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4 Ways HR Can Help Accelerate Digital Transformations

Companies worldwide are launching rapid digital transformation strategies. Their goal: To keep pace with the increase in customer demand for seamless delivery of products, services, and experiences. So in many circles, the question becomes: How can HR help accelerate digital transformations?

To meet these lofty goals and expectations, departments within these organizations need the right technology and the right people. Otherwise, they might miss the opportunity to discover new ways of doing business and innovating through increased digitization. This means human resource departments have a significant role to play in digital transformation.

HR leaders must work alongside IT leaders to accelerate digital transformations and coalesce around priorities. For leaders to succeed in digital transformation, they must be on the same page while removing the barriers of a top-down, hierarchical approach. Leaders must work together to best reallocate resources and spread work and management of work across teams.

Plenty of well-intentioned companies nail the details of digital transformation. Details such as knowing what makes a good user story, understanding the difference between product and project, and finding opportunities to automate deployments whenever possible. The challenges arise with people, culture, and scale. That’s where HR can play an important role.

As many leaders have already learned, digital transformation affects everyone in an organization. Because they are so focused on the daunting task in front of them, this can be difficult for transformational leaders to think about. Proactively communicating with existing teams about how digital transformations will positively affect them and why it’s best for the organization, though, helps everyone.

Because in the end, digital transformation is as much a cultural transformation as it is a business and technology transformation.

Look No Further

The ongoing pandemic hasn’t slowed digital transformation. Despite layoffs and deep budget cuts at countless companies, a large majority (70 percent) of CIOs say their budgets and staffing numbers underwent reductions of less than 10 percent in the aftermath of COVID-19. The top priority of budgets in 2021? Digital transformation, of course. In fact, 77.3 percent of CIOs ranked this endeavor as the most pressing concern this year (ahead of cybersecurity).

So why should HR departments step in as a source for solutions to these problems? Well, the momentum from IT departments toward digital transformation is significant for HR. The reason is simple: Technology alone cannot make for a successful digital transformation. It’s a total team effort in which HR has a big role to play.

Yes, IT can take care of the technology side of the digital transformation equation. However, HR has a shared responsibility. Attracting, retaining, and reskilling the human actors who understand how to both derive value from technology and innovate new ways of doing business digitally is another piece of the puzzle. Without the right talent, even the biggest transformation budget won’t succeed. Teams need the right human resources in place.

Easier for Everyone

Here are a few tips for HR leaders who aspire to work in tandem with IT to accelerate digital transformation to achieve the ultimate goal of building products that customers want to buy and increase revenue.

1. Talk it out

Communicate with IT openly about the culture change and plan to distribute the emotional load. And start those conversations early. Hold discussions about how the culture might change and how some employees might not love the process of digital transformation. HR, technology, and product teams can also share the responsibilities to make sure digital talent and older business lines work well together.

2. Embrace change

Gain a solid understanding from IT on how roles will change as a result of accelerating digital transformation. As the stewards of human abilities within an organization, HR needs to know what qualities to look for in the next generation of talent. This talent pool will have new skills every year or so, making skills secondary to learning ability and work ethic. As an HR leader, you can help find the next generation of digital talent. Start by changing job descriptions to reflect digital values, such as adaptive learning and grit, rather than hard credentials.

3. Promote retention

In many organizations, HR controls (or has a lot of say in) promotion decisions. Digital transformations are a serious uphill battle for product and technology leaders everywhere. And one of the biggest momentum killers is top digital talent leaving an organization. This is especially disheartening when they leave because they feel transformational work is not rewarded or appreciated by the culture. Work with technology and product teams to rework incentives. Ensure the company rewards digital talent. And keep your focus on retaining the talent required to ensure enough forward progress.

4. Prioritize education

Develop new training programs with IT that promote collaboration, prototyping, and decision-making alongside technical skills. You can also help by preparing digital talent in cross-functional environments. As you do, know that maximizing teamwork will likely achieve better results than maximizing individual performance. Companies can expect to see more success in their digital transformations by training UI/UX designers, product owners, scrum masters, and engineers together. That way, students can practice the handoffs and negotiation skills required in a digital world.

It bears repeating: Accelerating digital transformation requires a cultural shift just as much as it does a technology or business shift. When IT and HR work together, they can create a more stable environment that makes digital transformation easier for everyone.

Photo by Wirestock

2021 HR Challenges: How to Connect, Recognize and Support Employees

We’re all ready to say goodbye to 2020 and hello to 2021. But even though a new calendar year has started, some of our HR challenges are likely to stay with us into the new year. Those challenges include how to best support employees not just in 2021 but in the years ahead.

The reality is that employees are tired and stressed; many are on the verge of employee burnout. HR and People professionals are feeling it too. In a recent survey of 751 HR leaders, 71% agree that 2020 has been the most stressful year of their careers.

Even as we move forward and look toward a better 2021, one of the biggest HR challenges remains: How can organizations best connect, recognize, and support their people as they lead them through this ever-changing, unpredictable environment?

