Not too shocking – those high numbers for job disruption by technology

Posted on by Stuart Murray
static halo. Photo courtesy of Bridget McKenzie.

Can you think of a time you took advantage of a new technology, and in the process came out way ahead? You’re going to need plenty of stories like this in order to take full advantage of the future of work.

I’ll never forget my first exposure to a pirated version of Microsoft Excel. I was in graduate school in 1994 and a young woman in my class, Bev, handed me a stack of eight floppy disks held together with a blue elastic band. She told me Excel was way better than what I was using. Six months later I had finished an entire graduate thesis based on clever charts and tables I had created using new software. Six months after that, I was at a firm in one of the towers in Toronto’s downtown core with experienced consultants lining up at my cubicle, waiting for some solid analysis. My mind had co-evolved around the technology, and I was valued.

For many months I was the only analyst on a team that had four consultants. When new technologies are brought in, sometimes one person can do the work of several peers. And this appears to be a concern today with incoming technologies, such as artificial intelligence, internet of things, and analytics.

Reports of Technology Eliminating Jobs Are Greatly Over-Stated

There has been some excitement lately about McKinsey’s report that 800 million jobs will be eliminated worldwide by technology. Reading the content of the report – not just the media coverage – I can assure you that it’s far less dramatic.

First, the 800 million jobs was the upside of a forecasted range, and the authors recommend considering the mid-point of the range, which is 400 million jobs. Those 400 million jobs are proportional to 15% of current work activities in the global labour market. These job losses are not expected to be immediate, as this is a forecast into 2030 – twelve years from the paper’s date of publication. This means the forecast is closer to 30-35 million jobs lost per year, which seems far more modest on a planet with 7.6 billion inhabitants.

But it gets better. Of the 400 million jobs lost, only 75 million jobs will be eliminated altogether. The remaining job losses will be in cases where parts of our jobs will be eliminated. About 30% of “constituent” work will be automated for 60% of occupations. That is, there will be bots taking care of the more mundane parts of our jobs. It remains to be seen whether this shift will result in 30% less employment, or if our outputs will just be more efficient. There may be a line-up at your own desk, with senior people increasingly reliant on your own unique, human-machine hybrid.

Is it Technology or Globalization That’s Eliminating Jobs?

This technological revolution will have more dramatic impacts on industrialized economies such as Canada, the U.S. and Europe. New technologies have a cost of implementation, and cost savings are needed to justify the investment. A lot of cost savings can be found in eliminating expensive jobs. But in the developing world, wages are lower and the gains of the new technology won’t always outweigh the cost. The trade-offs between hiring people and bringing in new technology often tips towards employing people in those places where wages are low. It’s in the industrialized world where we will see the most change.

In my opinion (not necessarily McKinsey’s), this will have an impact on political optics. Jobs will appear to be eliminated in industrialized economies and then magically reappear in the developing world. But the back-story is that technology allows work to be done with fewer employees and more machines in industrialized countries. And those western workplaces will have competition from countries where it is not optimal to bring in new technologies. The jobs created in developing countries will look like the same jobs that used to exist in the West. But that’s not what’s going on. Developing economies are just briefly immune to the more-expensive technology, for as long as those countries have low wages.

McKinsey also reviewed the history of technological change and found that there tends to be a net gain from new technologies. The technology benefits someone — the buyer, investor, or some new profession or trade. That someone spends money in a manner that creates different jobs, often by taking advantage of yet another new technology. Those 400 million lost jobs are likely to be only the downside of a net-gain from technology.

Development and Social Supports Needed to Remedy Workplace Change

This raises the difficult issue of things getting better on average. As I described in an earlier post, if one million jobs are eliminated and a million-plus-one jobs are created, this is a net gain of one job. In the minds of economists, this is considered progress. However, looking at the blow-back from voters in industrialized countries, it appears that we must now pay very close attention to the millions who were on the downside of this net gain. And perhaps you know some of these people.

McKinsey was all over this issue:

“Midcareer job training will be essential, as will enhancing labour market dynamism and enabling worker redeployment. These changes will challenge current educational and workforce training models… Another priority is rethinking and strengthening transition and income support for workers caught in the cross-currents of automation.” (p. 8)

Within the human resources crowd, we are experienced at either enduring push-back from unions, or anticipating labour’s response with meaningful policies and initiatives. But regardless of whether you are sympathetic to the underclass, or just trying to implement a new technology as quickly as possible, you can see that society’s success at adapting to this change will hinge on the personal experience of those who have lost.

