Spoiler- This is not an AI centric post
4 Forces redefining the talent function
- Force 1- Software & Technology has been eating jobs and with AI , the appetite will be insatiable
- Force 2- Data driven Mathematical Corporation
- Force 3- Productivity & Performance will tend towards the Power Curve
- Force 4- The Talent Cloud will become ubiquitous in HR Strategy
Force1- Software & technology has been eating jobs - but with AI the appetite just might be insatiable
Image is from “How Technology Is Destroying Jobs ” by David Rotman MIT Technology Review- 2013
“Perhaps the most damning piece of evidence, according to Brynjolfsson, is a chart that only an economist could love. In economics, productivity—the amount of economic value created for a given unit of input, such as an hour of labor—is a crucial indicator of growth and wealth creation. It is a measure of progress. On the chart Brynjolfsson likes to show, separate lines represent productivity and total employment in the United States. For years after World War II, the two lines closely tracked each other, with increases in jobs corresponding to increases in productivity. The pattern is clear: as businesses generated more value from their workers, the country as a whole became richer, which fueled more economic activity and created even more jobs. Then, beginning in 2000, the lines diverge; productivity continues to rise robustly, but employment suddenly wilts. By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation. Brynjolfsson and McAfee call it the “great decoupling.” And Brynjolfsson says he is confident that technology is behind both the healthy growth in productivity and the weak growth in jobs.”
Entire para is from – “How Technology Is Destroying Jobs ” by David Rotman MIT Technology Review- 2013
While Brynjolfsson used data extensively from Manufacturing – here is my contention on why the knowledge worker job is headed in the same direction- i.e.- productivity will increase- but no concurrent increase in job creation , and wealth / compensation gaps will widen
I recently met a software tester with 14 years experience hired by one of the FAANG firms in India. The selection process took about 6 months – and the compensation offered was a base of 100,000 USD in India. While the Services companies in India – Infosys, Cognizant, TCS- would not have gone beyond 35-40,000 USD . That is the difference between the elite and the rest- and this would be further exaggerated by automation and AI coming in to take over the low-skilled tester roles.
Now consider this – About 12-15 years ago, there were small shops on every “digital corner” in New Delhi that would set up a basic website for your business for a mere USD 1000. If they had a bit more creativity could charge USD 2000 and even offer a bonus- logo design. These shops have all but vanished. The few that remain target the naive and digitally illiterate.
So where did they vanish- …from personal experience- Software ate them up. WordPress, Typedream came and put the low cost , low quality teams out of business. When I started AceProHR- I realised I needed to operate/ build my digital assets because the at the cost I could afford the quality was atrocious. It literally took 15 days of Youtube and Coursera sessions- and I made AceProHR with a plugged in Job board.
The D2C wave is being propelled by SAAS. You can use shopify & Dukaan and launch an idea for as low as 100 USD a month for the technology platform. 10 years back- it would require a small team to get your products online
In my opinion following products have made about half a million jobs across the globe redundant over a period of 15 -20 years
- Website- WordPress, Webflow, TypeDream
- E-Commerce- Shopify, Dukaan,
- Logo- Looka, brandmark.io, Canva
In the next 5 years as use cases for generative AI and associated tech improve- imagine the impact on junior and middle management roles. Even if they do not replace people- what will happen is as Brynjolfsson explained productivity will increase, but knowledge worker job creation will get decoupled from it and compensation growth!
This is the scenario when software and AI do to knowledge workers what Automation and Robots did to blue collar workers. The headlines below are just some of the use cases .
HR Impact of Software & AI eating jobs
- HR & CTO/ CIO will work closely together on identifying skills / roles which can be replaced by SAAS or AI
- HR + Tech teams in industries across the spectrum will have to decide whether Training / reskilling is a responsibility that they want to have — which leads to
- Philosophy/ Company Value question- Do we hire & fire or re-skill and redeploy?
- HR teams will lawyer-up- internal or external as people are let go
- Recessions combined with tumultuous changes like these have been unkind on DIE initiatives – let us see how many companies remain firm on their DIE goals
- And those who think the industry will ease into this change- you forget the basics- Capital does not give a **** about easing into a change- and if you are confused- ask the 200,000 “pampered” folks let go by some of the most profitable companies in history- Alphabet, Meta, Amazon, Salesforce… in the last 1 year and this leads to
- Get prepared for more vocal and local White collar/ Knowledge worker Labour unions
Force 2- Data Driven Mathematical Corporation
Organisations have access to huge pools of data being created across functions, processes and devices/ machines. Combine this with the advances made in compute power and applied analytics and data science and you have a Mathematical Corporation – Machines are moving from grunt work to Knowledge workers.