A Focus on Digital Transformation

The data from the survey mentioned above shows just how important this question is to most organizations. Specifically, professionals elaborated on the biggest HR challenges ahead:

HR Challenge

When HR leaders have the tools they need at their fingertips, they have more time to focus on strategic initiatives; they spend less time dealing with administrative burdens. With a customized employee engagement platform, HR leaders can do more with less and make a more significant impact company-wide.

This is a win-win for their people, too. After all, these platforms provide a centralized place for employees to find vital company updates and help them stay connected to their colleagues. And they ensure stability in their sometimes unstable environments.

Making the shift to digital and modernizing your toolkit will set your business up for success in 2021. In a short time, digital solutions will leave you better equipped to face whatever challenges may come next.

Fostering Deeper Connections

mission mondaysUnsurprisingly, as many move into the tenth month of temporary remote work, people feel less connected. During these uncertain times and long periods of isolation, reinforcing your company’s mission, purpose, and values are even more critical.

With a dedicated employee communications tool, you can foster a sense of belonging and unity by sharing updates from various teams or leaders that your people need to hear from. For example, here at Reward Gateway, our CEO Doug Butler posts a weekly blog called “Mission Mondays.” Our people can comment on and react to that post, which helps build connections, boost visibility, and create a sense of community.

These updates are available on any device, at any time. That way, people can read them on their own schedules, whether that’s before their morning coffee, during a work break, or after the kids go to bed.

Keeping Workplace Culture Alive

Boosting morale for remote workers has always been important. And it’s no surprise leaders and co-workers must show appreciation for the hard work of employees. This is especially true now as employees may not be getting in-person contact with their colleagues or manager. Digital tools are also helping organizations improve workplace culture and reward and recognition programs across dispersed team members and support employees.

With an employee reward and recognition platform, HR leaders can spotlight all the excellent work happening across the company – even when others don’t get to see it every day. As shown below, available real-time analytics help HR teams know which departments are sending the most recognition. They also know which ones could use some extra appreciation, which helps boost collaboration and creates a culture of gratitude – even while working remotely.

analytics flow

 

The need to combat employee burnout and stress isn’t going away overnight. In 2021 and beyond, we’ll need to find better ways to connect dispersed employees. An improved reward and recognition program isn’t going to happen organically. But with the right tools, leaders can better face the HR challenges ahead. Specifically, they can connect, recognize, and support their people to set their organizations up for success in 2021.

 

To learn more about how Reward Gateway can help you future-proof your organization, get in touch today.

 

Photo by Visually Us

5 Best Tactics for Optimizing Remote Team Collaboration

Many companies have been doing remote work for some time now. But most haven’t yet optimized remote team collaboration.

Many businesses will remember 2020 as the year that forced them to go remote. And the reality is: Some have adapted more quickly than others.

While many managers feared the switch, citing fears over lost productivity, others embraced remote team collaboration. They recognized the trend that had been boiling under the surface for quite some time. In fact, what 2020 did was accelerate the ongoing changes already happening in the workplace.

The Workplace is Changing (And Has Been For a While)

As we look towards the post-coronavirus environment, we are likely to see more businesses adopt new ways of working. Those new methods will leave them better-suited to foster remote team collaboration. Those methods include management models based on trust, transparency, and more autonomy; digitization of all work; next-generation online tools for team communication, and; work management (more about this below).

For a long time, many have associated remote work with startups and tech companies. Indeed, our company Digicoop has operated as remote-first since our humble beginnings in 2015. While we do not expect more traditionally-structured companies to adopt a fully remote model – a hybrid one is more likely – we believe that businesses of all sizes can benefit from a more flexible environment.

Tried-and-Tested Tactics for Remote Team Collaboration

Whether you work with fully remote teams or your current model is a mixture of home and office working, there are five remote team collaboration tactics worthy of emulation. At Kantree, we started implementing these long before the pandemic began; we hope they will come in handy for your organization going forward.

1. Embrace a New Management Mindset, Company-wide

The changing, more distributed workplace requires an environment where employees take control of their processes. In other words: More trust and less micromanagement. This transition starts with the buy-in of everyone in the organization.

Within our team, which operates as a worker cooperative, we derive our approach from co-op values: Team collaboration, shared responsibility, self-management, accountability, and flexibility in terms of when and where you work.

When you hire the right people and trust them with such a high level of autonomy, teams will feel more invested in their work. They will produce better outcomes, allowing businesses to take full advantage of their skills and stay competitive.

2. Improve Communication with Synchronous & Asynchronous Tools

Once everyone gets used to operating remotely, the next crucial step in digital transformation and improving remote team communication is providing the right mix of digital tools. Without them, teams will be stuck with clunky spreadsheets, post-it notes, email overload, and the real productivity killers: excessive meetings.

