changes in the labor market
It’s not easy to identify a turning point of when exactly it will happen. Many of us are also wondering if what we are observing in this historic moment is not “finally” a sign of a radical change in the labor market that the people management cannot ignore.
In fact, the Financial Times recently wrote: “After 40 years in which capital has had the whip hand over labour, is worker power on the rise?”. If this really was the case, we would be witnessing an epochal change of direction in the economy of all the so-called “rich countries”.
The pandemic is indeed disrupting many things. From early retirement, to the return of people who emigrated to the big cities to their places of origin, as well as the care of young children who are psychologically at risk due to social distancing in their developmental years.
From 1985 until today, the representativeness of trade union organizations in the OECD area has been more than halved. Moreover, the real capacity of wages has not been proportional to the increase in productivity.
The reappearance of strikes even in countries like the U.S., where the unions have appeared in companies that are known to be non-unionized (Amazon, Starbucks, etc.), is therefore an interesting signal to consider.
And let’s not forget that President Biden has promised to be “the most pro-union president you’ve ever seen”. The European Commission, on the other hand, wants to prevent Gig-Economy organizations from circumventing minimum labor rights through the use of contractual institutions different from those of salaried employment.
resignation and big quit
Francesco Armillei, researcher at STICERD, also discusses a significant increase in resignations in the second quarter of 2021 in an interesting article from 25/10/2021. In Italy between April and June 2021, there were 2.5 million terminated contracts. Out of these, approximately 500 thousand were resignations (about 200 thousand women and 300 thousand men). The increase from the previous quarter was 37% and, in comparison with 2019, it was still more than 10% higher.
Some economists believe that the abundance of worker supply is decreasing, both as a result of post-pandemic effects (I’m referring to the topic of Big Quit, which also was caused by bad leadership) and demographic dynamics, mainly resulting from the aging population of workers in the OECD area.
observations on organizational support functions
During these days I am carrying out a series of stakeholder interviews with a client as part of a strategic project of cultural and organizational re-design. I was really struck by a conversation with the purchasing manager. She explained to me how this is the first time in her life that revenue might not come in because she won’t be able to supply the materials and subassemblies needed for production. This is despite the significant growth in orders.
In the People world, I heard a similar concern. Some quality people, involved in vital processes, are in fact leaving companies, right in the moment of greatest need. In particular, this is happening at the peak of their learning curve in the specific role, i.e. a couple of years after their insertion.
These are core process support functions that have always, more or less efficiently, contributed as business partners. What’s happening now is that these support functions are holding the helm just as much as, and sometimes even more, than their business colleagues might.
It’s no longer a matter of a few points off the price of a component. The issue is that components may not arrive at all and lines may be slowed to a complete stop. It’s no longer a matter of slow search, selection and onboarding processes. This is because there may no longer be people with the appropriate quality who are willing to work in that particular business environment.
but what is happening in people management?
What I am witnessing is an explosion of approaches and methodologies.
There is a willingness to modernize Employee Experience and Leadership models. So, it’s a rush towards Agility, OKRs, HR analytics, new organizational models from some very successful organizations, Collaborative Design. The latter being Service Design, Design Thinking, Human Service Design, etc.
I find it as a very interesting step forward, indicating the sense of urgency that the People world is experiencing. However, without a re-maturation of the fundamentals, it will not be possible to avoid desperate copy-pasting of other people’s business models. These models have been developed through a deep work of initial cultural change, which is missing in the copies.
Spotify is Spotify! It can only inspire us to realize that if we really want to do something innovative and different with our organizations, we need to engage in intentional and integral work.
It is necessary to offer colleagues the space to reflect and to search for the meaning of their actions in the organization, so that they develop the essential skills to sustain their own “why”. Therefore, it becomes central to work on a culture that drives many individual impulses in the same direction. And finally, with innovative approaches, unite all the stars in a constellation that will be unique and unrepeatable
the classic consulting models
A small number of people leaders do feel that their organizations are ready to address reshaping themes such as Purpose, Wholeness, and the strategic connection between intention, co-creation, and grounding.
But how can they take action? It is necessary to understand how to move through this “tangle” of buzz words (neologisms) and consulting models in which:
- “the past legacy has to be thrown away, it’s not compatible with the 6- or 8-step model that’s been implemented in cooler companies”
- “the result is certain: becoming a buzz-organization.”
- “change is made in the way we say!”
questions for the people management
I find instead that it makes more sense for the people management to create generative dialogue sessions with their CEO and then with their closest colleagues. Moments in which to question, observe and find meaning in respect to the harsh truths of the context. For instance by asking yourself:
- If the people who make a difference in this organization began to leave, what would happen? What would we be able to do?
- Why has the “people” aspect always been a priority for the company on paper, but in reality there is no real takeover at an adequate pace (as there is for all other aspects of the organization)? What could be a first sustainable step for us?
- How can we bring about the desired change by first stepping down from the managerial chair? How useful are we really prepared to be?
- Why do we apply ready-made theoretical approaches to people management activities? Why don’t we design and experiment with them instead, just as we do for the core process? What should we design or re-design first?
- Without the involvement of people, the reality will not change at the speed of execution which this complex world demands of us. Why do we pretend that this connection hardly matters?
reflections on integral transformation
I believe that we need to work deeply within the organization. A work that brings out the different positions and options, stimulates debate, even heated ones, among leaders, and then together generates a path forward for the convoy. Without this, it will be difficult to achieve the kind of integral change that CEOs are now partly aware of, but which they will shortly be demanding of the People function without discount.
The People world has a great opportunity to be a partner in the regenerative leadership that organizations soon will need to develop. All of this with the promise of focusing on real, contextual leadership questions and abandon the comfort zones of “me-too” approaches.
The risk is otherwise that at some point a future will emerge that is so compelling and incompatible that it will exclude those who are not prepared from the game.
working deeply in the people management
The People management should work in the Deep and not just in the Big. The Big is what appears on
the surface: Big Quit, Big Data, Big Challenge. The Deep is the search for the few things that give meaning to
acting in a given context and at that specific time.
Dear People leader, this is why it becomes essential to think in an intentional and integral way!
- For who and why do we exist as an organization?
- What do we want to be and how do we want to do it?
- What EssentialSkills do we need to integrate?
- What models can inspire us?
- What timeframes are sustainable for us?
Because even organizational transformation has its own leavening, and if we don’t respect it in terms of mode and timing, it will come out looking like garbage.
Over the years I have worked together with my colleagues in many organizations, and what I have learned is that:
- without a clearleadership question, you’re not going anywhere.
- setting the pace matters a lot, as well as defining the perimeter!
- you can’t insist on working at the top: the whole organization must be impacted by the idea of change.
- leaders make the difference not because of their certainty, but because of their intentions, their courage to express vulnerability to the organizational challenges they face. Finally, for their ability to inspire colleagues even in uncertainty.
In this way of proceeding, the experts in approaches come later! Only when we understand, as People function, who, why, how and what we want to be, can we focus on useful methodologies and tools. By acting in this way, we will not become a bad copy of anyone else. We will become unique and it will be up to others to try to copy us, and that will be very difficult for them, as for us now.