Episode Transcript
Speaker 1 00:00:07 Hi everyone. It's January 6th and we're starting a pretty crazy year. So I want to talk a little bit about meaning and purpose in the year ahead, because I think we're in for quite a rocky period of time. So first of all, you know, if you look at all the economic stuff going on and the data coming out of the Bureau of Labor Statistics and the economists and all that, um, we're definitely entering a pretty significant economic slowdown. And the reason I believe that's true, and you'll read about this in the predictions report that's gonna come out later this month, as well as the webinar I'm doing in a few weeks, is consumer spending has sort of peaked the amount of consumer debt is at an all-time high. Savings balances are beginning to tap out. And more and more evidence shows that despite the fact that the economy's very robust, we've sort of overspent our pandemic gifts from the government.
Speaker 1 00:01:07 And many, many consumers are simply going to have to ratchet back. And that of course, means that the airlines, the hotels, the consumer product goods companies, the telecommunications companies, the media companies are all gonna see reduced demand, which will in turn create slower businesses, rationalization of products, and perhaps some layoffs. Now, of course, the big story before that is tech. And let me talk a little bit about tech. You've all seen that meta laid off thousands of people. Salesforce last week laid off 10% of its workforce. Amazon laid off something like 15 to 17,000 people. We haven't seen layoffs significantly from Google or Microsoft, but many of the mid-size tech companies have laid off people and they're, I would estimate that close to 150,000 to 200,000 tech industry workers have been let go. Now, the tech industry is a big industry, but it is not the biggest industry in the world.
Speaker 1 00:02:06 It may have some of the highest market caps, but the United States and the rest of the world is filled with companies in healthcare, in telecommunications, in retail and manufacturing, in automotive, in energy, in utilities, in education, and many other industries. And so most of these people that have been laid off in the tech industry will find their way to these other industries. In fact, the way I think about it is the new tech industry is not tech technical professionals, engineers, scientists, digital design people, software engineers are badly needed by healthcare, manufacturing, retail, banking, financial services companies, and now they're gonna be able to hire them. And you know, shame on the tech CEOs for over hiring, for being overly optimistic about the future and frankly just not being very good business people. And I think most tech CEOs right now are really dealing with the issue that no company grows forever.
Speaker 1 00:03:09 And if you're not prepared for a downturn, you're probably not running your company in a very responsible way. For example, IBM turns out last year was one of the most successful, if not the most successful tech stocks of the year. It didn't go up a lot, but it went up six or 8%, and most of the rest of them dropped by 30, 40, 50, 60% or more. So let's use that as a lesson. Now, what does that mean for us in hr? What does that mean for us in terms of mission and purpose? I think there's several things you're gonna see come out of our research this year that are important. Number one, the unemployment rate remains very low today. It went down to three and a 5%. Again, because there just aren't enough people working to take the jobs we have. And I don't think that problem's going to go away.
Speaker 1 00:03:52 Even if we have a significant recession and there's more layoffs, there will still be a low unemployment rate because the level of mobility between jobs, the level of mobility between industries and the flexibility of companies to hire people remote or part-time is changing the labor market. So you as an HR person, as an employer, as a business person, are going to have to take a really good care of the people you have and make sure that you're not only lavishing a great employee experience on them, but as you're continuing to make your company attractive to others because it will be hard to hire. And I think that's gonna go on throughout the whole year. Now, one of the dimensions of this new calculation for workers is pay. And interestingly enough, somewhere around March or April, we're gonna release this massive study that Kathy's been working on in pay and rewards.
Speaker 1 00:04:44 And I'll give you a little preview. What we've discovered is that the most successful companies do pay above average in their industries, in their markets. You're going to have to raise pay, you're going to have to make pay more fair across the company because pay equity is actually more important than pay level in engaging people. And you're gonna have to pay attention to things like goals and how they're set and who gets paid as a team and who gets paid as an individual. And why are some individuals making more money than others, which is fine, but do you have rationale for that? Is the performance management system reasonable? Is it well understood? Is it well communicated? Do people understand why they are paid, what they are paid? And then of course, the benefits. Now interestingly enough, our research has found that despite the fact that the United States, 32% of payroll is allocated to non-cash benefits, leave, rewards recognition, tuition reimbursement, insurance, et cetera, it doesn't make as much difference as you think.
Speaker 1 00:05:52 We actually found that if you really want to create a great pay experience for your, your employees, and by the way, that is important in this year, with the inflation rate being so high, you have to make sure your pay strategy is clearly defined. It's clearly communicated that the performance process is considered to be fair and equitable, that the pay levels are considered to be fair and equitable, and that you are paying people what they're worth and not underpaying them. So that will be a big theme for the year ahead because what we found is that most companies are operating their pay and compensation practices in somewhere around the 1980, 1990s levels. They just haven't spent enough time to upgrade this and really think about many of these new issues. The third issue, of course, relative to purpose and mission in 2023 is the issue of internal mobility and internal employee growth.