What is the right mix? First, asynchronous tools (e.g., email or discussion boards) where team communication doesn’t occur simultaneously. Second, synchronous tools for real-time communication (instant messengers like Slack or Mattermost and video tools such as Zoom, Google Meet, or MS Teams). Lastly, flexible project management and work collaboration platforms like Kantree. These platforms enable teams to keep a pulse on their work from anywhere and at any time.

3. Digitize Work; Make it Accessible from Anywhere

Online work management platforms perform many functions. For instance, these platforms serve as project HQ for the whole distributed team: Remote, in the office, and on the go.

Kantree, for example, can replace spreadsheets and to-do lists. The platform also helps reduce email clutter with built-in tagging and project assignee features. And Kantree provides an overview of the work at hand (displayed as a kanban board, spreadsheet, timeline, calendar, or interactive checklist). Just as important for some, platforms like Kantree allow sharing chosen information with ‘external’ people, such as clients or other departments, limiting the need for conference calls. Teams can start any project instantly with workflow templates, from sales to IT to HR.

It’s important to remember that to ensure successful remote team collaboration, all work needs to be digitized, and everyone needs to be on board. Providing clear guidelines and training sessions at all levels while fostering a learning-oriented culture will help avoid frustration and reverting to old methods.

4. Encourage Self-Management and Accountability

Self-management in the remote business setting means two things: First, you are trusted by management to do your job and do it well, and; second, you trust yourself to organize your work in such a way as to stay productive and motivated.

In a company culture that encourages self-management, the project is the driving force and becomes “the boss.” The idea is that relaxing control-based management models will lead to a more engaged and content workforce, positively affecting the company’s bottom line and further growth.

5. Last But Not Least: Focus More on Employee Well-Being

More people than ever now work remotely (43% in the United States alone). That means many are still going through a period of adjustment. For some, it’s not an easy switch. This is especially true if you don’t have a quiet home office or need to juggle working remotely with homeschooling children.

Therefore, managers and teams must be empathetic and communicate openly about remote work challenges. Encouraging flexible hours, physical exercise, good nutritional habits (including proper lunch and work breaks) can help maintain employee well-being. Of course, this also helps keep employees engaged and performing at their best.

It’s Time to Do Remote Right

Digital transformation and fostering successful remote team collaboration don’t happen overnight. And, for many organizations, it may prove to be a daunting and time-consuming task. But with the right management approach, long-term strategy, and digital tools, building an effective remote team more than possible and is quickly done.

 

This post is sponsored by Kantree.

 

Adrien Olichon

[#WorkTrends] The Inspiring Power of AI-Driven Collaboration

How can AI-driven collaboration help extend our company culture to the remote workplace?

You don’t want to miss a single episode of #WorkTrends…  subscribe to the podcast now!

At TalentCulture, we have always been a remote workplace. So lately, I’ve found it really interesting to work with companies that are experiencing this for the first time. It’s been fun, and inspiring, watching them pivot so quickly — and to see them function so well within the digital workspace we already knew so well.

For these and so many others, the many actions and interactions that happen within organizations have shifted to remote. Communication, meetings, feedback, managing, planning — all now happen virtually. It’s been really exciting to see work teams make the transition and thrive, especially in the HR space. In the last few months, I’ve often felt the urge to virtually pat HR teams on the back as they realize they can, in fact, run HR remotely. As they do, they’re not just learning a new way to operate.

They are learning that Artificial Intelligence, or AI, plays a huge role in how they manage, monitor, measure, and lead their efforts.

Our Guest: Guibert Englebienne of Globant

That is why I invited Guibert Englebienne, the Chief Technology Officer & Co-founder of Globant, on this week’s edition of #WorkTrends. I wanted to talk about how AI-driven collaboration enables us to manage our work and engage our people in entirely different ways. And how the best forms of AI enable us to work together efficiently and creatively from anywhere in the world. 

I first asked him what makes today’s workplace so different from past versions. His response quickly left me impressed with Guibert’s passion for his work, and for helping HR teams: “Technology has accelerated the world we live in today. That fast-paced competition has made companies focus on delighting consumers. Now it’s time to delight employees as well.”

“The pandemic forced us to digitally transform the world overnight. Organizations suddenly found themselves in a broadly remote working environment. That creates a lot of challenges,” Guibert added. “It was natural, at some point, to start asking, ‘Is our team okay?’ and maybe even ‘Is it there?’ When we were at the office, we could see each other’s eyes. We could see if someone was okay. And very suddenly, that all went away.”

The Power of AI-Driven Collaboration

As we’ve talked about many times within the TalentCulture community, the human connection isn’t all that went away. We also lost our connection to our company cultures. Guibert agreed, “We knew we needed to continue hiring and growing without the ability to live and breathe our culture. So, we at Globant set out to digitalize our culture.”

As Guibert admitted, this was a real challenge. “Soon, though, using AI-driven collaboration, we realized we had created a social operating system that allowed for a more human organization. One in which we each connect to more people. We get to know them better. And at the same time we create a lot of collective intelligence for the organization, which allows us to be more adaptable.”

