Episode 262: Workforce Planning, AI & The Future of Work

Speaker A: Hello there. Welcome back to Talent and Growth. Very excited about today's episode. Today I'm joined with Ben Zweig, the CEO of Avelio Labs, based in New York City. And they're all about the data, particularly around workforce intelligence. So they index hundreds of millions of public employment records, and they've created the world's first universal HR database, which allows them to understand the workforce dynamics of any company. So they've got some really great insights, and Ben's got some really good takes on workforce, uh, planning, the impact of AI and all that good stuff. This is a must. Listen, here we go. Ben, when you look at the data, and of course you're looking at a lot of data all the time, um, what's the biggest workforce risk that companies are sleepwalking into right now?

Speaker B: What a good question. Okay, so a lot of risks. Um, I mean, ultimately, I think the biggest risk is hiring the wrong people. Um, and that could mean a lot of different things. I don't really mean this personally like, you know, having bad interview processes. I really mean, you know, building the workforce that they don't need. So. So I'd say it's more a workforce planning risk of doing workforce planning poorly. So. So, you know, the idea around strategic work, strategic workforce planning, is this idea of, you know, do you have the workforce that you need to fulfill your strategic objectives? So if, if, if as a company you want to, you know, build in a certain direction, you want to establish, uh, more capabilities in one area and, and less in another area, you really need to, uh, hire where you have more demand and not in areas where you have less demand. So I think hiring the roles, the people with the right skills, uh, to fulfill your strategic objectives as an organization, that's really important. And I think very few companies do this well. Um, and then there's questions about how do you do that tactically? Like, how do you actually find these, these people that will fulfill your objectives? Where are they in the world? How do you source for them? How do you identify what skills they have, what, what activities and capabilities that they're capable of delivering on? Um, are you hiring in the wrong market? That's something that happens all the time. So, yeah, I would say, I would say it all kind of boils down to hiring the wrong people. I would say that the flip side of that is retaining the wrong people. But I actually think that's less of a severe issue because there's a natural churn anyway. So it kind of takes care of itself with the passage of time. So not entirely like, it is important to make sure you're retaining the right people and being proactive about retention strategies. But I think being, uh, deliberate about who you're bringing in is just more important. It just looms larger.

Speaker A: Yeah, absolutely. I think on the retention piece is interesting. I think, um, a common challenge I hear of when I speak to startup founders in particular, as they kind of start going from startup to scale up, is the, um, is that reluctance sometimes to move people on who have been with the company maybe since the beginning, because perhaps those skills don't necessarily align with where the company's going and where they need to get to. Um, do you think that with these changes in what are deemed as necessary skills for whatever the future of work looks like, do you think companies need to be a bit more stringent, uh, on that and really assess taking emotion out of it? Um, because I know you should anyway. But it, but people do have emotional attachments to the people who work in their business. Do you think we should be a bit harsher around whether people are actually going to have the skills to move forward based on where we are with AI and things like that?

Speaker B: I do think we should be a bit harsher. Um, yeah, I think, you know, it's kind of an organizational choice. Um, so I think there's an advantage to having kind of this model of lifetime employment if you, if you build your business around that. So, you know, in, in Japan, famously, you know, they have this, they have this model of lifetime employment and there's, there's trust that you engender there, there's, there's more, you know, there's, there's like, you know, lower costs around attracting talent. There's like a culture that's adapted to that. I think that could work. It wouldn't be my preferred style. So I think, um, you know, it really requires a lot of, you know, sort of natural dedication and um, kind of commitment to the organization that I think just doesn't exist today. Um, of course it varies by geography. I think in the US where I am, it certainly doesn't exist today. So I don't think people really have the loyalty to an organization in ways that they used to. Um, so I think that kind of goes both ways. So the way I personally like to run my own organization is to kind of keep expectations high. And if someone's not meeting those expectations now, that could be based on their effort, their time, but it also could be based on their skill alignment and just what they're doing, whether it's adapting to the organizational Needs, um, if someone's not meeting that, I think it is helpful to be a little ruthless, um, because I think everyone else in the company gets that message and I think they feel good, you know, with the idea that they're on an elite team where everyone's delivering. So I think it creates a good culture. I mean, when I was at, uh, I used to run workforce analytics at IBM. And um, at IBM, they did not have that mentality. You know, there were, there were a lot of people that everyone kind of knew weren't, weren't quite contributing to the same extent as everyone else. And I think, you know, it was, it had problems, it resulted in problems like, I think it was demotivating.

