Episode Transcript
[00:00:08] Hello everyone. In this week's podcast, I'm going to talk about the predictions report for 2024 and what's coming ahead. And the research study is going to be published this coming week. It's only going to be available to JBA Academy members and corporate members. There will be a summary document available for everybody else, and there will also be a mobile course that you can take online for free that will walk you through their predictions and give you some background. The fundamental idea and story, though, is as follows. And by the way, there are 15 predictions, so next week I'll spend some time going through them one at a time. And by the way, if you're listening to this podcast, before I've given the webinar, next Wednesday, I'm giving a webinar. More than 7000 people have signed up. So please sign up and you can listen to this story in detail. The historic context for 2024 to me goes back to 2008. And if you remember, in 2008 we had a financial meltdown, banking crisis, real estate crisis, mortgage crisis. I won't go into the details. You all remember this. And the federal government in the United States and other parts of the world realized that the only way to prevent a massive global recession was to stimulate the economy in a heavy, heavy way, buy up debt, lower interest rates, and pour money into the economy to allow companies to underwrite and repair the debt that had been created from the derivatives that caused the 2008 recession and allow consumers to try to save their homes. Didn't work super well for a lot of people, but it worked for many people. And so from 2008 through essentially 2019, for eleven years, and in the middle of that, we had a tax cut to help a corporate tax cut. The economy grew. Interest rates were very low. There were a lot of jobs, and most of our businesses did pretty well coming out of that period. It was a big shock, as all recessions are. But if you look back on it, that was eleven years of improved employment, low interest rates, near zero interest rates. The stock market went up a lot. I don't remember the numbers. I could look it up. And we did a lot of digital transformation and moved to the cloud and all those other things. And then we had the pandemic. And right before the pandemic in December of 2019, we were at a 3.4% unemployment rate in the United States. Very, very low. And now the pandemic hit. Suddenly the unemployment rate goes to 15%, 16%. Companies just shut down, let people go furlough. People try to figure out how to keep their businesses operating in this new world where nobody can come into the office or the store or the hotel or whatever it may be. And of course, lots and lots of incredible reengineering and digital transformation took place from the pandemic. But people were pretty burned out and got used to working at home or working remotely, but didn't like it. And so as the pandemic eased and we started to get our supply chains working again, we entered an inflationary period, and the feds around the world said, all right, we got to jack up interest rates. And so for the last two years or more, we've been in an interest rate rise and trying to slow down this heated economy that was really heated for 15 years by the low interest rates for a long period of time. And of course, consumer demand changed because we could buy things online and work from home, and digital technologies grew. And of course, there's AI, which I'll talk about in a minute. But essentially, from the standpoint of the workforce, we created an environment where it was common and often considered normal to work from home, to have multiple jobs, to be a contractor, to work different gigs. And unemployment stayed low. Yet it's still low. It's 3.8 last month, and I think it's going to be low for a long time, maybe for decades, because in addition to all this, we've had a reduction in the number of people working. Baby boomers have retired. The fertility rate is very low. The number of working people is flattening or declining in China and Japan and Germany and the UK. The workforce is not growing. And for the rest of the developed world, it's expected to stop growing within the next decade. So we, as business owners or business leaders, are going to be living in a world where labor shortages and low unemployment is going to be secularly common. In other words, it's going to be around for a long time. And yes, we're still going to have to hire people, of course, but it's going to be harder. And so we're going to have to look for internal candidates. We're going to have to retrain people internally and redesign how our organizations operate. And so in 2024, this is going to stick. In fact, I think a lot of the ideas and concepts that I've been talking about for a decade of having a more dynamic organization, moving people around internally, reskilling people, giving people more opportunities to do multiple things, flattening the organization, getting rid of this old, I got to get promoted every year or two in order to feel comfortable that I can stay working here are really going to become mainstream ideas. And so we are changing paradigms this year. I mean, a lot of paradigms are changing. Talent marketplaces aren't just good ideas for HR, they're new ways of operating a company. Hybrid work is not an accommodation, it is a new way of operating a company. Skills based pay, skills based hiring, skills based careers isn't a technique, it's the future. And so we have to get comfortable with that and also reflect to our senior leaders that this is the performance strategy to make more money and to grow. Because if we don't become more dynamic and implement these new ideas that are talked about in the report in a scalable way, we will not compete well. The reason we will not compete well is we're going to be in a war for productivity. Productivity. A bunch of ways to define it, but the simplest way to define it is revenue per employee. At the end of the year, you take the revenue and divide it by the number of employees and you can find out how productive you were compared to your peers or competitors. It's actually a very good way of figuring out the business model. Strength of a company is comparing revenue per employee to their peers. And I think for us in HR, we need to think about our jobs in 