A Human-Centered Operating System

Guibert went on to tell us exactly how Globant created this human-centered operating system. He also shared how AI plays a major role in creating a culture that inspires while also helping decide exactly what kind of organizational culture we want to build. The conversation, while it left my head spinning a bit, made me realize just how far we’ve come since the pandemic started and just how far we can still go. You don’t want to miss a minute of this episode of #WorkTrends!

We’re not done talking about AI-Driven collaboration yet, though. Please join us next Wednesday, October 7th at 1:30pm for a special #WorkTrends Twitter chat. During what is sure to be an inspiring conversation, Guibert and the Globant team will help us answer these questions:

Q1: Why do organizations struggle with team collaboration?

Q2: How can AI-driven tools help boost creativity?

Q3: How can leaders use AI-driven tools to boost company culture?

I’ll see you there!

 

Find Guibert Englebienne on Linkedin and Twitter.

 

This podcast was sponsored by Globant.

 

Editor’s note: #WorkTrends podcasts and also our Twitter chats have evolved to better meet your needs! For details, check the new FAQ page. And to see upcoming event topics and guests, check the calendar listing on the #WorkTrends Podcast page.

 

Future-Proofing Your Talent: How Agile Talent Practices Can Drive Digital Transformation

What kind of talent will your organization require in the next five years? In today’s volatile and complex world, digitization, artificial intelligence and automation have moved the goalposts for workforce development.

Make no mistake: These factors are disrupting the world of work. The skills required to succeed in organizations are shifting — and this is having a profound effect on workforce planning and on the career paths of employees.

HR faces the new challenge of understanding which aspects of jobs can be automated — and of understanding the broader impacts, including the human element for the people involved, of digital transformation. In the face of technological disruption, it’s challenging to confidently predict what any role will look like in five years’ time. So how can HR teams coherently plan the skills and competencies that will be needed at each level of the organization amid the constant advancement of technology?

Here’s how you can use agile talent management to future-proof your talent and take advantage of the competitive advantage that technology now provides, based on research in our recent white paper on the topic.

Update Your Competency Framework

Today’s volatile world means employees need to fit into constantly adapting, agile project teams. It’s unlikely that your existing competency framework was designed to support agile working and digital collaboration.

Digital and technical skills will undoubtedly be needed in your organization. But at every level, individuals will also need strong interpersonal skills and evolved abilities. These “future-proof” competencies that allow employees to thrive in a 21st-century workplace are:

  • Learnability.
  • Agility.
  • Curiosity.
  • Drive to succeed.
  • Data handling.
  • Strategic solutioning.
  • Business acumen.
  • Virtual collaboration.
  • Digital communication.
  • Mental endurance.
  • A coaching mindset.

No matter what the job role is, these competencies will be required for success.

Build, Borrow or Buy Your Talent

You have three options for equipping your organization with the necessary skills:

  • Build: With a global digital skills shortage, it isn’t easy to hire specialist digital talent. Investing in your existing workforce is something that every organization can and should be doing.
  • Borrow: Creating partnerships — for example, with universities and other organizations — can provide short-term access to talent and expertise.
  • Buy: Purchase consultancy expertise either at an individual or organizational level. Or you could subcontract assignments to a third-party organization.

Realign Your HR Business Processes

It’s no longer enough to provide annual or semi-annual performance reviews. Your talent will need continuous and forward-looking feedback. Key performance indicators will change frequently as individuals change roles and move across different project teams.

Your reward and recognition practices should become more flexible — and more focused on the competencies and measures of success you want to encourage.

Focus on maximizing the “employee experience” in your organization. Remember, 80 percent of your organizational success will be driven by 20 percent of your people. If you don’t reward your key talent appropriately — or provide the right environment — you’ll lose them.

Make Roles More Fluid

With digital transformation, job roles are changing at a faster rate than ever before. One solution? Enable your talent to evolve at speed by moving away from traditional career ladders to fluid career maps. This can be done through articulating talent needs of the future and encouraging talent movement in the organization, with emphasis on enabling individual growth as well as building depth and breadth of capability.

To articulate needs of the future, workshopping what “good” (and also “bad”) might look like in the future can be very powerful. Subject-matter experts, line managers, incumbents and other key stakeholders can develop “success profiles” that help you forecast talent needs and create targeted development and retention initiatives. Ultimately, these insights will fuel the development of flexible, engaged workforces with deep expertise in a range of areas.

Additionally, an openness to gig working will serve your organization well. Gig working is rapidly becoming a dominant trend, particularly among knowledge workers. By harnessing gig workers with the right skills and attributes, it’s possible to bring the right talent to bear on the challenges of the moment.

Utilize Smart Talent Data

A key ingredient to future-proofing your talent is using smart talent data. You can significantly enhance the way you recruit and manage talent, and improve the candidate experience, by integrating your recruitment and HR systems. The resulting data can provide talent analytics that will help you make smarter talent decisions — and prove the value of your services.