Speaker A: Yeah, I can see that. Absolutely. And obviously we're talking about skills here and I guess if we dive into that a bit more, um, I know I've read before on some of your content that not all skills are valued equally. What skills are showing the biggest ROI for workers in today's market, do you think or not? You think that you see evidence?

Speaker B: Yeah, yeah. I mean, there's so much to dig into on kind of the, the micro skills, um, and, you know, kind of the, the technical skills that, that people need. Um, you know, certainly there's a lot to be said about, about various, various coding skills. Um, you know, especially, you know, with, with respect to, to kind of, you know, AI augmentation and, and whether. Whether there's more demand for hard skills and soft skills. The way, the way that I tend to think about it is through a slightly different, different lens. And I, and I think, I think you can kind of group skills into, into a couple different categories where one category is, you know, skills required to deliver some output to, to, to kind of implement something and, and, and deliver some work activity. So, so those are kind of execution, you know, you know, skills required to, to execute on various tasks. Um, but m. As a worker, we're not just executing on tasks, we're also coordinating between different tasks. And I think those coordination skills are, are becoming much, much more important. So we're all kind of managers of ourselves. We all have to think about, oh, what am I doing today? What should I do first, second, third, what are the dependencies? And I think as we augment our work with more technology and more automation, we're playing the role of that orchestrator, of that coordinator much more. So I think these skills about how to kind of manage yourself, how to, how to orchestrate tasks, how to coordinate between teams, these are, these are skills that are increasingly Important and also disproportionately um, present in more experienced workers. So we have seen a very meaningful decline in the employment and demand for entry level jobs. And that, you know, that that's in some way like this big, you know, this big mystery that we're trying to figure out as, as economists, as researchers. But I think my, my read on that is that, is that you know uh, entry level workers and young people have, have typically been, been hired to execute on tasks and not coordinate between tasks. So I think that's, that's something that I think is worth keeping an eye on.

Speaker A: 100%. It's something I thought about for quite a long time. Um, I think about my 2 year old son. What's he going to do in 10, 15, 20 years. But I think we see it across the board in recruitment. That very basic sourcing element can be replaced with AI. That's what a recruiter does when they start their job sales. Maybe some of those SDR responsibilities, they're not there anymore. Software development, the Mac, uh, manual testing, maybe that's not there anymore. So you can see it happening. Where are we heading with this? What do you think is, I suppose, let me frame that better. What do you think, uh, the impact will be on businesses if they don't try and create something for entry level people?

Speaker B: Uh, it's such a tough question. I mean I think, I don't know if the big result will be on businesses that don't have a space for entry level people as much as there's more opportunity for firms that, that do create space for entry level people. And maybe that is the same question. You know, maybe it's just, just kind of flipping it around. But I think for, for any, for any group that is like less in demand, where there's you know, call it a surplus of talent, um, adapting to that surplus will, will have you know, economic, um, economic advantages. So, so you know there is, there's a few, there's a few things going on. One is that maybe they're cheaper, maybe they're just more available and will, will have better, you know, better profile in terms of their performance, per dollar spent or per, per, um, you know, per, per unit of cost. And so, so that, that's one, that's one factor and that's just you know, supply and demand working out the way it should. Um, but I think that that gets bolstered even further by creating an opportunity to develop. So if you're a young person struggling to find a job, you probably do want to catch up to the rest of the market and develop these skills in coordination and develop yourself in a way that makes you more attractive to the market. And to the extent that a firm is willing and able to provide that, that, that path, um, then, then I think employees, you know, early, you know, early stage employees will view that more kind of as part of their training, more like as an apprenticeship or internship, um, and be, be willing to contribute even more per unit of cost. So I think there's kind of like. A really good fit for um, firms and employees um, that may require just a little bit of a, um, different model of the relationship between employees and employers. Um and it requires a little bit more long term thinking. Now it's a little hard to invest in that long term when interest rates are high and there's uncertainty in the market where there's more advantage to optimizing for the short term. But I think that can't really last forever.