Looking around us, it seems like we are all trying to get our footing, trying to figure out for that one special thing that sets ourselves apart. You might not be told ahead of time what that thing should be. In fact, you might need to figure it out entirely by yourself. But those who are always working on their angle will have a better shot than those who are relying on prior wins.

Sure, there might be an employer who is loyal enough to set you up for success, or a program or union that will help with the job transition. But as we take turns eliminating each other’s jobs, you might want to hold onto a dash of selfishness. If you can bot-boss your way into a superior level of productivity, you might become that one valued employee on the upside of a turbulent net-gain.

Either as a society, or as an individual, you need to write yourself into a story where you reached for the power cord and taught the corporate machine to work for you.

[This is a re-post of an article from March 8, 2018]

Be skeptical about predictions of the future workforce

Posted on by Stuart Murray
Happy Elsie. Photo courtesy of Martin Cathrae.

How much do we need to think about future job disruption and how it will affect our careers and the lives of our children? Somewhat, but don’t worry about it. There’s a cottage industry of hype and hysteria that grabs your attention and offer foolish solutions that are unrelated to the facts.

The BBC has a great audio article debunking the myth that 65% of future jobs have not yet been invented. Like the good journalists they are, the BBC looked into this “65% of future jobs” statistic and traced it back to the source. They found two authors citing a report that does not exist, at an institute which is reported to have been disbanded, in a jurisdiction (Australia) that doesn’t even recall an institute by that name ever existed. The BBC credits this discovery to blogger Andrew Old who critiques misleading statistics in the education field.

The BBC tried to re-create the 65% figure looking backwards.  Sometimes looking backwards at hard data produces better information than speculative forward-looking estimates. They found that one-third of jobs that exist today didn’t exist a decade ago. That one-third figure includes newly-created jobs where the role had existed somewhere in the labour market but not that position in that particular workplace.

An example would be new teaching jobs created because of population growth; it’s a pre-existing type of job that you could plan your career around, but the positions didn’t exist previously. Job growth allows us to move up in the world, change jurisdictions, sell goods and services to the newly-employed, and engage new labour market entrants coming from graduation, immigration, and returning to work after a break. From this perspective, it’s a very good thing that a large fraction of current jobs didn’t exist a decade prior. I hope this continues.

What Credible Sources Say About Job Disruption

Even still, there may be potential disruptions arising from automation, globalization, and demographic shifts. In an earlier post, I reviewed a McKinsey report that noted 800 million jobs will be eliminated worldwide by technology. However, 800 million is the maximum range of their forecast, and the mid-point is 400 million jobs. The time period is 12 years, so the forecast is 33 million jobs lost per year globally – small for a planet of 7.6 billion inhabitants.

Of the 400 million jobs affected only 75 million will be eliminated altogether, and the rest will have parts of their work eliminated. For many of the roles that have parts of their work eliminated, workers might become a “bot boss” of a new technology that causes people to be more productive, more valued, and experience greater job security.

In another post I reviewed a paper from the World Economic Forum about forecast job losses relative to forecast new opportunities. There is an abundance of opportunity for people to port their skills from a lost job to a new job. On average, we’re going to be okay.

To clarify, when these reports are created they say one thing, but the headlines exaggerate the findings and sell eyeballs to advertisers. Congratulations, the product is you. But wouldn’t you rather become the protagonist in this outrageous game?

How To Take Advantage of Future Work Opportunities

How do you get one of those great new jobs where you leverage the new technology? At the Young Employers’ Council at Inc.com, a helpful article advises people on How to Prepare for a Career That Does Not Exist. In brief, they assert four takeaways:

  • Develop a broad-based skill set
  • Build a large and robust network
  • Excel at whatever you are doing
  • Stay on top of the news and trends

You need to a broad-based skill set to adapt your way into anything new. When a novel challenge presents itself, it is common that there is not an existing skill to deal with it, so newcomers bring skills from their prior profession. I experienced this myself when I entered workforce analytics, bringing in two decades of experience from the compensation and labour economics fields. In addition to tools for modelling in Excel, I knew a few things about consulting, office politics, and human rights in the workplace, all applicable to the new role. By contrast, I have colleagues who bring insights from industrial psychology, mathematics, and engineering. The mixture keeps it alive, people covering each other’s blind spots. The ability to adapt your skills while working through a series of specializations can really set you up for the future.