By leveraging data, you can create “organizational heat maps” that highlight the jobs, geographical areas, departments and teams where talent is available or specific development is required. Digital transformation will necessitate ongoing development of existing employees. Proactively manage and develop your talent, whether that’s by facilitating internal mobility, creating development programs, offering coaching or mentoring, or by giving people the opportunity to work on specific projects. Successful organizations will be those that provide continuous learning and effective retraining programs.

Don’t Crush Your Culture

Emphasize people over process. Throughout the constant flux of changing roles and agile working, it’s vitally important that your organization retains an effective operational culture. Fundamentally people are at the crux of any major organizational change, whether it’s technology-driven or not. Therefore, your culture should be a key ingredient that attracts and empowers people as well as engages them so they want to stay. Strive to create a culture where employees don’t fear technology or automation, but instead recognize and appreciate how technology can help them do more, create bigger impact and enjoy their work.

Four Ways Tech Can Unleash the Power of Your Workforce

We often use the word Power to describe an innovation. Part of its power lies in its novelty — so when the newness fades so does our focus on something’s power. We’ve been focusing on tech for a good reason: Work’s transformation to digital is the essence of powerful. But our work depends on people: their ability to solve problems and innovate, to create, and to think about new tools we haven’t even heard of yet. A Harvard study found that human brains only stay focused on the present for about 53 percent of the time. So, let’s flip the script in the world of work and look at how to best leverage tech to unleash the brainpower of our people.

Why now? We’ve already entered what Deloitte calls “the big shift” and are about to transform again as a wave of AI and robotics hits. We’re going to need to fully understand the value of human capital — which we may start calling NI, as in natural intelligence. To do that, we’ve got to let free up some human bandwidth. Here are four suggestions for using tech to enable your people to use their brains:

Use tech to disconnect from tech.

It’s not counterintuitive: Ever-connected, ever-social Millennials, and Generation Z may need a cool app to reveal the power of disconnecting. I don’t agree that we all have screen-induced ADD or a shorter attention span than a goldfish. But more concentration time benefits everyone.

The new generations of project management and communicating tools have new shut-it-off options to stop push notifications for designated blocks of time, such as  Basecamp 3’s “Work Can Wait” and Slack’s “do not disturb” modes. Older workers may do a facepalm over the irony of using tech to create tech-free time. But disconnection is the new novelty now — it’s a powerful state of mind.

Use tech to tend the brain.

Some millennials prefer to be seamlessly tethered, even if the fitness tracker may turn out to be a time bomb. But exercise and going outdoors has proven benefits for cognition and productivity.

Employers can leverage the tech-body connection into fitness and wellness campaigns — using fitness trackers, mobile apps, or workplace rewards and recognition programs to catalyze lunch-hour yoga or team hikes. It may seem like a trivial pursuit to set up a powerwalk contest, but playing has been proven to be a potent mind-cleanser.

Use tech to let people go home.

We’re clearly over work/life balance as a new concept. The idea of either/or has completely lost its power. The new ideal is work/life integration — and tech is responsible. But this isn’t just a fad. It’s actually better for us than trying to balance between the two, according to research first published in the journal Human Relations and later reported in the Harvard Business Review. Of 600 employees, those with fewer boundaries between work and life maintained a higher level of overall job performance.

So let your people take that personal call, or work from home. Add remote conferencing or external access to your company intranet, and think about how to leverage any kind of performance and productivity tools to help everyone stay on track, no matter where they are. Get everyone in the habit of checking the workflow calendars frequently — in this case, push notifications are everybody’s new (and powerful) BFF.

Use tech to celebrate what tech is not.

Cognitive and AI is both exciting and scary when we start having robot-emotion fantasies. But for now, we’re still distinct in our humanity, in our behaviors, in our soft skills. Deloitte UK research looked at hundreds of job profiles and identified 25 critical “human skills” for the machine age. Social skills and cognitive abilities will become more and more important as technology evolves.

These skills are essentially human. So far, they can’t be automated. As automation enters the workplace, we need to find human talent using tools that help us better discern human qualities. Given the talent crunch, the intense pressure on recruiters, and the nature of work now, that means insightful pre-employment testing that doesn’t just check off a skills list, but can measure empathy, listening, communication, teamwork, prioritization, social perceptiveness. These tests don’t replace an interview. But they can be used to glean accurate profiles and measurements.

As our work and our lives become increasingly combined, and as work continues to transform — from centralized headquarters to a constellation of teams, from local to global, from brick and mortar to virtual — we have an incredible opportunity to re-connect with our own humanity. Different isn’t always better, but if we harness the tech that’s changing us, it will be.

Photo Credit: itwasharderbefore Flickr via Compfight cc

This article was first published on FOW Media.

STEM, Advanced Industries, and The Future of Employment. – Part 1

The marketing SVP I was sitting next to leaned close and whispered “what’s stem?”

