[Human] Capital Calibration

[Human] Capital Calibration

by | Aug 17, 2021 | Competencies, Corporate Culture, Covid-19, Economy, Future of Work, Hiring, Human Capital, Human Resources, Jobs, Labor Markets, Productivity, Work From Home

Manufacturing equipment has come a long way since 1964. The environment in which you put your equipment?  Back then, a somewhat level floor, a power supply, fans for HVAC, and what was a little grease on the floor? You turned it on, and assumed it would run.  When you invest in a sophisticated machine today, you may build a special room, complete with its own HVAC and filtration. You wouldn’t dream of operating this equipment without the needed care and calibration. Your organization ensures that those responsible for the care and upkeep of this huge capital investment have the requisite technical expertise to protect your investment; you wouldn’t dream of leaving it to someone that didn’t know what they were doing. Yet why are we okay doing that to our largest investment: our employees.

The current conversation about “back to the office” seems a lot more like 1964, the year that Gary Becker published his first book on human capital. He rocked the world of economics and business with his work on the value of human capital ––  people were one of your most valuable assets.  It paid to further invest in them now that their life span was longer and technological advances made new skill acquisition imperative.

We sit here in 2021 as the seeming randomness of Covid deaths and quarantining has given Americans plenty of time to pause to reflect on the meaning of life. For many Americans, they are finally understanding their worth as a unique model of human capital.  They’ve grown to understand the distinctive sets of skills that they have acquired, honed, and refined over the years AND the optimum conditions under which they perform.  When an employer doesn’t understand that, enter…

The Great Resignation

One of my favorite Total Rewards thought leaders, John Bremen, has written a great article, advising how organizations can turn The Great Resignation into the Great Hire.  He very rightly points out that more people have been hired in 2021 than have quit – which side of the equation is your organization on?

Solution? It’s not about going back to “the way we always did things.”  It IS about recognizing the conditions under which employees can turn in peak performance and earn their organizations more gold.

 

Olympic Memories

Olympic Memories

by | Aug 3, 2021 | Agility, Corporate Culture, Human Capital, Inspiration

Sadly, the necessities of adulting have kept me from watching The Olympics this summer.

My fascination started in the summer of 1972 –  all the flags, the flame, the whole concept of all of those countries coming together to compete.  Then in 1976, like the rest of the world, Nadia kept me glued to the TV.

My favorite movie, Chariots of Fire, is all about the 1924 Olympics.  Long before I could have ever imagined a career in HR, a story unfolded with great insights into how very different people could have the same goal: Olympic gold.

In reading a few of the articles about Simone Biles this past week, I was taken back to a scene in that movie; an aside moment after a very tense confrontation:

Duke of Sutherland: A sticky moment, George. 

Lord Birkenhead: Thank God for Lindsay. I thought the lad had us beaten. 

Duke of Sutherland: He did have us beaten, and thank God he did. 

Lord Birkenhead: I don’t quite follow you. 

Duke of Sutherland: The “lad”, as you call him, is a true man of principles and a true athlete. His speed is a mere extension of his life, its force. We sought to sever his running from himself. 

Lord Birkenhead: For his country’s sake, yes. 

Duke of Sutherland: No sake is worth that, least of all a guilty national pride.

While the rationale of Simone’s decision differed from Eric Liddell’s, the principle remains about understanding the source of someone’s talent, it is “a mere extension of his life, its force … We sought to sever [that] from himself.”

Returning to the 1924 Summer Olympics, it was hardly a time when people spoke of diversity, equity, and inclusion. Now imagine one of your most fantastic athletes says he will not “work” (compete) in his best event, his best chance at winning for your company (country) because it interferes with his core beliefs.  Do you accommodate and find a different task (event)? Or do you insist on treating everyone the same and risk severing people from what makes them unique? or tick? or from your team?

Our country has been catching up with a lot of the world during the Covid Pandemic.  Catching up in that many people have finally had time to reflect on the meaning of life, their life.  More on that next week. 

We’ve Seen This Show Before

We’ve Seen This Show Before

by | Jul 13, 2021 | Community, Compensation, Economy, Hiring, Human Capital, Inspiration, Jobs, Labor Markets

Lots of the country has been suffering from blistering heat.

Back in the days before most homes had air conditioning there was one really good way to escape the heat.

The movies.

If you weren’t around in 1947, you, too, may have missed “The Best Years of our Lives” which won multiple Oscars that year, including Best Picture and Best Director for William Wyler.  The story begins with the unceremonious way in which three returning WWII veterans must find their way back to their shared hometown, bonding in the process.  As the story unfolds, the viewer realizes that pre-war life didn’t necessarily dictate war-time rank, and that being a hero in one uniform, might not translate stateside. After watching our essential workers, who were called heroes at the height of the pandemic, it was uncanny to watch a wartime hero strive to earn a living wage once the conflict was over.

While there seems to be no excuse for NOT having seen this movie before, watching it now, as the U.S. is emerging from our battle with Covid, seems eerily fitting.

We’ve all been telling ourselves that never before have we had to deal with such a crazy labor market.  That people have never had to readjust after such a life and death struggle; so many have lost loved ones.  What about those that might never be 100% healthy again? How does our society and business world work around that? What about folks that have skills that are obsolete? How are workers supposed to retrain and reskill yet again? 