Speaker A: Uh, I feel like we've got, I think there's going to be a tough period. I think we're all going to have to go through um, whilst we catch up to the pace at which AI is moving. And so the pace at which AI moves then uh, increases, uh, the sort of reduces the, so increases the amount, amount of time um, or skills you need uh, to be of value to a company because that gap's getting bigger and bigger and so actually the entry level would get, gets further and further away. So I do think there's a bit of a black hole there and I think I'm hoping someone's really looking at it. I'm sure people are but I don't know who. I haven't seen anything about it yet.

Speaker B: Really? Yeah, yeah, no, I think so too. I think one way to view that is that you know as, as the rate of change progresses the, their returns to firms being more adaptive um, are even higher. So, so you know there's, there's this wonderful paper called Adaptive Organizations that kind of um, presents, presents a paradigm of, of two types of firms, you know, adaptive firms and I forget what they call the non adaptive firms but, but um, firms that are like more procedural. So in a, in a procedural environment you have very clearly defined tasks and workflows and you know you can think of like this assembly line structure where everyone knows exactly what they should be doing and, and there, there's not a lot of fluidity in how people define their work and in those there is some real efficiency. So, so you know there's returns to specialization, um, and that's an advantage, but they're unable to adapt to an evolving landscape. So for a long time I think, I think those firms had an advantage. These procedural processes were just more efficient and those firms could produce goods and services at lower cost. Then there are adaptive organizations that have a totally different model where people do lots of things. They don't really know what they're going to be doing. They're kind of, they have to take on this breadth of responsibilities and they don't benefit from the returns to specialization, but they are able to make changes more rapidly. And I think now I would predict that we're going to see adaptive organizations thrive when procedural organizations falter and that I'd kind of be surprised if it went any other way. Um, but you do have this sort of division of types of firms where you don't see a lot of firms kind of in the middle. You either have um, more adaptive organizations or you have more procedural organizations. And I think um, it's very hard to kind of change who you are. So um, maybe it's a little bit of a depressing thought, but I'm not super optimistic that these kind of, you know, big procedural organizations will change. I think they will struggle until they're irrelevant. And I think we'll see, you know, younger, smaller upstarts, um, kind of eat their lunch. Mhm. So yeah, that's a prediction for you.

Speaker A: Okay, well, yeah, I'll bear that one in mind. If you could, in terms of predictions also, I guess, or advice. If you could speak to every business out there right now, give them one piece of advice around workforce planning they should make before the end of this year. What would that be?

Speaker B: Yeah, I mean, I think um, I think my, my biggest piece of advice is that, is that you really have to stay on top of the data. You have to kind of track where, you know, the organizational needs. You have to have a good, a good way of categorizing your employees. You have to have a good system for, for understanding, you know, what are the roles you have, the skills you have, the work activities you need, um, you know, and you know, you know, stay in touch with, with the uh, the internal supply, the, the, the, you know, the demand for, for what you're looking for and, and keep, keep tracking those, those market needs. I mean there's a lot of providers, um, of, of this type of data. Revelia Labs is one of them. Um, and, and that, that just is the thing you need to do to stay on top of, of the economy and your needs. And I think that that is just really important for organizations as they, as they try to, you know, as they try to meet their needs when their needs are constantly changing. So kind of setting up the structure where, where you can, you know, adapt in real time, where you can monitor new information as it comes in is just the important framework to, to set yourself up for success. So that would be my recommendation.

Speaker A: Uh, love it. Ben, thank you so much for being a part of talent and growth.

Speaker B: Yeah, likewise. Thanks.

Speaker A: Thank you for tuning in today. I appreciate you. If you're interested in, uh, being on the show or if you know somebody who'd be a great guest, got something to say, something to add to our talent acquisition toolkit, then do drop me a note ah, at Paul@talentandgrowth.co UK. And as always, please subscribe and follow the show. Cheers. Spray.