He seemed a little hesitant to admit that he didn’t know what the term meant to the rest of the table, but as everyone was busy arguing about AI and robots replacing all of our jobs someday soon, he saw an opening and took a chance. The term had bounced back and forth across the table a few times: Stem this and stem that. Was it a biotech thing? Genetic-engineering jobs? (Because stem cells, I expect.) Some kind of government tech education program?

“S.T.E.M.,” I said. “Science, Technology, Engineering and Maths.”

“Ohhhhh,” he replied with a grin. “Tech jobs.”

Right. Tech jobs. Sort of. Not just tech jobs, but definitely the kinds of jobs most prized by companies right now, at least at scale.

A little background: I had just spent a chunk of my time on my flight to DFW reading up on global macroeconomic trends, and particularly how they relate to shifts in job creation around the world. (I have real hobbies, I promise, but I’m also kind of curious about a lot of tech-related topics. It kind of comes with the job.) So anyway, there I was, wondering if my newly STEM-enlightened neighbor would feel super psyched about scoring an impromptu mini-course in how STEM jobs impacted employment trends, and what we might infer about the US job market between now and 2025 given the shift to post industrialized… um… Yeah, no. He seemed like a nice enough guy, so we segued to HBO’s Westworld instead, and specifically how much of the hosts’ processes would have to be handled in the cloud, because that seemed less nerdy somehow.

Know your audience, they say.

Still though, this whole national job creation thing (which was a major piece of the presidential election discussion), and STEM, and IoT, and AI, and manufacturing vs tech… The convergence of these interconnected topics is filled with really interesting insights and catalysts for big ideas; so while my single-serving Marketing exec friend might not have been all that interested in employment data, or how STEM fields might play a part in creating a lot of new jobs in our increasingly digital economy, I find the topic particularly relevant to the world of digital transformation that we dig into here a little deeper every day.

Let me frame it in a way that will make the most sense. A lot of what we talk about here touches on the future of work: the impact of the cloud, big data, cognitive computing, the digital workforce, AI, VR, the IoT (and the IIoT), advanced analytics, 3D Printing, mobility, etc. – the tools and processes and methodologies – and how they are already shaping how companies will operate as our world transitions from yesterday’s operational models to new business models run party on ubiquitous, ambient, intelligent technologies. In other words, we usually focus on outlining and explaining various key aspects of the operational building blocks of Digital Transformation.

The topic that we are introducing today is a macro version of that. Instead of the future of work, its focus is the future of employment. Specifically: what type of impact will advanced industries and STEM jobs ultimately have on the job market? Will they help create more jobs than they eliminate? Will they help drive more economic value than other industries and job categories? Will they trigger an upheaval of the job market, and consequently force a reboot of how we approach education, both K-12 and job training? What will be the impact of these changes on the business world? How might companies, large and small, not only protect themselves from this wave of disruption, but take advantage of it to gain a strategic advantage in their respective markets?

These are the types of questions that we will try to answer in this series. For now though, let’s establish a set of baselines we will come back to in future discussions.

A Quick Introduction to Advanced Industries

The best place to start, as always, is at the beginning, and the beginning, in this instance, isn’t actually Digital Transformation, it’s Advanced Industries. The term refers to roughly fifty industries heavily centered around STEM and R&D. Among these industries are familiar ones like wireless telecommunications, computer systems design, automotive, healthcare, aerospace, biotech, household appliances, and so on.

  • 35 of these industries fall into the manufacturing sector. (This is important, so make a mental note of it.)
  • 12 qualify as Service industries (software publishers, wireless carriers, medical and diagnostic labs, etc.).
  • 3 fall into the Energy sector. They are: electric power generation, mining, and oil and gas extraction.

That’s right: 35 out of the 50 Advanced Industries are in the manufacturing sector. That’s more than two thirds. As we note the impact that the erosion of manufacturing jobs has had on the American middle class and the economic stress it has wreaked on blue collar workers, that’s an insight that caught my attention. So here it is: Insight number one – Over two thirds of Advanced Industries are in the Manufacturing sector.

Next, I wanted to find out how that translated into net jobs. The most recent numbers I had on hand were from 2013, but they broke down like this (rounded up or down for simplicity):

  • Advanced Industries – Services (12/50): 6.2 million jobs.
  • Advanced Industries – Manufacturing (35/50): 5.5 million jobs.
  • Advanced Industries – Energy (3/50): 700,000 jobs.

Two quick observations. The first: That’s all? (It didn’t seem like a lot.) The second: The ratio of jobs per industry category (Services vs. Manufacturing) looks pretty uneven. How can 12 industries produce more jobs than 35?

I know why. It’s a reaction, not an actual question. Rather than go off into a windy tangent on the ratio of manufacturing to services jobs, let me paint a quick picture about the evolution of the manufacturing space in recent years with two eye-opening factoids:

  1. Back in 1980, it took 25 jobs to generate $1M in manufacturing output. Today, it only takes 5 jobs to do that.
  2. A spot-welder costs an average of $25 per hour. A spot-welding robot only costs an average of $8 per hour.