Speaker 1 00:06:43 Now, if we do have an economy, like I mentioned, where the business slows, but the unemployment rate remains low, and you can't hire or necessarily find new people very easily, and you may let some people go and the company changes and the CEO decides he's gonna shut down business unit A to optimize business unit B, which is tends to be what happens during a slowdown. How are you gonna get those people? You're gonna move them internally, you're gonna redevelop them, you're gonna create a career pathway, you're going to re-certify people. So you're investment in learning and development and internal mobility is going to be higher than ever. And we've seen this, I went through the 2008 recession, I went through the 2000 recession, I'm not sure I did the one before, but in all of those cases, L and D spending barely went down at all.
Speaker 1 00:07:31 It may have been cut for budgetary reasons, but it's very, very important that you spend the money to move and develop people for the roles that are become more important during an economic shift, like the one we're probably gonna see now in the era of l and d spending. What you're gonna see from me next week is an interesting article about this, is that it is time to get very serious about the Capability Academy idea or what, which we could also think of as the Mastery Academy. It isn't enough to throw a bunch of courses out there and give people access to LinkedIn Learning or Skillsoft or Udemy or something else and say, go for it. Learn whatever you can make yourself a better employee. People wanna know, what do I need to know? Who's gonna teach me? How am I gonna get credentialized? How am I gonna make sure this is relevant?
Speaker 1 00:08:19 And how am I gonna continuously advance my skills in the role that I'm in? That is an academy approach. And in 2023, I think we're gonna see a massively interesting improvement and growth in that area. New platforms, new solutions, and a very significant change in spending allocation towards those kinds of strategies. And by the way, we are revamping and doing some really exciting new things on the Josh Bersen Academy. So for you as an HR and l and d person or as a consultant, I really encourage you to check it out because there's about 45 or 50,000 people that have been through there. And if you're not part of that group, you're gonna be missing out on some pretty important things that you need to know. Now, given that and given what's ahead, and I will talk about HR technology later, we've talked about that a lot recently.
Speaker 1 00:09:08 What does this mean about the mission and purpose of you as an HR person, in HR team and as your company? Well, from my perspective, coming through the winter here in California with floods, storms, power outages, a variety of business interruptions, I think we need to take a big step back coming out of this pandemic and be happy about where we are. For most of us, the last three years have been pretty disruptive. We've had our lives disrupted with health issues or personal issues or family issues. We've had business change, layoffs, restructuring, companies getting into new operations. Many of you have changed jobs or roles or organizations. Some of you are probably looking for work. And let me just tell you that that is a time to pay attention to yourself. Think about your purpose and your values and what gets you up in the morning and what gives you a sense of energy and what gives you a sense of value.
Speaker 1 00:10:11 And maybe it's your family and maybe it's your health, and maybe it's your pets and maybe it's your garden, or maybe it's your neighborhood or your community activities. But you know, work is part of that. And I think 2023 will later in the year turn out to be a thriving business environment. And during a time of change like this, I think it's okay for you to take a little bit of time and really think about what makes you you. Now, the reason I say that is not because I want to be philosophical, although I have been quite philosophical over the last month. It's because I think I know you. I spend an enormous amount of time with many of you HR executives, HR managers, recruiters, l and d professionals, vendors, consultants, technologists in this industry. And I know that the reason you do what you do is because you love people.
Speaker 1 00:11:05 You love data and technology applied to people. You wanna make the world of work better, you wanna make your organization better. You understand the opportunity to make teams more productive, to make leaders more effective, and that is why you do what you do. And much of your success in 2023 will come from your own personal energy remembering why you're here. And some of you are gonna go through challenges. You might have a health scare, you might have a change in your family, you might have a change in your company or something else. But remember those values because in a year like the one we're coming into, they're gonna be very, very important to you. Let me leave you with one more thought as we talk about values in the year ahead. We're gonna do a lot of research this year. We're gonna do more on the Global Workforce Intelligence project.
Speaker 1 00:12:00 We're gonna introduce the Trailblazer research, which delineates and shows you specifically why some companies are outperforming their peers in this massive digital industry transformation that's going on in every industry. We're gonna do a whole bunch of research on the HR operating model. We have a new operating model for hr, which we call systemic HR that you're gonna learn all about. You're gonna see the introduction of our leadership research sometime around May or June. We're gonna have the irresistible conference in mid to late June. We're gonna have a whole bunch of new research on technology. We're looking at the four day work week. We're looking at productivity. We're looking at new models of work with gig workplaces and talent marketplace systems. We're going to be looking at diversity and inclusion. Again in the context of people sustainability. We're going to be looking at recruiting in the continuous need to create an integrated and intelligent recruiting process.