But you also need to leverage your core education. Broad-based skill includes creating a hybrid of book learning and applied practical smarts. In a Fast Company article referencing undergraduate internships at Indiana University’s Kelley School of Business, they emphasize the development of “adjacent” skills that blur the line between classroom and workplace:

“Isabelle Bajeux-Besnainou, dean of the Desautels Faculty of Management at McGill University in Montreal, says it’s more important to focus on experiential learning… ‘We cannot teach skills we don’t know exist yet,’ she says. ‘We need a different strategy and make sure they’re becoming lifelong learners,’ she says. [She cites a study finding] that experiential learning reinforces theoretical concepts and leads to superior performance.”

In some postsecondary institutions, the new goal is not to prepare students for their first job, it’s to prepare them from a series of jobs in a string of wins-and-losses, on the presumption that there will be plenty of disruption in the future. This scenario requires an agile mindset, high social intelligence, and a personal history of changing context and perspective. There is a call for employers to develop this new mindset as well, but from a top-down perspective, suggesting that employees quitting for better opportunities is a good sign of a dynamic workplace and that employers should empower themselves to keep tabs on former employees as a valued resource over the longer-term.

Back to the Inc article, I think the habit of excelling at whatever you do is vital because employers see the act of excelling as a stand-alone attribute. If there is a brand-new skill area and the employer wants their organization to become excellent at this skill, they may have no opportunity to find someone who already has the skill, let alone have excellence in it. But they can find someone who had recently become excellent at something adjacent. The spirit of excellence is a superpower that can be applied to the new and unknown.

Critical Analysis of the News is More Important Than Ever

The Inc article’s comment on staying on top of the news is the most thought-provoking. My undergraduate degree is in arts, and I find that arts majors can out-perform others shortly after a major change. We know things have changed in the past, and will do so in future, and that some fads are fleeting while human nature persists. And if you don’t have an arts degree, following the news for a few years can give you a really good proxy for this mindset.

Let’s get back to that dubious figure that 65% of future jobs don’t currently exist. The original source was Dr. Cathy Davidson, founding director of The Futures Initiative at NYC University. She says in another interview she stopped using the 65% figure in 2012. In the BBC interview, when pressed on her figures she doubles-down and says that 100% of jobs have been disrupted by technology. But in my former life in compensation, many jobs – particularly in the trades and service sectors – still have accurate job descriptions from the 1970s. 

Then Davidson asserts that the one thing that has not changed is our education system. But I follow the K-12 sector and over the last few decades have seen a number of impressive changes that are grounded in robust research. My three favourites are the boom in early interventions for special needs children, improved vigilance on preventing bullying, the sophisticated and nuanced use of technology in the classroom, and the shift to experiential learning built around the student’s intrinsic motivation.

Sorry, that was four favourites. You caught that, right? If you didn’t, you need to learn how.

What If You Can Do It All?

Posted on by Stuart Murray

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Costumes. Photo courtesy of Joel Kramer.

Adaptability is turning out to be a smoldering-hot skill-in-demand.  And lucky for me, I just discovered that I’m part of a newly-defined category of high-functioning misfits.  There are people who have a diverse range of interests and must stay in that varied space to function at their best.  That special thing where I change obsessions all the time is not a flaw. Instead, I can simply join the subculture of people who cherish adaptability.  Maybe you can join me?

The TED talk by Emilie Wapnick is called “Why Some of Us Don’t Have to Have One True Calling.”  Her talk takes-apart of the presumption that we must find that one thing we’re passionate about and strive to be the best at that one thing.  Yes, there are people who are specialists at heart.  But that style doesn’t work for everyone.

For those who change interests frequently, Wapnick has coined the phrase “multipotentialite.” These people have multiple areas of potential strength into which they can grow in irregular busts of enthusiasm and learning.  Multipotentialites have three super-powers, which happen to be powers that are desperately needed in the smart machine age:

  1. Idea Synthesis. Combining two or more fields, generating an innovation at the intersection.
  2. Rapid learning. As experienced newcomers they “go hard” into each new learning area.
  3. Adaptability. Morph into whatever is needed in every situation.