It doesn’t take an economist to figure out where this is going. This leads us to insight number two: If you currently work in advanced industry manufacturing, and you already know that a robot can do your job at least as well as you can (if not better or faster), you may want to consider engineering a transition to a related advanced industry services field.

Naturally, my next question hovered around job growth and trends in advanced industries: Overall, are those jobs growing, shrinking, or staying flat? Is there an opportunity here for job growth on a mass scale that the general public may not be aware of? Let’s look at the numbers:

  • Advanced Industry Jobs (US) in 1980: 11.3 million
  • Advanced Industry Jobs (US) in 2000: 11.3 million
  • Advanced Industry Jobs (US) in 2013: 12.3 million
  • Advanced Industry Jobs (US) in 2015: 12.9 million

That’s a significant uptick since 2000, but unfortunately it isn’t exactly keeping up with overall employment numbers, or driving significant job growth:

  • Total employment (US) in 1980: 97.5 million
  • Total employment (US) in 2000: 135.6 million
  • Total employment (US) in 2013: 141.8 million
  • Total employment (US) in 2015: 143.1 million

To put this in perspective, advanced industry’s share of US jobs has shrunk, not grown, since 1980:

  • Advanced Industries’ share of employment (US) in 1980: 11.6%
  • Advanced Industries’ share of employment (US) in 2000: 8.3%
  • Advanced Industries’ share of employment (US) in 2013: 8.7%
  • Advanced Industries’ share of employment (US) in 2015: 9.0%

What’s interesting though, is that for the same time period, advanced industries’ share of output has been steadily growing:

  • Advanced Industries’ share of economic output (US) in 1980: 14.3%
  • Advanced Industries’ share of economic output (US) in 2000: 16.8%
  • Advanced Industries’ share of economic output (US) in 2013: 17.7%
  • Advanced Industries’ share of economic output (US) in 2015: 17.2%

Industry chart

According to The Brookings Institution, advanced industries have increased their productivity by roughly 2.7%/year since 1980, while the rest of the economy has increased its average productivity by an average of 1.4%/year. Following a similar trend line, advanced industries jobs now average $214,000 per worker worth of output compared with $108,000 for the average worker outside of advanced industries. And finally, while earnings for an advanced industries worker averaged $95K in 2015, workers in other sectors only averaged $53K/year. When we graph that data, we get this:

year on year growth chart

Also worthy of note: while advanced industries only account for less than 10% of US jobs, they are responsible for generating a whopping 60% of US exports, and their combined output accounted for a massive 17.2% of US GDP in 2015.

job share

Now let’s break things down to a more granular level: Advanced industries are made up of 50 different industry subsets. Are some of these subsets performing better than others in terms of job creation and overall growth? Have some been struggling? Let’s take a look:

50 different industry subsets

Insight number three: Nearly 80% of new advanced industries jobs between 2013 and 2015  – roughly 480,000 new jobs – were created in services industries, not manufacturing.

Insight number four: Nearly two thirds of that growth – roughly 307,000 new jobs – were created in four specific industry categories:

  • Computer systems design
  • Web search and internet publishing
  • Software products
  • Data processing and hosting

Do those four industry categories sound familiar? If you spend any time at all browsing through our insights and reports, they should. They are the sectors driving Digital Transformation.

Shifting back to blue collar jobs for a moment, advanced manufacturing industries didn’t do nearly as well between 2013 and 2015, but they still managed to contribute roughly 132,200 new jobs (about 20% of the overall advanced industry job growth). It could be better, but it could also be a lot worse. Here is the most interesting part: If you have been following the auto industry’s shift to electric vehicles and advanced navigation/self-driving systems in the last couple of years, you may not be surprised to learn that nearly 70% of those new manufacturing jobs (roughly 95,000) came from that sector.

Here’s a breakdown of how the entire ecosystem looks like:

ecosystem breakdown chart

Some Parting Observations

That’s probably enough data for one sitting. Now, let’s spend a few minutes thinking about all of this. What can we infer from the data we just looked at?

  1. On the whole, Advanced Industries appear to generate roughly twice as much economic value per worker as non-advanced industries.
  2. The highest proportion of new jobs in advanced industries can be found in digital services (what people generally refer to as “tech” jobs).
  3. Automobile manufacturing is showing the highest job growth of all advanced manufacturing sectors.
  4. While digital transformation and technological disruption are driving the growth of advanced industries, advanced industries, in turn, are both shaping the Digital Transformation landscape and controlling the speed of technological disruption.
  5. Speaking of technological disruption, advanced industries don’t operate in a vacuum. They impact millions of businesses by creating products and services that boost down-channel capacity, productivity, and profitability. (The impact of Digital Transformation.) There is an economic multiplier effect at work here that we will return to in a moment.
  6. On the opposite side of that business ecosystem is a complex supply chain that allows advanced industries to operate. Another multiplier effect can be observed there.

