Episode Transcript
[00:00:07] Welcome to 2025. It's finally here. And as I wrote about in my last column of the year, we went through a lot in 2024. A lot of political change, global warming, a couple of wars, a lot of income inequality discussions. But let's put that aside and talk about what's going to happen this coming year. And I would group the big things that we're into five or six areas. First, of course, is the economy and the workforce, and nobody can predict the economy. I personally think we're overdue for a setback of some kind. It's not clear whether that will happen this year or not. The Trump administration is going to do everything in their power to keep interest rates low in the United States. But we do have two wars and we do have an exceedingly high stock market, very high price to earnings ratios, and consumers have been spending money for a long time despite inflation and debt levels are very high. So you could imagine a year where things do slow down a lot. Now, for those of us in hr, we're going to be going through plenty of transformation regardless because of AI and whether the economy takes a hit or your company takes a hit for some reason or another. We'll talk about that in a minute. You're going to be spending a lot of time on job changes and job role changes, which I'll talk about in a minute. I think the bigger issue on the economy though, is the workforce, and I wrote about this in December. The unemployment rate is low, but that is masking a much bigger problem that the unemployment rate is not low for white collar workers. It's relatively high. There's a lot of fear of job loss and actual job loss amongst white collar workers, somewhat due to efficiency, but somewhat due to AI and expectations of AI and a very, very low unemployment rate for hourly workers, retail workers, frontline workers, nurses, healthcare, manufacturing, construction and so forth. So, you know, whatever the politicians and journalists say about the unemployment rate, I think you're going to see this bifurcated employment situation in most of the jobs you're hiring for now, in the middle of this shortage of hourly and frontline workers and of course, rarefied skills in AI and a few other technical things. There's this other trend which is number two, which I call the rise of the super worker. And that is the way I frame AI in business. AI and business isn't a technology like SAP or Workday or Salesforce that automates and streams lines, an end to end business process, which is what that stuff does. All of those ERP products a lot of them were invented in the 1970s and 1980s, were basically taking traditional business models and automating the finance, operations, supply, 8, human capital, sales, marketing, so forth around them. And we need those things. You can't live without a CRM and HR system, an erp, a manufacturing system. So there's a massive market for that stuff. But those things don't displace jobs or change the performance of individuals. They're really designed to streamline the company's operations. AI, on the other hand, is a completely different effect. AI and agents and other superintelligence bots, assistants like Galileo, actually help individuals improve their personal performance, which in turn improves their time to market customer service, sales efficiency, creativity, marketing, information gathering, et cetera. So we have a very different type of automation coming on like a freight train now. You know, two years ago or even one year ago, companies were barely sure what AI was. Now 90% or more of the companies we talk to are doing all sorts of AI projects with varieties of tools. So what's essentially going to happen, and I think you can predict this, but you can read about it in the Rise of the Super Worker research is all of the functional roles in finance, operations, marketing, hr, et cetera, including managerial roles, are going to be supplemented or super powered by AI, not instantaneously. It's going to take a little bit of time for us to adopt all this stuff and to get it all to work correctly. But all of these time wasting things that we do, looking for information, trying to run a report, managing our calendars, sending emails, dealing with incoming emails, trying to deal with customer problems that are not necessarily super strategic, are going to be way, way more automated. And then the highly strategic things like, you know, how do we move to a new business area? Should we move to this new geography? What are the parts of the company that are underperforming and why? What are the factors driving that underperformance and what can we do about it that will also be surfaced or transparently exposed by AI as well? So this is going to really change the inner workings of our companies. Now, the ERP era did create a lot of new jobs, but a lot of those jobs were data management and ERP data entry kinds of things, not necessarily individual performance improvement. But AI is going to do a huge amount of this. So I won't get into a huge amount more at this podcast, but we have a pretty detailed report on it and we're going to be doing lots of research. So if you are doing AI transformation in your company, in HR or anywhere else, please let us know. We'd like to interview you because this is a massive topic, not just because it's an interesting business topic, but because it affects pay, role design, job title, job level, skills needed in different roles. In effect, decomposes the structural barriers we have within the company between business functions or business units. Now, that's not going to happen day one. But in small companies, it's already happening. And like in our company, everybody uses the same AI, everybody has the same data, and we also use teams and other tools for that. So functionally, we have virtually no barriers whatsoever. Somebody can be a consultant one day and do data analysis the next day and write a research report the next day, and it can be the same person. That's not as easy to do in a giant global corporation, but there's going to be way, way, way more of that. So that's number two. Number three is a really sober, serious look at the employee experience. Now, employee experience is becoming a dated, kind of tired topic. And the reason I say it's tired is because in my experience with it, this started way back with Frederick Taylor in industrial engineering when we were measuring how many weight pounds of pig iron somebody could carry through a factory to optimize the production of the factory. And then we had Carl Jung and employee engagement surveys and employee engagement statistics and data and feedback systems and psychological assessment of employee experience. And, you know, Gallup and, you know, many, many, many things were done, and all of these were done with the effort of figuring out what are the business problems that are getting in the way of individual employees from doing their jobs. Of course, this is a big continuum in our employee experience framework. We talk about things like rewards and managerial sense of trust, a sense of safety, as well as the psychological factors as well as the training factors, as well as the pay, pay equity, diversity, inclusion, et cetera. In some sense, almost all the stuff we do in HR is about employee experience. And what happened during the pandemic, of course, is employee experience was about physical safety and health. And then we had the mental health issues of working from home and the mental health issues of social media and the mental health issues of overwork and stress. And then we had the mental health issues of pay problems due to inflation. And we landed in this 2025 sort of soup where all of these things still exist. None of them disappeared.