Idea Synthesis

I discussed hybrid skills briefly when reviewing Josh Bersin’s forecasts for 2017.  Bersin asserted that combining two unrelated skills was an emerging trend in the future of work.  Job descriptions where employers demand a single skills bundle are falling out of favour.  Instead, people will rock their workplace by bringing together two or more skills that aren’t normally seen together, such as coding skill and sales.

At research universities it is understood that the best research is often found at the overlap between disciplines.  In a 2003 article in Science Magazine, Elisabeth Pain notes:

Multidisciplinarity has a LOT to offer to early-career scientists in terms of opportunities and excitement. The Human Genome Project, the World Wide Web, and the boundaries of the infinitely small are only a few of the fertile fields where new research is flourishing. Those scientists who have taken the plunge swear by multidisciplinarity and will even say that you won’t be able to survive in science if you don’t keep an open mind to the advantages afforded by multidisciplinary approaches.

If you have ever been on a cross-functional work team, you may have noticed some special skills are required; trusting the expertise of those in other areas of knowledge, taking for granted there is no tradition or external reference, and working towards common language with the absence of jargon.  I find that common language is particularly interesting.  I was on one project where almost everyone had a different professional vocabulary, a different software language, and a different mother tongue.  I had to speak slowly and clearly, putting relationships first.

Emilie Wapnick, in addition to her TED talk, has a great website called “puttylike” (with a mailing list) which includes a brief overview of how she has helped people identify their hybrid expertise and turn it into a “renaissance business.”  She encourages people to bundle their interests under an umbrella concept, identify how two concepts can be woven together, and name the lens through which they look at the world, with that lens being their unique offering.

Adaptability and the Growth Mindset

Adaptability is becoming an critical skill.  Natalie Fratto in an article in Fast Company asserts that adaptability “…will soon become a primary predictor of success, with general intelligence (IQ) and emotional intelligence (EQ) both taking a back seat.”  Fratto thinks the current interest in emotional intelligence has happened already making the next new thing compelling.

Fratto links adaptability to the concept of having a growth mindset, the idea “that your qualities can improve with effort and experience…” according to another article in Fast Company.  By contrast, those with the old status-quo view have a fixed mindset, which presumes our qualities are stable over time and our previously-accumulated knowledge and record-of-wins is a reliable measure of future worth.  People with a fixed mindset are not keen on receiving feedback, are judgmental of others (making performance stereotypes), and don’t put effort into helping people grow.  In the Fast Company article, Rusty Weston quotes Carol S. Dweck when discussing her book on the topic Mindset, the New Psychology of Success.

“As you might expect, growth oriented managers are more likely than fixed mindset managers to accept feedback or embrace change. ‘The irony of a fixed mindset,’ says Dweck, ‘is you want to be so successful so badly is that it stands in the way of going where you want to go.’”

Angela Duckworth has also created a quick video that explains the two mindsets clearly.

How Fast Can You Learn?

Josh Kaufmann is the author of The First 20 Hours: Mastering the Toughest Part of Learning Anything.  I tried to read it several years ago but I learned so much from the first thirty pages I put it down and moved on.  If you have even less patience than that, his TED talk covers the same topic.  Kaufmann offers a rebuttal to the book Outliers in which Malcom Gladwell cited research that to accomplish world-class performance you need 10,000 hours of deliberate practice.

There was a flaw in the way Gladwell’s writing influenced public thinking.  Yes, you need 10,000 hours to become exceptional, but what if you only wanted to be “good enough” at a certain skill?  Kaufmann found that in that case you only need to commit 20 hours.  But you must apply these 20 hours in a particular way.

  1. Deconstruct the Skill: Define the skill and break it down into smaller pieces. Many skills are a package of several sub-skills, so identifying and learning sub-skills in sequence will move you quickly towards the packaged skill.
  2. Learn Enough to Self-Correct: Learn just enough that you can self-edit and self-correct.  In keeping with permission-to-fail you must be allowed to try things out, occasionally fail, learn and reflect on the mistakes, then try something different in a continuous loop of learning.
  3. Remove Practice Barriers: You need a devoted time and place where nothing pulls you off-course. No internet. No kids. No work. Just you and your learning.
  4. Practice At Least 20 Hours: Persevere, don’t give up if you’re feeling stupid and frustrated after a few hours.  Getting past that wall is a major performance barrier, so just keep going.  In this case it’s just perseverance: a good IQ will not save you.