The first of these multiplier effects is far more difficult to measure than the second, so let’s start with the second: the supply chain. It is estimated that 2.2 jobs are created in support off every advanced industry job. (0.8 locally, and 1.4 outside of the region.) That means that we can add an additional 28.4 million support jobs to the 12.9 million advanced industry jobs in the US – for a total of 41.3 million jobs. Based on the 143.1 million figure we used earlier, that accounts for 29% of all jobs.

The second of these multiplier effects will require its own article, but until then, consider this: The application of new information and communication technologies (or ICT for short) has been demonstrably responsible for more than 1/3 of all labor productivity growth between 2002 and 2012 in non-advanced industries (like retail, business services, hospitality, etc.). As ICT become increasingly vital to every vertical and business discipline through the diffusion of Digital Transformation, the the compounded impact of the advanced industry sector’s innovation on the overall capacity, productivity, and profitability of US businesses will continue to increase.

Translation: A handful of key advanced industries are currently at the center of a tectonic shift of new job creation in the US – a first wave, if you will, whose ripples could feed industries around it if those industries are prepared to take advantage of them.

We’ll pick up where we left off in Part 2. For now, take this all in, let these numbers settle, and perhaps even take a moment to marvel at the dynamic connective tissue between the macroeconomic forces shaping the future of employment and the technological ones shaping the future of work.

Cheers,

Olivier

A version of this was first posted on Futurum.xyz

 

#WorkTrends Recap: Transforming Businesses into Digital Dragons

As we get farther into the digital transformation, more businesses are turning into digital dragons.

So, what’s a dragon, you ask? It’s an agile company fit to adapt, innovate and thrive even in disruptive times. The ever-popular unicorn tends to rely on risky and experimental business models. Dragons, however, are established companies that continue to leverage their original startup mentality to systematically innovate their way to profitability.

Built on purposeful reinvention, scalable market dominance, and a commitment to long-term success, dragons are increasing in popularity.

During this week’s #WorkTrends show, we were joined by author and CEO Daniel Newman, who recently co-wrote the popular business book, “Building Dragons: Digital Transformation in the Experience Economy.” Dan helped us explore and understand what it takes to turn a business into a digital dragon.

Here are a few key points Dan shared:

  • Small innovations can make a difference too
  • Culture and people need to come first
  • To have a culture of innovation you need people who believe in your business

Missed the show? You can listen to the #WorkTrends podcast on our Blog Talk Radio channel here.

You can also check out the highlights of the conversation from our Storify here:

Didn’t make it to this week’s #WorkTrends show? Don’t worry, you can tune in and participate in the podcast and chat with us every Wednesday from 1-2pm ET (10-11am PT). Next week, on Aug 10, host Meghan M. Biro will be joined by Jennifer Adams, head of global collaboration markets for Plantronics.

The TalentCulture #WorkTrends conversation continues every day across several social media channels. Stay up-to-date by following the #WorkTrends Twitter stream; pop into our LinkedIn group to interact with other members; or check out our Google+ community. Engage with us any time on our social networks, or stay current with trending World of Work topics on our website or through our weekly email newsletter.

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#WorkTrends Preview: Transforming Businesses into Dragons

So, what’s a dragon, you ask? It’s an agile company fit to adapt, innovate and thrive even in disruptive times. The ever-popular unicorn tends to rely on risky and experimental business models. Dragons, however, are established companies that continue to leverage their original startup mentality to systematically innovate their way to profitability.

Built on purposeful reinvention, scalable market dominance, and a commitment to long-term success, dragons are increasing in popularity. Come learn more about what it takes to be a dragon from author Daniel Newman, who recently co-wrote the popular business book, “Building Dragons: Digital Transformation in the Experience Economy.”

Transforming Businesses into Dragons

#WorkTrends Logo Design

Tune in to our LIVE online podcast Wednesday, Aug 3 — 1 pm ET / 10 am PT

Join TalentCulture #WorkTrends Host Meghan M. Biro and guest Daniel Newman as they discuss what it takes to be a dragon in the age of digital transformation.

#WorkTrends on Twitter — Wednesday, Aud 3 — 1:30 pm ET / 10:30 am PT

Immediately following the podcast, the team invites the TalentCulture community over to the #WorkTrends Twitter stream to continue the discussion. We encourage everyone with a Twitter account to participate as we gather for a live chat, focused on these related questions:

Q1. What are some key ways for companies to stay innovative as they grow? #WorkTrends (Tweet this question)

Q2. What technologies allow businesses to stay competitive? #WorkTrends (Tweet this question)

Q3. What are the most important qualities of a dragon? #WorkTrends (Tweet this question)

Don’t want to wait until next Wednesday to join the conversation? You don’t have to. We invite you to check out the #WorkTrends Twitter feed, our TalentCulture World of Work Community, LinkedIn group, and in our TalentCulture G+ community. Feel free to drop by anytime and share your questions, ideas and opinions. See you there!

Join Our Social Community & Stay Up-to-Date!

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