programs. There's a lot of HR activity to do in a small, fast growing company. So the fact that we're in an economy with lots of business growth, we actually are in a very healthy economy in terms of new companies being formed. Other areas are not so great, but that's creating a lot of demand for HR too. I have a good friend who left Deloitte who's been working on this just unbelievably interesting energy company, I won't tell you the name of it. And he called me up and he said, oh my God, I need an HR person to help me because we've got to do hiring and we've got to do training. We have to have all these different people around the state to do these different things.
[00:12:05] So there's plenty of demand for this.
[00:12:08] And what's been happening to the profession itself is largely what we predicted many years ago is it's becoming a full stack profession where you don't need to be highly specialized. In fact, you don't want to be too highly specialized necessarily to add the most value to your company and your career.
[00:12:27] And that gets to the issue of what we call systemic hr, where even if the company's growing very fast and there's lots and lots of hiring and onboarding things to do, pay makes a big difference on who you hire, the employee experience, the candidate experience, the sourcing strategies, what leaders do, the role of leaders in the hiring process. I mean these are all connected. So great. HR people are advisors to leaders, advisors to management. One more thing that comes to mind while I'm thinking about this is one of the effects of HR 2030 in AR AI, excuse me, is not just productivity and process improvement for HR, but it's also business growth. The theme for HR 2030 is dynamic enablement for growth. Dynamically enabling the people to grow and for the company to grow through faster and more deterministic mobility, hiring, training, leadership development and so forth. When that happens, the HR professionals are closer to the business. So you know we have a lot of companies out there that have a lot of regional or local or plant or store in store HR people. But those people usually do a lot of grunt work. They fill out forms, they show people where to go on websites, they do a lot of administration for the, for the managers. They're really not doing strategic work. What's happening, and we have a large retailer we're talking about this with right now is once they see the opportunity for self service and better AI driven solutions, they suddenly say to themselves, well let's Upgrade these HR BPs and turn them into consultants. Let's have a team of people working on org design. Let's have a team of people working on new pay and rewards. Let's have a team of people looking at the customer experience and what do to improve that. Those business partners never had time to do that stuff before, but now they do. So you're going to end up with, if you're in a big company, you're going to end up with a bunch of highly powered internal consultants who can do really important things for your company. And you don't have to hire a consulting firm to do this, which is usually not as good a way to go anyway.
[00:14:34] Nothing against consulting firms. And so we're going to have in some sense a less centralized, more federated, closer to the business HR function. And the example of that I would give you is in L and D.
[00:14:48] In L and D it's almost impossible to come up with a really good training program from corporate headquarters. You don't know exactly what the job is. You don't know what the first day, the first month, the first year is really like. You don't know what the glitches are in the process. You don't know the customer or other interactions that are taking place. Yet L and D departments were largely centralized for many years, at least the last decade or so. I think one of the other impacts of AI is that this really important, noble, wonderful profession is going to get more distributed into the business, closer to the business where it can do more value. And for those of you that are listening to this, who are HR people or CHROs, think about what that means relative to your org structure and your jobs and your careers inside of hr. Let me give you one more plug here at the end. The Global HR Excellence Certificate GRE GHRE is the most significant investment we here have ever made in professional development for hr. I cannot tell you how much time and energy and resources and research and good ideas are going into this program. This is a 12 week, 50 to 60 hour masterclass. It's going to feel like a master's degree for you and you're going to have access to some of the world's best AI tools from us and others for this period of time. And you will be credentialized by us under the name Josh Burson Institute. And you will be part of an alumni network to maintain your professional skills and your connections over the rest of your career. This is in some sense the pinnacle of my efforts in my career here, working in this whole domain. And I really encourage you to take a look at it. If you go to the Galileo website and look for the ghre, you'll see what the program's all about. The inaugural cohort starts in September. There will be another one starting next year. And I encourage you to sign up so you can be part of this super work era for the HR profession. Okay, that's it for today, guys. I just want to get this out so you could think about it a little bit and have a good week.