Kaufmann finishes his TED talk by performing a medley on the ukulele, after having just spent 20 hours learning that one skill for the first time.  He’s not going to sell an album, but he was pretty good.  Well done!

For me, changing obsessions makes work seem like a series of action films.  I see a future in which teams of people with unusual talents are carefully put together, in a manner that resembles movies like Ocean’s Eleven, Seven Samurai, and the first part of Lord of the Rings.  The teams develop their way-of-talking, their manners, their code that none of them truly works in isolation.  They change as individuals in a manner that co-evolves with the world they are taking advantage of, the world they are shaping.

Then they’re done.  And onward to the next adventure.  Onward to the next obsession.

Interracial Couples are Eroding Racism

Posted on by Stuart Murray

hands-2604868_1280, CC by pixabay

Do you ever get pressure to choose between two ways of thinking?  Yeah, I don’t like it either.  Personally, I have always been intrigued by the lives of those who straddle categories.  Unless it’s on a chessboard, there’s nothing pleasant about dividing things into black versus white. The state of our discourse has been reduced to binary arguments that strip away our ability to have nuanced conversation. That is not who I am and not what society is meant to be.

Research shows that opportunities and opinions go in circles within cliques, and that people within those cliques are usually very similar.  If you were organizing a workplace or a community towards mutual understanding and opportunity for all, you would want to open up those cliques.  And if you personally wanted to break free you would need to make inroads into new crowds.

So how do you break down cliques? Nobody does it better than people with a foot in two worlds.  I personally find this interesting because I have a background in the labour movement, but I have since moved into human resources.  I have had some wild conversations about what people think the union ought to do, and what I assert the union is certain to do based on their history and their purpose.  But that’s lightweight compared to what some people have experienced.  Some people straddle worlds by changing nationality, by seeking education beyond what their parents had achieved, or by switching religious or political affiliation.  Others are born into two categories, including those who are biracial.

The Loving Generation and Emerging Career Equality

Anna Holmes wrote an interesting editorial in the New York Times in February 2018.  Holmes is a member of the “Loving Generation,” children born to mixed-race couples shortly after the Loving vs. Virginia supreme court ruling.  The 1967 case struck down laws prohibiting black and white couples from marrying.  More mixed-race kids were born soon afterward, heralding the arrival of a new and more prominent hybrid identity.

When Holmes was in her early thirties she began to compile a list of people who, like herself, were part of this cohort.  The list included public figures in sports, entertainment, and politics such as Derek Jeter, Halle Berry, and even Barack Obama.  When she looked to leaders, she found black communities where the leadership was disproportionately mixed-race.

Holmes perceives that mixed-race people can call upon their whiteness to open doors.  Members of the Loving Generation have a comfort with white people because of their upbringing, and often presume that they can do just as well as the white side of their family.

Holmes spoke with Mat Johnson, author of the 2015 novel Loving Day.  Johnson notes,

“If we are a segment of the African-American population that has access to power and privilege, what does it mean ethically to live that life?” For his part, Mr. Johnson said, it means making a sustained effort not just to acknowledge his privileges but to use them to help those not similarly situated. He paused, then added, “I think it’s valid to point this out even if it’s uncomfortable.”

If you have an advantage, you can still take care of yourself.  But you still have a responsibility to others who do not have that advantage.  It’s a good leadership principle for people of all backgrounds.

But wait, what about white people who have an abundance of privilege?  Do they perceive that they should help others?

Anxiety About White Decline is Sensitive to Data Definitions

Over at the Washington Post, Dowell Myers and Morris Levy cite some interesting research about anxiety amongst American whites over the multi-decade decline of the white majority.  While some people want to hold onto the advantages of their “category,” the definition of this category is not so robust.

What they uncovered is that there are six different forecasts for the prevalence of whiteness in America based on different definitions.  In all data analysis your data definitions have an outsized impact on what raw data comes out, how it is analyzed, and how it will be interpreted – even by an unbiased researcher.  The forecast showing a white majority disappearing in America by 2042 relies on people identifying as white and no other ethnicity.  It’s equivalent to the one-drop rule from the 19th and 20th centuries in the US.  Under the one-drop rule both parents must be white for someone to be categorized as white, with that rule carrying back into all prior generations.  It’s an archaic definition that lends itself to conservative assumptions.  But there are other ways of looking at things.

