The War for Human Talent Rages On (In Spite of AI)
This article was featured in FORBES, you can read it here.
Beware, we are told. Automation is coming, pant the breathless pundits warning of A.I.-induced job loss. Ratcheting up the fear meter, presidential candidate Andrew Yang recently sounded the alarm for unprecedented employment gutting — not just among blue-collar professions, but white-collar jobs, too. Meanwhile, renowned studies paint a gloomy picture, one in which rapid A. advances kneecap our middle-class dreams, sapping the hopes of young people who are left to wonder: Will there be a job for me when I graduate?
And yet, the on-the-ground reality doesn’t fit these sour prognostications.
If anything, it offers good news for workers. According to Gallup, (would-be) employees possess more than a little leverage in the present job contest. “The data are clear: U.S. businesses are in a full-fledged talent war and employees have the edge — the demand for jobs exceeds the supply of workers, and employees are confident about their chances.”
In spite of media augurs seemingly bent on catalyzing another recession with nonstop talk of downturn indicators, the economy is okay. Actually, we’re living through history’s longest-running bull market. “This means employers must be smart about attracting and retaining the right people,” says leadership, culture, and compensation consultant Laura Conover. “They must also avoid the pay equity quagmire if they want to win the talent war without facing legal challenges.”
To Conover’s point, pay equity concerns are no laughing matter. This is especially true for businesses in California facing stricter employment rules than other states. In 2015, it passed the California Fair Pay Act which “prohibits an employer from paying its employees less than employees of the opposite sex, or of another race, or of another ethnicity for substantially similar work.”
“Still, while very few organizations would object to the need for such workplace protections in the 21st century, not enough are making compliance the priority it should be,” says Conover. No stranger to compensation disputes, Conover’s decade-spanning career has included litigation support. She has testified about economic losses in high-stakes employment matters for companies such as IBM and United Airlines. The United States Equal Employment Opportunity Commission also appointed her as a consultant on a compensation matter involving a middle market manufacturing company.
As a trusted advisor helping more than 300 organizations with compensation structures, she is used to contextualizing the complexities businesses face surrounding this issue. “Here’s how this works in real life,” she says. “Imagine I’m a hiring manager for a big bank wishing to attract top talent. It so happens we already employ a female branch manager. She’s been with us for a decade and earns $85,000 base salary a year. I also happen to be considering a white male who looks great on paper for the same role at a different branch. Because the economy is so sound and because this candidate could go to work elsewhere, I must offer an appealing salary — but one that still complies with the law.”
On its face, such a hypothetical challenge might seem simple. If it weren’t for a phenomenon called ‘ghosting,’ according to Conover. You see, our hiring manager has been burned before. Many times. And not just from white male applicants. Time and again, he found the ideal candidate. The person’s CV checked all the boxes. The interview went well. He/she seemed to be into working for his bank.
But then something surprising happened. As soon as the bank hiring manager made an offer which the candidate accepted (and was set to start work on a specific day), the candidate vanished into thin air. Poof. No returned calls. No emails back. Not even a breakup text. The candidate disappeared into the ether, presumably to work for the bank’s competitor — for more money.
Ghosting isn’t the only personnel issue haunting banks and other hiring businesses, but it’s certainly exacerbating the problem. It puts decision makers into a formidable quandary. How does a company navigate the pay difference tightrope? Pay too much to entice the right person and you might be accused of discrimination. Pay too little and risk losing the talent war.
As any admirer of Sun Tzu knows, intelligence can offer an army the needed advantage during hostilities. “Now the reason the enlightened prince and the wise general conquer the enemy whenever they move and their achievements surpass those of ordinary men is foreknowledge,” he writes in Art of War. So, where can employers turn for key intel on how to safely wrest talent from the enemy? They can turn to data, often viewed as AI’s secret sauce.