2024, among many other things, as the improvement police or the curators or consultants for productivity. Now, when you read the article on the web, you'll see some interesting stuff there. There's several reasons for this. One is, of course, we're going to need it because it'll be harder to hire. And second, of course, is that AI makes us all more productive, white collar workers in particular. So we're going to suddenly have some tools that are going to make us enormously more productive if we implement them well. But the third is ceos are aware of this. In the PwC CEO survey that came out of last week, which I was really surprised to see. Of the 2000 plus ceos they surveyed, on average, they think 40% of the work going on in their companies is wasted. It's wasted time. It's a form of inefficiency. And they talk about things like too many emails, too many meetings, unclear accountability, bureaucracy in hiring bureaucracy and expense management, bureaucracy and performance management. And a couple of other things you can read about in that article I just wrote. And the reason they're saying that is they're thinking we're going to have a slowing economy. They know it's hard to hire. They see the high turnover rate we have in companies now, and they want to make the company more efficient. And many of the things that they blame are things that were developed by HR. And many of the things they would like to improve are things that we can help with or be a major part of. So when you read the 15 predictions and really they're really, in some sense, 15 imperatives is what they really are. Think about them in the context of productivity. Now, one of the things that we do in HR to drive productivity is we train people and we skill them and we give them great skills and we give them mentors and we give them coaches and we give them managers. But the other thing we do is we give them accountability. And my experience in our company, this one and the one before and including my experience at Deloitte and in other organizations is when accountability is clear, productivity goes up. And that's the story of the four day week. The four day week is not a benefit. So you can take Friday off to go to the dentist. The four day week is saying to the employee base, we're going to get rid of some of the wasted time around here. We're going to clarify what you're responsible for and get rid of the things that are getting in your way so you can do 40 hours of work in 32 hours. That's a productivity initiative. And the flip side of all this is that employees are now demanding this. And you'll see in the article that one of the other things that's new is employees are starting to feel activated. In fact, employee activation is going to be a big story you're going to hear about from us. We're just finishing a big research report on this. Look at the growth of labor unions. Look at the turnover rate even now in this economy. The turnover rate in the United States is 2.3% per month. 24 25% of the workforce changes jobs every year. That is not going down. It's probably going to go up because there are so many jobs and so few people. I think I mentioned this on the last podcast. There are coffee shops paying $1,000 bonuses for $15 an hour workers because they can't find them. In fact, when I was in Hawaii, a couple of people who had bought houses over there told me we're not even able to find a contractor to install a new oven. We have to fly somebody in from the mainland because there's no contractors available. And that's a problem that I think we're going to see in a lot of companies where we just cannot find enough people, quantity and quality to do the work that we need to do, which means we're going to automate it and we're going to have to use AI and other tools. Automation has been going on for decades. In fact, if you look at the charts in the article, you can see that the size of the workforce in the United States in terms of the number of working people, it's about 100 and 6170 million in the United States now, has only gone up by a few percent per year, maybe even less over the last 50 years, but the GDP has gone up by 600 700%. The reason for that is automation. That's what companies are all about, is finding ways to do more customer value work better and better and faster and faster with less and less resources, including, and of course, the other part of the 2024 work we're going to do is not just figuring out how to use AI, but figuring out what happens to the roles or the jobs or tasks that are automated by AI. And what do the new jobs look like? Generally speaking, as you all know, when you have an AI tool, first of all, you have to learn how to use it and somebody has to take care of it. So there's going to be a lot of jobs just maintaining and developing the AI systems, but you become sort of a higher level thinker, higher level solve and problem solver, higher level salesperson, higher level marketing person, et cetera. So this isn't going to happen in one year, but it's going to happen over the next few years. We're going to have much higher level roles in the company, which again will be facilitated by this flattening of the organization, more dynamic operating models and so forth. So that is the narrative behind the 15 predictions. Now, for HR itself, there are many things in there, skills projects, reengineering and dramatically improving the recruiting process, implementing AI and learning and development. I call it the autonomous learning platforms. The stuff we've been doing with Galileo is going to blow your mind. You're going to see AI really fix and change. A lot of this legacy training stuff we've been doing for so many years that I've been involved in, that's going to start to take hold in 2024. We're going to see a redefinition and reengineering and refocus of DEI in different ways. We're going to have a continued focus on pay equity and pay for skills and pay will become one of the parts of the talent intelligence platforms. I firmly believe that the talent intelligence, HR technology, the eightfolds, gloats, Beameries, phenom, paradox, others are going to replace, not just complement, workday Oracle SAP. I think workday Oracle SAP are working as hard as they can on the same stuff, but they're way behind. So you're all going to find that to be a very