Myers and Levy draw attention to their own research on this topic.  They ran a controlled experiment sharing two simulated news stories using similar race projection data based on different definitions of whiteness.

The first mimicked the conventional [one-drop rule] narrative about the decline of non-Hispanic whites. The second …mentioned the rise of intermarriage and reported the Census Bureau’s alternative projection of a more diverse white majority persisting the rest of the century.  …Forty-six percent of white Democrats and a whopping 74 percent of Republicans expressed anger or anxiety when reading [the first story] about the impending white-minority status.  But these negative emotions were far less frequent when participants read the second story about a more inclusive white majority. Only 35 percent of white Democrats and 29 percent of white Republicans expressed anger or anxiousness about this scenario. [Emphasis added, paragraph breaks removed]

In brief, one quarter of Democrats and two-thirds of Republicans who would normally be anxious about the decline of the white majority have more positive feelings about the emerging population of hip mixed-race semi-white people, whom they readily regard as kin.

Change Our Definitions, Change Racism

These findings imply that when we measure ethno-cultural background for Employment Equity purposes, we need to allow people to choose multiple ethnicities.  Also – and this may be controversial – we need to start reporting on the representation of the white population in a manner that empowers the new hybrid definition.  Sympathetic white people are a target audience for equity reporting.

I have a self-image that I’m one of those non-racist people who is unbothered by white decline.  But if I happened to be one of those coastal urbanites who was deluded about their own implicit racism (you know, hypothetically) then this new mindset would affect me.  I look to mixed-race couples and biracial kids and think, yeah, they could totally grow up in my neighbourhood, work with me, and become family, no problem.  It’s a gateway into general tolerance.

By blowing-out binary categories we can think expansively about being human and embrace complexity in an era of rapid change.  We cannot let demagogues simplify us; we need to become contradictory and cosmopolitan people in order to be true to ourselves and be comfortable in our own skin.  Only then can we freely consider all of our options and seek every opportunity that we choose.

[Hat-tip to Guy Kawasaki for sharing the Washington Post article on LinkedIn]

Women’s Financial Security Depends on Their Own Courage

Posted on by Stuart Murray

Too little to think twice about jumping. By Rob Briscoe
Too little to think twice about jumping. Photo courtesy of Rob Briscoe.

Does it seem unfair that men can carelessly do what they want with money when women can’t?  Well, it is unfair.  But women’s attitude about money has a huge impact on their financial security.  Fear itself might be causing women to be less financially secure, by weakening their moxie.

In an October 2017 report, Mercer published the report Inside Employees’ Minds – Women and WealthTM.  In brief, women are more worried about financial security than men, and the worry and fear de-motivates women from taking full advantage of programs intended to help them improve their finances.  The report is based on a survey of 3,000 U.S. employees in late 2016.

Financial Wellbeing is Part of Workplace Wellbeing

The report asserts that financial wellbeing is “a core pillar of total well-being.”  Wellbeing is not just about physical and mental health. Our ability to seek the comforts we desire, make meaningful connections with others, and achieve our financial goals are all amongst the things that make us well.  New wellbeing efforts foster self-awareness about our individual goals, and a sense of self-efficacy and autonomy over our lives.  These efforts imply a workplace culture of free-flowing information, respectful discourse, power sharing, and building intrinsic motivation.

In employee engagement surveys, wellbeing is often a hygiene topic.  Hygiene topics are important-when-bad; things such as physical safety or sexual harassment. Hygiene topics are important to identify because the policy imperative is to not to make the topic positive, but to make them “not negative.”  They need to be good enough that you can forget about them.

When employees feel that they lack control over their personal finances, they worry – at home and at work.  People need to learn how to improve their finances if only to stop being distracted by them.  Therefore it may be necessary for employers to express concern about the personal finances of their employees.  And women and men think about their finances differently.

Women’s Financial Courage Affects Their Financial Wellbeing

The analysis shows a major difference between men and women, with men once again coming out ahead.  “Whereas 62% of men scored in the medium-to-high or high range on Mercer’s Financial Wellness Index, only 41% of women scored in this range.”  Why is this so?  The report identified that financial courage is a major driver of financial wellbeing. Forty-nine percent of men exhibit high or medium levels of financial courage, compared to 30% of women.