[00:08:22] So we have multiple factors that affect the performance of your employees. And let me just point to something that just happened. Last week, the Wall Street Journal published an article about DEI programs and I interviewed with them about it and they're essentially chronicling the fact that a whole bunch of political activists are trying to kill DEI by threatening companies against their, their customers from doing business with them because they have some sort of forward thinking, leading DEI program. And of course, you know, if you're a white, middle class, fearful worker and you think that the DEI program is promoting minorities above your reward system unfairly, you know, that's a very threatening idea. Now you all know in HR that's not what it is. But we did have a lot of social justice education and leaning forward and you know, teaching people about history and slavery and all that. Well, that was a very negative effect on employee experience. Now we have the counterbalance to that. So the way to think about employee experience is to think about employees as citizens of your company or country. Think of your company like a little citizenship organization. And you are trying to keep your citizens happy and productive and safe. And people have multiple issues in their mind depending on their life cycle with the company, on their personal issues, their career, their pay, their location, their physical handicaps, many, many other things. So we're going to land this year in a big soup of ex problems because you have to add to that a big new threat, and that is AI. Now, I'm not worried about AI at all because I'm kind of a geek, but a lot of people are very worried about it. According to the latest Adeco Global survey on the impacts of various technologies at work, 77% of employees, and this is Frontline as well as White Collar, are worried about the impact of AI on their job, their career, their professional success. And they probably should be, because if they're not paying attention or taking advantage of it, something will come along that will change the job they're in and they will be left behind. If you're a software engineer and your buddy next door to you is producing twice as much code because he's using AI. If you're a marketing manager and your friend across the street is producing better videos than you are, if you're a salesperson and you're making kind of crummy sales calls because you're not paying attention to what the customer's issues are, but your competitors are doing a better job of analyzing their customers, it's, you know, those are real threats to your job. Including, by the way, in hr, the people that have access to Galileo are going to know a hundred times more about what's going on in the workforce than you are, et cetera. I'm not going to overhype it, but you see where I'm going. So that's number three is how are you going to keep people engaged and excited and inspired and leaning into their jobs? When you're moving people around, you're laying people off, you're restructuring and you have AI projects all over the place that people don't understand. The biggest secret is to demystify what this is, teach people about it, let them use it. Most people have used AI, they use ChatGPT, they use Anthropic, they use Microsoft Copilot, whatever it is that they're not intimidated by the concepts, but what is it going to do to their job? So we have to co design new solutions in 2025 with recruiters, with business partners, with employees in different roles so they feel like they are part of this transformation that is taking place. So that's number three. Number four is leadership. Now, I could probably talk about leadership every single year for the rest of my life and it never ends. But we have a very fascinating period of leadership going on. In the United States where I live. The glorified leaders are Donald Trump and Elon Musk and the oligarchs, the billionaires who run these big tech companies. And there's no question about it that these are very smart, very shrewd, very strategic thinking people. There is a small number of them that are very, very big names. The rest of us have basically the same issues that they do. We have something to do and some group of people that we're responsible for and we're trying to accomplish a result and we're trying to figure out how to move from point A to point B in the fastest, most effective way without wrecking the team or the organization in some, you know, dysfunctional fashion. Now, I won't go through the 10,000 books on leadership, but we did some really interesting things in Galileo. We put into Galileo More than 60 leadership interviews where we had talked to companies about their leadership. We've added the Heydrick and Struggles leadership model. We are just in the middle of adding all of the soft skills research that has been done by shl and we'll talk more about that in another month or so. And what you're finding when you look at all of this intellectual property, and you know, I'm not saying we have every book in the world on leadership, but you know, there are a lot, a lot of them are very similar that you actually can learn how to deal with different leadership issues by collecting the wisdom of those before you. Now, great leaders do a Lot of reading and they understand history and they maybe they watch old videos of old leaders and they, they glorify, you know, this, this domain because it's really a complex domain or they go to executive education programs or whatever, but you don't have to do that anymore. So in 2025, I think we're going to have leadership solutions, leadership information, leadership data that we haven't had ever before. And I'm not saying it's going to come up with some grandiose new idea, but it's going to be way more actionable. I, for example, have many challenging sort of leadership issues that come up in our company. And my gut feel is usually sort of okay, but I will oftentimes ask Galileo questions about what is going on and what Galileo suggests I do. And it taps into the history of all these other people that have gone through these issues and gives me advice. So I think we're going to have some