important part of your initiative. Employee experience. Technology is going to be revolutionized by AI. We've already done work on this with Galileo, and you saw what Walmart has done. We're not going to be able to afford or want to afford to spend $100 million a year on an employee portal anymore. So there's going to be a lot of cool stuff there you guys are going to be involved in, and then we're going to have to spend more time on leadership because the role of leaders in this flattened, more dynamic organization is different. And given the fact that most employees have a lot of job offers and they're thinking about leaving, we're going to have to spend more time with leaders, talking to each other and learning and developing their human centered leadership skills and also learning how to lead in an organization where vertical mobility is not the name of the game anymore. I've learned in my career, for those of you that know me, I was never a very fast mover in the companies I worked in. I was one of those guys who just did their job well. And everybody kind of considered to be highly competent. And as a result of not being promoted over and over and again and just getting good at a bunch of stuff, I developed a great career without ever becoming the vp of anything at any company. So that is another big idea that's going to have to be facilitated and then coupled with taking care of people. And then there's the issue of employee trust. And if you look at the research from Edelman in the article, 71% of employees now say, if I don't like what's going on in this company, I want to be able to change it. I don't want to just wait for somebody to do it. I want to be part of the solution. And if I'm not part of the solution, I'm going to go out on social media and tell everybody how messed up things are over here. So we have to have an ex process that goes way beyond surveys and really activates the suggestions and recommendations of employees. And we've already written a lot about that, and you'll see a whole bunch more coming there. So there's some really big paradigm changing things happening. And the big theme to me is that some of the innovative ideas that we think of as new technology or new concepts are going mainstream. And then of course there's AI, and we're going to talk a lot about AI. All of you who work for companies that have corporate memberships are going to get Galileo. We're offering Galileo with the corporate membership. We're not going to charge extra for it. All of those of you who are in the JBA will get Galileo later in the year when we get the JBA version of it up and running and sort of organized. And you're going to have a lot of opportunities to use AI for many things. Just to give you an example, the way Galileo works is it has an entire corpus of knowledge from us, and then you can add your own information on your own company's practices or leadership development programs or onboarding or whatever it may be, and it gets smarter and smarter and more and more like you. That's kind of what the copilot does for you as a professional Microsoft user. These are really spectacular tools. And then you take that idea and you scale it across an organization copilot like Eightfold in some sense, Eightfold. And Beamery and gloat are really organizational copilots that give you information and insights about what's going on in the company and the skills and the jobs and the roles and the mobility and the dynamic nature of pay and so forth, just like generative AI does for your content in your pc and so forth. So these are going to be really fun times. The report is 40 pages long. If you want to read it, join the JBA or join our corporate membership program. Listen to the webinar next week. It's going to be about 45 50 minutes. I'm going to go into great detail as much as I can. You'll be able to take the course. We are really going to spend a lot of time over the next couple of months talking about not only all of the topics in there, but getting you to irresistible in May. Because in May at irresistible we're going to have a spectacularly interesting group of people talking about all of these changes and showing you examples of how these innovative ideas are being implemented. The final thing I'll leave with is you spent a lot of time over the holidays working on the predictions and thinking about my life. Our core business is really educating and informing and advising you. We don't really think of ourselves as a product company. We think of ourselves as an advisory company through a lot of scalable offerings, and research is a part of that. Research is the tool or fuel we use to get the information and validate it so that you believe what we say and trust it, and we can give you examples. And in that vein, the lifeblood of what we do is stories, stories from you about what you're doing, how you're doing it, what's working, what's not working, and so forth. So I want to just encourage everybody who listens to this podcast. If you're doing something cool or exciting or something's blowing up in your face, please share it with us. We are a very listening centric company. We have lots of people that are willing to call you back and spend time with you. And that's another big part of 2024 for us, is continuing to grow this communicative process that we have in the HR domain. Also, we will be at a lot of conferences this year. We're going to the HR tech conference in the US and in Europe in May. We're going to all the unleash conferences. I'm going to be doing a big keynote and a demo of Galileo at the transform conference in March with the CEO of Sana. And I think a lot of you guys are going to want to come to that. And we're going to go to Europe a couple, four or five times. We've got some stuff going on in Asia, so if you want to just kind of meet up, you can come to those conferences. We try to do workshops at the conferences. At most of them. We also go to a lot of vendor conferences, so you'll see us there. And I'm always interested in talking to you guys face to face or one on one. So more to come on the predictions, come to the webinar next week. You'll see the infographic you can download that you're going to be able to get the course and I want to get your feedback. So have a great weekend and we'll talk more next week. Bye for now.