Financial courage is made up of items such as attitude towards finances, time spent worrying, financial planning preferences, and a person’s self-assessment of their financial knowledge.  It turns out that courage is more important than underlying knowledge, consistent with the trend that personality can be more important than IQ.  Women holding modest-but-accurate self-opinions might be penalizing themselves, because confident men are taking initiative based on their bravado.

Those with low financial courage do things that cause their finances to be worse, such as avoid financial discussions to avoid embarrassment, decline investment opportunities for fear of losing money, and slip into a paralysis of inaction on their finances.  By contrast, people with high financial courage engage in the flip-side of these behaviours in an upward spiral.

Getting Women to Engage in Financial Wellbeing Resources

Imagine how those who lack courage will avoid thinking about it when there is an offer to attend a financial wellbeing class or advisory session.  That reduced awareness leads to reduced engagement in such programs.  Mercer suggests;

“Employers have the opportunity to help their female employees break the cycle of lower financial wellness by helping them build financial courage and become more confident in engaging in their finances. Simply offering women more in the way of financial education is unlikely to have the desired impact.” (Emphasis added)

Employers hoping to set up their employees to be well-and-productive need to prioritize financial courage with targeted programming for women.  So, who are the role models that women would look to while building this courage?

Women Are Building Wealth

Outside of the workplace, women are becoming more prominent investors.  An article in the Economist from March 2018 noted that global wealth held by women is trending from $24 to $72 trillion between 2010 and 2020, with their percentage of global wealth growing from 28% to 32%.  The growth is due to women participating more in the labour force, being better-paid, and benefitting more equally from inheritances.

Women behave differently when they invest.  The Economist cites a study that finds that

“…women outperformed men in the market by one percentage point a year.  The main reason, they argued, was that men were much more likely to be overconfident than women, and hence to carry out unprofitable trades.”

It’s not so much that women need to imitate men’s overconfidence, it’s that they need enough courage to take care of their wealth and then proceed with enough conscientiousness to make good decisions.  Courage and conscientiousness are not contradictory traits, and it’s possible to embody both.  Related to this phenomenon is that one of the first things women do when they get their hands on a bundle of money is to get rid of their money managers and start making investments by themselves.

And in the process they make different decisions about their own money.

Women Lead Socially Responsible Investing

Women are far more likely to be socially-responsible investors, with the Economist citing Morgan Stanley research noting that 84% of women (relative to 67% amongst men) are interested in social or environmental goals.  Funds specializing in responsible investing note that women tend to be the trailblazers.  And one of women’s criteria is to apply a gender lens.

Beyond the evidence that bias is bad for business, treating women fairly is increasingly seen as a sign that a company is diligent, responsible, and keeping apace of emerging trends.  A comparison to the environmental lens is helpful.  One investment fund

“…dropped Volkswagen because the carmaker scored poorly on corporate governance well before its value was hit by the revelation that it was cheating on emissions tests, [and] in future it hopes information about problems such as sexual harassment could help it spot firms with a ‘toxic’ management culture before a scandal hits the share price.”

Independent of whether “being good” is a core business goal, investors are watching for whether a company’s stock will tank because of regulatory failure, lawsuit, or customer disengagement following a public relations meltdown.  Investors, too, can be concerned about hygiene topics and women investors are ahead of the curve.

Yet we can still choose to be good, for the sake of being good.  Social change comes from all directions; from governments, social movements, and sometimes from investors.  But usually there’s that one person who has decided there’s something wrong in their life, and it’s time to take action.  That brave and conscientious person can be you.

Shift in Job Market Doesn’t Need to Be a Nightmare

Posted on by Stuart Murray

Melbourne Zombie Shuffle 162, by Fernando de Sousa
Melbourne Zombie Shuffle 162.  Photo courtesy of Fernando de Sousa.

Are you a little scared of the future? I think we all are. And for good reason.

There’s so much to think about these days, especially with technology disrupting our jobs. But if you have watched a few horror films, you’ll notice things become far less scary when you understand what’s really going on.  For me, my shoulders relaxed a little and I reached for popcorn again after I read a report from the World Economic Forum about job transitions.

The report reveals next-job opportunities for employees displaced by economic and technological disruption.

The U.S. labour market will see a structural job loss of 1.4 million jobs over the next 10 years, according to the Bureau of Labour Statistics. However, the report also cites a structural growth of 12.4 million new jobs.  On average the job market will be better.