Speaker 1 00:12:55 We're going to be doing work on talent intelligence. We're gonna have a series of talent intelligence boot camps for you. And for those of you that are corporate members, you're going to see dozens and dozens of case studies and reports and maturity models and tools and courses to help you deal with all this stuff. But why does that all matter? Because ultimately, we are in one of the most tumultuous economic changes that I can remember. Yes, we're gonna have an economic slowdown. Yes, we've gotta deal with inflation. Yes, there's a war in Europe, and yes, there probably will be some changes in the political environment, but companies are becoming more and more important than ever. If you look at the research that just came out that I wrote about just a couple of weeks ago about why employees are taking less interest in their career and less interest in their work, which is actually very, very shocking when you look at that data.
Speaker 1 00:13:49 The reason is they're fed up. They're fed up with their jobs, they're fed up with their hours, they're fed up with their work life balanced, they're fed up with their managers. They don't want to be laid off by some CEO who's disconnected or not paying attention. They don't wanna listen to Elon Musk anymore, or whoever it may be, that's spouting off some management theory that they don't agree with, and they have the autonomy and the opportunity, or maybe they just need to do what they want to do, and maybe they'll form a union, maybe they'll just quietly quit or maybe they will quit or maybe they won't quit, which might be worse. And so we are going to have to be on our best game in the year ahead to deal with these issues. But that's a good thing because nothing's more exciting and more rewarding than helping the company create an even better relationship with its employees.
Speaker 1 00:14:42 And I hate the word employee to be honest. Even the word employee gets under my skin. And I know some companies call your employees partners or associates or other names like that. Employees are the company. There is no company without the employees. Even though you have a contract relationship with employees where they are actually at will and you can fire them without people, you don't have a company. It's that simple. And if we don't learn how to take good care of people in the year ahead, including all the issues of diversity, inclusion, belonging skills, growth, development, fair feedback, et cetera, we're not gonna have a company at all. And the reason I say that is that when I watch these tech companies out here in California, willy nilly laying off tens of thousands of people, and the CEO says things like, sorry, I guess I missed the economy as if he really wasn't paying attention.
Speaker 1 00:15:43 I do have to wonder if the company really is thinking about this. For example, view decided to hire thousands of people during the economic growth cycle of the last 15 or so years and didn't have a business plan, didn't have a fallback plan, didn't have an organization structure to take care of them, then I'm not sure you're really doing your job well. And that should be part of your mission and purpose too, is making sure that whatever you do, whether you're growing or shrinking or hiring or laying people off, that you're taking care of the people and the culture in your company because they in turn will take care of you. Now, I'm gonna be spending a lot of time over the next couple of quarters talking about my book, the Seven Secrets. And what you'll find in that book is that these seven big ideas are all becoming an urgent necessity now.
Speaker 1 00:16:36 Right now, the level of industry disruption of industry convergence of industry change that's going on is more rapid than I ever expected. Technology will never slow down. Now we've got chatbots that are almost intelligent as humans, although not really, but they look like they are and amazing new technologies entering the market. And those seven principles, or seven secrets, as I call them in the book, are gonna be revisited again and again. So feel free to call me. I'm doing a series of special events on the book. You can join me in any of those events and learn about some of the principles in there. And we're gonna be talking about them a lot as the year progresses Anyway, we have a very, very exciting year ahead for you, and we encourage you to do two things. If you're in an organization, join our corporate membership so all of your HR professionals can get access to our research and our insights and our advisory services.
Speaker 1 00:17:30 And if you're an individual or a team, join the Josh Person Academy. It will get you a subset of our materials and all sorts of amazing educational programs. And the capability project assessment. By the way, we've had almost 9,000 HR professionals take the capability assessment. When you take it, you will be benchmarked against those 9,000 professionals. You will see where you score, what your strengths and weaknesses are and where you should focus. And then we have a series of capability accelerators to go back into the JBA and take the courses and find the resources you need to improve your skills. So this is a very low cost way for you to make sure you're keeping up to date on all these important topics. So getting back to the big story of mission and purpose, I think it's a good time as you get back to work in January and you deal with the onslaught of emails and meetings and issues and layoffs or growth or whatever it may be in your company that you go back to your values and remind yourself why you're here. It's going to be an exciting year with a lot of change as always. But one where it's clear to me the human resources professionals, l and d professionals, recruiters, and those of you in the technology and vendor and consulting part of this industry are going to be absolutely essential to navigating the waters ahead. Thank you.