Whether you are trying to escape the heat, sit out a rainy weekend, or finally understand why everyone raves about William Wyler and his films, “The Best Years of our Lives” will knock your socks off. 

The U.S. has seen this show before, and after watching this movie, you will feel the resolve that we can get through this again, despite all of our collective wounds.

Painting a Vision of Childcare

Painting a Vision of Childcare

by | May 18, 2021 | Childcare Crisis, Economy, Human Capital, Jobs, Work Place

The U.S. Department of Labor has determined that 63% of families have both parents in the workforce. One of the many inequities brought to light during the pandemic is the lack of available, affordable, and consistent childcare for working families. It was a problem before the pandemic, for certain, but amplified by a health crisis that caused many of our nation’s flaws to be exposed. It seems that in defining, understanding, and admitting that our country has a childcare crisis, we might start addressing the issue holistically, knowing that there are no instant answers. 

In 2015, the Economic Research Institute authored an article highlighting that in 33 states and the District of Columbia, infant care costs more than average in-state college tuition. Staying home to care for a child is very often a financial decision. Additionally, when or if the stay-at-home parent re-enters the workforce, their salaries seldom can catch-up to those that did not opt out. According to the latest study by the World Economic Forum, overall female participation in the workforce as well as pay gaps have worsened due to the pandemic. Many of the pay gains realized just prior to the pandemic have been all but erased. 

What if young adults, particularly mothers in the United States, are done playing this high stake game? Last week we learned that we now have the lowest birthrate in 50 years.  This has longer term consequences for the US economy, and none of them are good.

Countries like France have had this figured out for years.  Mothers there receive 16 weeks of paid leave for a first child and a second child.  Once a third child is born, mothers receive a total of 26 weeks of paid leave.  Parents also receive monthly “early childhood” benefits to help cover the expenses of having a newborn and these benefits continue until the child reaches age three, when children typically enter school.  Current United States tax credits are nowhere as rich as what so many other countries offer.

Senator Elizabeth Warren has recently proposed a $700 billion universal childcare plan to ensure no family pays more than 7% of their income on childcare. Some variation of this solution is desperately needed to incent more parents to return to the workforce in a fashion that makes financial sense. Hopefully whatever is decided upon looks better than the finger paint art I saved from my children’s kindergarten classes. When a system is designed thinking about how families and children best prosper, parents can return to work once their infants sleep through the night, and things are a bit more sensible for everyone. Let’s get back to work while caring for our number one priority, our children and the future, in the process.

Reallocation & Retraining

Reallocation & Retraining

by | Apr 28, 2021 | Economy, Human Capital, Jobs, Unemployment, Work Place

Despite the headache caused by all of the labor market reading done for our last post, we’ve persevered.  

Some Chicago economists have had their thinking caps on, and their musings are worth sharing. They are asking the right questions as we contemplate labor markets and human capital post-pandemic.  

The Chicago Fed’s April paper focused on this:  Why didn’t more people from affected industries move over to industries that were NOT affected by the pandemic? “One sign that Covid might have increased the need for labor reallocation is the fact that even while unemployment rose substantially, firms reported an increase in job openings, the opposite of what normally happens in a recession.”

That article raised a nagging question:  Do workers lack the ability to retrain? The resources? Or the incentives?

One of Chicago’s most wry economists, Carl Tannenbaum, addresses the risks if people do NOT retrain. Solving these problems will not be easy, but he rightly points out, failing to address them will lead to even larger problems along geo-political lines. His piece’s topic sentence sums it up:  “Renewing human capital is as important as renewing physical capital.”

Solutions depend on cooperation and innovation. Education needs to orient to life-long upskilling, supporting a different concept of education before 18 and after 18, with government support. Companies must put their money where their mouth was when they signed the Business Roundtable document in 2019. If they create that ecosystem, they will retain workers for far longer—hiring based on competencies for life-long learning—and partnering with employees committed to constant up-skilling.

So many numbers, so little time

So many numbers, so little time

by | Apr 13, 2021 | Economy, Human Capital, Jobs, Unemployment, Work Place

This past weekend seemed a perfect time to catch up on some labor market reading.  

First topic: the real unemployment in the U.S. This article does a great job of explaining the difference between the monthly numbers released by the BLS, U3, and the more accurate measure of U6, which includes those whose unemployment benefits have run out, or who are too discouraged to look for jobs. After reading their estimate on actual unemployment, anyone would be discouraged. 

Next was an article in Crain’s Chicago Business regarding staff shortages in Chicago restaurants. Many factors contribute to this, including the current, enhanced unemployment benefits. In addition, until fully vaccinated, some are very reluctant to come back to the workplace, especially one that demands constant interaction with the unmasked public.  

Finally, the most recent Economist issue featured a special report about the future of work.  These articles point out some bright spots, including how quickly employment rebounded despite dire predictions, to how many jobs were NOT automated during the pandemic. The newspaper’s overall take is this: “Today, as the economy emerges from the pandemic, a reversal of the primacy of capital over labour beckons – and it will come sooner than you think.” 

So, the only conclusion for this firm? We will be spending much more time pouring over even more jobs data to make sense of how the labor markets are affecting our clients.