really fascinating changes in how we think about leadership, how we develop leaders, how we support leaders, and by the way, what a leader is. Every single person in the company has leadership responsibilities in different projects and different teams. So this isn't something that's reserved for the director and above population. The last thing I want to talk about relative to 2025 is what are you going to do about HR in and every company I talk to, and it's hundreds and hundreds of companies has got all sorts of glitchy problems with the HR team itself. Old technology, poor data, people that don't understand where something is going versus something else. Business partners that are under support or under trained. This is a very difficult, critically important profession. Next year, this year we're going to be doing a big study of the Chro Rule. Stay tuned for that. We'll have some interesting information in Q1 and a whole bunch more later. But the bottom line is there's no question in my mind from the research we've done in systemic HR that you have to think of HR as an agile, highly skilled consulting organization with services, with products, with technologies, with self service. I'm not saying everything has to be done by hand, but that is not enough. The number of problems and the types of challenges that will come up in any given year, including this one, are unpredictable. It could be a merger, it could be an acquisition, it could be a fire, it could be a theft, it could be, you know, just an economic downturn, anything. And you as an HR team are going to have to help the company respond to that change through people.
[00:16:23] And people are not like machines, of course, they're complicated. So we have 94 disciplines in HR to draw upon. And so as we talk about in systemic HR and systemic HR is now being adopted by many, many companies, one of the things we have to do is we have to cross train and develop our skills as HR professionals. We have to improve the self confidence of people in hr. We have to move them around, we have to expose them to new situations, we have to rotate them into and out the business so that they have more respect and understanding for what things are going on. We have to distribute HR into the business as best we possibly can without creating a chaotic, highly inefficient process. At the same time we do that, we have to simplify technology, we have to create better self service. We have to use AI everywhere we possibly can to make it easier for people to get information so they're not calling an HR person every time they want to know how much vacation they have left. And we have to make our experience, employee experience, not only irresistible, as I talked about earlier, but easy and simple and not time wasting to get your work done. That is a major, major amount of work. Now you're all doing this. Woody's starting from scratch here. But in 2025, the urgency of transforming HR is going to be massive because the level of transformation I expect to see this year around AI in the company itself is going to be so big that if you're not able to adapt quickly to the changes your company's going to want to make, you're going to be left behind. And I wouldn't be surprised if the CEO and the CFO decides to outsource a bunch of stuff to get rid of you guys. Now, as you know, our mission is to empower and develop and support you. And so our Academy, Galileo and all of the research and advisory services we do through our membership, through our events, through Irresistible are designed to help you stay ahead of these issues. For those of you that are a little intimidated by this podcast, join the Big Reset. It's free. If you're a director or above and you're not a consultant or a vendor, you can join every three or four months, two or three months. We have a big cohort of the six week confab of HR people that talk about these issues. And we don't try to solve them all, but we spend six weeks getting very, very close to many, many discussions of many solutions in all of these areas. Get yourself exposed to other areas of hr. Go to some conferences this year, get your hands on Galileo and start asking it a bunch of questions and asking it to teach you what you need to know. Join our academy. Go visit some remote locations of your own company. Put some challenging projects under your belt. Work on some things you're not familiar with. Get involved in an AI project or a data project or a tech project or a leadership product or a hiring project that you've never done before that is also a big part of succeeding in 2025.
[00:19:26] I do think we're going to have a tumultuous year. Global warming issues continue to come up. We have economic changes created by Bitcoin, which is, you know, obviously taking money out of the system into a new currency. We have remaining inflation in many countries. The unemployment rate is very low. People aren't having enough children. Mental health. You've read about that and heard about that. So we have lots and lots of ongoing challenges to deal with. But I know, because I know so many of you, that with the right information and the right inspiration and the right support, you can deal with all of this.
[00:20:05] And the reason we're here and the reason I'm still doing this and I'm not planning on stopping anytime soon, and all of us, I mean, there's more than 50 of us in the company now, is to help you navigate these changes. We will help you navigate them through advisory work, through our academy, through Galileo, through our corporate membership, through our events. Whatever works for you. We are here to support you. I am excited about this coming year. I am very excited about the potential of AI and many, many more exciting things to come. I hope this gives you a slight peek into the big things coming in 2025. Next week, you'll see a whole bunch of new announcements from us. And stay tuned for a fantastic and exciting and probably tumultuous year ahead. Thanks, everybody. Please reach out to me or anybody in the company if you'd like to talk about what's going on in your organization or get more help on any of the topics I discussed. Bye for now.
[00:21:20] SA.