- Extreme compute power in your hands – literally! – The Apple iPhone 12, for example, is more than 5,000 times faster than the CRAY-2 supercomputer from 1985; which stood nearly 4 feet tall with a 5.5-foot diameter and weighed nearly 2500 kg.
p.s.- A twin-engine aircraft on a 12-hour flight can produce up to 844 TB of data- that is like 30 million books ( number of characters not information!)
HR impact of the Mathematical Corporation
AI & people working in tandem- While synthetic Knowledge workers are still some time away , working in tandem with AI will make for lesser knowledge work jobs and roles at junior and middle management . Machine Muscle and mental muscle will compliment each other as shown below and copied from the book The Mathematical Corporation: by Angela Zutavern and Josh Sullivan
Machine Muscle
- Comprehending / Expressing
- Perceiving Details / Patterns
- Number Crunching
- Remembering
- Documenting/ Organising
Mental Muscle
- Imagining
- Creating
- Deductively Reasoning
- Inductively Reasoning
- Structured Problem Solving
p.s.- the following 2 news are not a coincidence – I also had senior consultants approach me from the talent hub of a Big 4 – where entire practice lines were reduced to bare minimum
Not just for products and marketing . A/B testing will become prevalent for talent initiatives, and services as well Predictive Models will impact every sub-function of HR- whether its Talent Acquisition, Employee Engagement and training and development
But what requires more focus and research is the transformation of previously unstructured decisions into structured decisions- this has implications on organisation design, executive compensation ( hopefully ) and engagement .
one of the reasons given for huge compensation differentials between the top management and the rest is that the huge number of unstructured decisions taken by the top management- but with enhanced data analysis and ML- the machines should be able to present alternative scenarios and make these more structured
CXO Compensation/ gap with other levels should ideally reduce.
Force 3- The Power Curve will rule - productivity & performance
The power curve was traditionally used to define productivity/ performance in performance arts, sports, influencer income, – anything which has a disproportionate impact on a large audience-but soon smart firms and even smarter leaders like Steve jobs- started using it to discern between average and best in software, VC investments, design and now AI Augmentation will enable it to percolate it to other roles
- Recruitment
- B2B Sales
- Consulting
- Investmet Banking….and others
Impact of the transition to Power Curve on HR
- How do you justify Salary Differentials in an era of pay transparency- with a philosophy which says “You can never overpay a great player. You can only overpay a bad one.”
- How do you identify the High performers- the superstars- inside the company & outside
- How do you retain & engage with them
Culture ? - How do you build community & cohesive culture when there is 50X differentials in performance & pay
Force 4- The Talent Cloud will become Ubiquitous in HR Strategy
The coming Talent Acquisition Mandate
The talent cloud is not only a derivative of the factors mentioned above but also the following
- Talent / especially knowledge workers are easier to access through platforms like Deel- without having a legal entity in a particular country
- Use Case for Gamification platforms is now proven- eg Kaggle, innocentive now called Wazuko crowd
- Remote working use case was proven during the pandemic and better collaboration tools will make the experience seamless
- Interim leaders will be in great demand to not only deploy complimentary skills but also train the next generation of leaders.
References
- Using AI to make knowledge workers more effective – by Paul R. Daugherty and H. James Wilson- HBR
- How Technology Is Destroying Jobs ” by David Rotman. MIT Technology Review- 2013
- The Myth Of The Bell Curve: Look For The Hyper-Performers- Josh Bersin Forbes 2014
- We Need to Let Go of the Bell Curve- Adrian Gore HBR 2022
- The Best and the Rest: Revisiting the Norm of Normality of Individual Performance- Ernest O’Boyle Jr., Herman Aguinis,
- We Need to Let Go of the Bell Curve- Adrian Gore HBR 2022
- Ahead of the curve: The future of performance management- By Boris Ewenstein, Bryan Hancock, and Asmus Komm Mckinsey Quarterly
- Price’s Law and the Trouble of Operationalizing Performance
- Power Laws, Pareto Distributions, and Performance
- The Mathematical Corporation: Where Machine Intelligence and Human Ingenuity Achieve the Impossible- book by Book by Angela Zutavern and Josh Sullivan
- Win promotion in 2½ years or go, McKinsey now tells consultants
- Deloitte India offers ‘Golden Handshake’ to senior Partners aged 55 & above. Plans to elevate young partners.
- Technology is killing jobs, and only technology can save them- Brian Heater TechCrunch 2017