Prof. Joe Fuller teaches management practice at the Harvard Business School, where he also co-directs their Managing the Future of Work Project. A 1981 graduate of HBS, he founded the global consulting firm, Monitor Group, now Monitor-Deloitte. During his three decades in consulting, Fuller worked with senior executives and policymakers on a wide variety of issues related to corporate strategy and national competitiveness. He has particularly deep experience in industries with a heavy reliance on technology, such as life sciences, ICT, and the defense and aerospace industries. Among other projects, he is currently researching the evolution of the role of CEOs and the C-suite in public companies.
The Big Picture: Overall workforce trends and what’s on the horizon
For business and political leaders, the big-picture future of work is all about impacts on the workforce, with its lack of skills availability and decline in participation. Joe explains two primary dynamics at play: 1) Demographics. The average worker is older, current immigration policy is incoherent and K-12 education is underperforming, which leads to 2) Under Qualification. While skills development/education have stagnated, skills requirements for the most important jobs are accelerating ever further beyond the reach of workers. Joe is particularly concerned because this trend is systematically undermining basic job opportunities with a living wage. Particularly in inexpensive metro areas, workers are not coming out of high school with the skills they need for employment. Equally concerning: An abundance of research suggests that those not into a job with a decent future by the time they’re in their mid-20s are unlikely to catch up. Meanwhile, on the enterprise side, companies don’t respond to workforce challenges by remedying them. Rather, they find workarounds, like offshoring operations or automating people out of the system. Says Joe: If you can’t get the workers you need, you’re going to deploy robotics, AI, and advanced sensor packages. In other words, jobs will simply be eliminated forever. What will be left are the more highly skilled jobs for which K-12 students are not being prepared. Joe sees it as a huge, profound social justice issue.
Pandemic and the long-term acceleration of digital transformation
Covid accelerated a bunch of trends that we’re seeing in the workforce, especially among white-collar workers easily able to transfer to remote scenarios. It redefined the term “essential worker” and, in many ways, the social and psychological contract between employers and employees, who have a completely different set of expectations compared with three years ago. The game has changed in terms of what employers are responsible for and employees are willing to accept. Pandemic reshuffled the deck by blurring lines on issues like flexi-time, child care. Joe believes these and other pandemic-related reassessments will stick over the long term. The Great Resignation isn’t so many people quitting as reshuffling, with travel and leisure workers, for instance, moving to better wages, benefits (such as extended education or family leave) at Amazon or Costco warehouses jobs. “Certain industries, particularly for those frontline workers, they’re going to have to rethink the value proposition” for workers, says Joe. And at the same time, the conversation has also changed among professional services workers, who have figured out that perpetual travel and separation from family isn’t the only way for them to make a living. Companies are having a reckoning with business as usual in what has become a hybrid world.
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Why low-wage jobs are hard to fill
The core issue with low-wage jobs is that an assumption of high turnover is baked in, which becomes a self-fulfilling prophecy. So there is constant poverty-line churn for workers in the hospitality industry, food service, transportation logistics – any sectors that rely on manpower because automation simply isn’t possible. And because turnover is so constant, it reinforces a reluctance on the part of companies to invest in retraining employees who are as likely as not to jump ship. So, the baseline for hiring remains quick ramp-up (i.e. simple, unskilled) which in turn perpetuates a lack of engagement, loyalty, or interest on the part of low-wage workers. Joe’s research indicates that in fact, low-wage workers in large part would prefer to stay where they’re working – and have friends, a reasonable boss, and accessible transportation. This population could be retained, says Joe, by creating pathways for them to add skills, become more productive and qualify for a raise or advancement. In other words, break the cycle of self-fulfilling prophecy. “You get that formula going and, all of a sudden, you start undoing that turnover machine,” says Joe. It’s a strategy that offers both desirable retention in a thin labor market and potentially deeper ties to the organization.
All about the data piece
Too few companies are systematically evaluating their turnover rates, parsing microdata that could provide valuable insights. Data analytics should be leveraged to analyze why one team’s average promotion rate exceeds another’s; inventories and price realization; and the state of the supply chain. It’s not happening enough in the management of performance and human assets, says Joe. Meanwhile, AI is working against companies by blocking some 27 million people from finding jobs. One of Managing the Future of Work’s studies, “Hidden Workers, Untapped Talent,” identified a huge cohort of people who aren’t hidden but rather screened out of consideration by applicant tracking systems (ATS) that process and evaluate candidates. This can occur because of all kinds of variables that may or may not be showstoppers: Criminal convictions, college degrees, omitted keywords, employment gaps. Fast and cheap recruitment processes automatically cull out a lot of resumes – and potentially viable prospects. “All those filters add up to create categories of workers who are often just excluded from consideration,” says Joe. “Veterans suffer from this quite a bit because the way they describe what they did in the military doesn’t match up with anybody’s job descriptions.” It creates artificial scarcity, exclusions based on maybe only one or two qualifying characteristics. Joe does, however, see for untapped workers in a Microsoft program that he is hiring (with great results) people on the autism spectrum – a population that might otherwise be screened out. “If you reach into those talent pools, you can get workers by making marginal accommodations, workers who are going to help solve your talent shortage,” says Joe.
For companies that want to stay competitive in the hiring game
Figuring out how to prevail in the scramble for talent is going to be a top strategic imperative for companies indefinitely, says Joe. Delegating the HR function and pursuing business as usual won’t work, nor will running the same old playbook. “Leaders have got to start thinking in terms of … using things like AI to understand what are the attributes of someone who’s good at a job and how to start looking for people on an affirmative or positive basis,” explains Joe. There will also have to be a systematic commitment to growing talent internally, whether that’s training low-wage workers to advance, creating compensated work-based learning opportunities, or structured high school and college programs focused on skills development. And Joe recommends de-emphasizing “more school,” which turns off people who associate it with academics, and instead focus on “more opportunity” and mechanisms for bolstering earning potential. Joe has seen the polling data and the sense of agency among American workers is there. It’s just a matter of engaging it. “I’m optimistic about American workers insomuch as they feel they own the problem,” says Joe. But there has to be a framework to support and activate that agency.
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Based on my viral LinkedIn image that was viewed by millions of people! This PDF will go over the 11 ways employees are evolving and will give you action you need to implement to adapt. Download it for free below.
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