“Artificial intelligence excels at pattern recognition,” says Conover. “It can also make sense of vast amounts of info no one person could ever process.” In a similar fashion Conover uses a tech system evaluating data points to determine pay ranges with her clients. The software crunches data to build salary ranges for jobs based on three key considerations: organizational revenue size, location(s), and industry. Analogous to Zillow offering comps to contextualize home sale prices in relation to similar real estate fare, data-backed compensation analyses can suggest salary figures straddling the fine line between enticement and compliance.
But the talent war will not be won so easily. The proverb was right; money isn’t everything. Especially not to millennials who now compose more than half of the workforce. Widely misunderstood, unfairly maligned, the new generation is rewriting workplace rules, beginning with conventional thinking. Unlike their forebears, they are not as driven by monetary inducements. According to surveys, this segment values purpose over paycheck.
This revelation should send epiphany shock waves to companies hedging their recruitment bets on the allure of big bucks. “Culture eats strategy for breakfast,” Peter Drucker, the legendary management guru, once said. His statement couldn’t be more prescient in describing our employment age. Generally speaking, and once upon a time, Boomers and the Greatest Generation sucked up their workplace revulsion in service to higher values, such as pragmatism and stability. Today’s millennials are pushing back on that model. Rightly or wrongly, they desire deeper meaning in their jobs. As a result, they want to work for companies possessing positive cultures.
So, can AI and big data provide insight into the cultural challenge? To some extent, yes. Certainly, pattern insights and automation can offer value to any forward-thinking company. But it’s not enough. It turns out, people still make all the difference in the 4th Industrial Revolution. As evidence for this assertion, I can point to the recent book I cowrote with Neil Sahota, subject matter expert on AI for the United Nations, Own the A.I. Revolution: Unlock Your Artificial Intelligence Strategy to Disrupt Your Competition. In a related blog for McGraw Hill, we make this assertion: Thanks to robots, humans are finally in demand.
Due to extensive researching and writing about the future, Sahota and I have come to champion a people/computer symbiosis. In spite of so much hype about A.I.’s dangers, we see a positive sum outcome between mankind and our tools — our thinking machines. And at least for now, people do remain an integral part of the workforce. As such, this reality demands today’s businesses nurture the human element of their organization.
Conover possesses a similar mind. “Relying on big data analyses will only get you so far,” she says. “At the end of the day, great talent won’t stay, even with great pay, if they hate their boss.” As a result, Conover’s win-the-talent-war tactic involves companies marrying data analysis with good old-fashioned human intervention. Why? Too often, she observes companies possessing broken or non-existent cultures. Forget pay-range analyses. They won’t matter if a company and its leadership is sabotaging itself due to its own toxicity.
Jim Collins, author of Good to Great: Why Some Companies Make the Leap... And Others Don’t, echoes similar sentiments in his canonical book. Without the right thinking and structures in place, a company is as good as dead in the talent war. After all, the path to excellence begins and ends with the right people in place, cemented by the right culture. Or as he writes: “[leaders of companies] start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats.”
Ultimately, ensuring today’s companies take heed of Collins’ bus analogy requires guidance from compensation experts savvy with both numbers and people. “They need to be introvert/extrovert hybrids, says Conover. “Good with the data and the squishy EQ stuff.” Conover suggests they must also possess backbone. “They need to be able to stand up to leadership and say: ‘Look. This isn’t working. However, with the right assessments, informing the right goals, and coordinated with the right execution — we can turn this ship around. Not only that, we can be profitable and offer employees a great place to work.’”
Writing about ways in which employers can offer such enticements to win the talent war in the Automation Age seems wrong — or at least counterintuitive. Until we recall nothing is for certain. The late theoretical physicist Richard Feynman understood the need to wallow — and revel — in the unknown. “What is not surrounded by uncertainty cannot be the truth,” he once said.
The funny thing about AI is that it’s meant to be our greatest confederate in our campaign for truth. Yet, in spite of its promises, much about life remains unknown. In the absence of certainty as to the future of work, one thing is clear: The war for talent will continue to rage. In spite of so many dire warnings, for now, companies still need people. Lots of people. And the best way to get the right ones still requires the human touch. Assisted, of course, by a double-edged sword: technology.
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