However, let’s set aside the average for a moment and focus on the 1.4 million individuals who will be put out of work.

The report analyzed at a thousand job descriptions representing the majority of the American workforce and looked for similarities in skills, abilities, qualifications, and the work itself.  The job-matching methodology was created by Burning Glass Technologies, a firm specializing in labour market analytics harnessing big data and artificial intelligence.

Using the 10-year labour market forecast, they identified the job families where the largest number of jobs would disappear, identified other job families forecast for growth, and mapped-out how people could transition from lost jobs into new jobs.

Production and Office & Administration jobs are projected to be the hardest hit. In every other area there are fewer job losses expected, and the new-but-different jobs created within a job family greatly exceeds jobs lost.

Jobs in Production (which includes the beleaguered manufacturing sector) have a high similarity to emerging jobs in Construction and Extraction; Installation, Maintenance and Repair; and Transportation.  Positions in Office & Administration have a high similarity to emerging jobs in Business and Financial Operations.  And a large number of handy and hard-working people can always find a job in custodial or food services.

But if you lost your job, would you want to be a barista?

The Desirability of Job Transitions

Thankfully, the report considers whether peoples’ next jobs are desirable.  A significant drop in pay won’t motivate employees to seek reskilling.  Stability is also a top concern.  The investment in re-skilling or moving costs can be expensive, so some transition opportunities might be rejected just because of the instability.

Desirability isn’t all in the mind of the employee. Governments want a successful transition to achieve a good return on their investment in training programs. They don’t want to undermine their tax base with a low-wage workforce. And some governments are also concerned about the experience of workers as voters.  Employers need successful transitions too, as they fear of a workforce of demoralized, dissatisfied, and under-productive employees.

The report factored-in all these concerns and categorized viable job transitions as those that have high similarity, stable long-term prospects, and wages that are equal or better than the previous job.

They found plenty of opportunities:

 “…our analysis is able to find ‘good-fit’ job transitions for the vast majority of workers currently holding jobs experiencing technological disruption — 96%, or nearly 1.4 million individuals…  Interestingly, the majority of ‘good-fit’ job transition options — 70% — will require the job mover to shift into …a new job family.”

Job Transition Pathways

One of the benefits of this sophisticated model was that the authors of the report were able to extend the career transitions from a one-time change into “a full chain of job transition pathways” covering three jobs.

For example, a secretary can downshift into becoming a concierge, then come out ahead as a recycling coordinator. Each new job has a solid 90% similarity score relative to the prior job, but the salary bounces from $36k to $31k to $50k.

There is a similar trade-off for the transition from cashier to barista to food service manager.  So yes, you might still want to become a barista.  Employees could come out further ahead if they could see these pathways and plan accordingly.

Job Transitions are Different for Women

There are mixed results based on the sex of the worker.  On the minus side for women, it is estimated that 57% of the disruption will affect women.  Women also have fewer job transitions options: “Without reskilling… professions that are predominantly female and at risk of disruption have only 12 job transition options while at-risk male-dominated professions have 22 options.”

But women also have a better chance at job transitions that result in increased wages.  Of those experiencing labour disruption 74% of women have a good match into higher-paying jobs while the equivalent number for men in 53%.

This difference may contribute to a “potential convergence in women and men’s wages,” but this impact would obviously need to be blended with those economic forces that don’t favour women.  By which I mean, most economic forces.

Men and women alike significantly benefit from reskilling efforts, resulting in a quadrupling of the new job options available.  With reskilling, opportunities for women jump from 12 job options to 49, and opportunities for men jump from 22 options to 80.

A Change in Societal Mindset is Required

The report recommends societal changes in order to make this all viable:

“…what will be required is nothing less than a societal mindset shift for people to become creative, curious, agile lifelong learners, comfortable with continuous change.” (Links added)

On the public policy side, there is an additional shift in mindset for corporations and government:  pick up the tab or everyone is toast.

The main item that would empower this change is a comprehensive re-skilling program funded at full scale.  Displaced workers need to take some responsibility and show some initiative. But nobody in their right mind is suggesting that the cost of all this should be borne by anyone other than business and government.

While the consequences of inaction are dire for individuals and society, the path forward is becoming better understood.  It’s that part in the scary movie where they can see the way out.  And for that reason, it’s not so scary any more, and might even be fun to watch.