Honey, I Shrank the Unemployed

Posted on by Stuart Murray
Shrink Tricks. By Arne Endriks (Edited)
Shrink Tricks. Photo courtesy of Arne Endriks.

What if we just pretended that society’s problems had already disappeared?  It sounds dicey, but that’s often how things are done.  People who are struggling with unemployment are having a hard time explaining their lives.  And if you’re sitting in a job in human resources, you know that you have to understand this crowd.  Whether you’re administering layoffs and terminations, sorting through a long list of unqualified job applicants, or talking to friends and family who have a little problem at work, you know that the bewildered masses are your people.  But thankfully, you can make their problems disappear through government statistics.

An article from June 1, 2017 in the Huffington Post notes that the share of Canadians with a job has hit  a record high.  The content can be dense and confusing, but at issue is that people wrongly think the unemployment rate is a meaningful indicator of how well the economy is doing.  For labour economists, unemployment rates border on being a garbage statistic.

The unemployment rate is the number of people who have jobs divided by the number of people in the labour force.  But people have all kinds of reasons for not being in the labour force.  These include: discouragement from a long unemployment spell, disability, the decision to stay at home with kids, retirement, financial independence, postsecondary studies, prison, and travel.  Governments can also reduce unemployment by deciding that certain people aren’t trying hard enough to get a job and, therefore, they aren’t really in the labour market.  There’s a lot going on that has nothing to do with economic statistics.  Since the labour force is half of the equation, the unemployment rate itself is of debatable value.  You can still use it occasionally (i.e. for month-over-month comparisons), but only with caution.

A far better statistic is the employment-to-population (EP) ratio.  We know who has a job, and we know how large the population is.  Take these totals, divide one by the other, and suddenly the data is clean and interesting.

The Huffington Post article notes that the EP ratio in Canada is now 78.6 percent, its highest level since Statistics Canada first started measuring this in 1976.  That’s good for Canada.

It’s also interesting to look at the second diagram in the article, which describes the labour force participation rate.  The labour force participation rate takes those two denominators we described earlier and combines them.  It is the number of people who are in the labour market divided by the population (within the relevant age group).  The labour force participation rate disregards whether the person actually has a job; it’s an indicator of how involved people are in the world of work.

Canada has a high participation rate relative to the US.  Amongst the working-age population, over 77 percent of Canadians work or are looking for work.  Labour force participation rates in the US used to be 77 percent, back in the late 1990s.  In the twenty years since, participation has slipped 5% to 72 percent.  The decline happened during three different presidents, and only half of the decline was during that nasty recession that started in 2008.

Long story short, the US has an unemployment rate of 4.1%, but they have an extra 5% of the population that could work but doesn’t.  It’s the tale of two economies, two Americas.  There is one America where things are bright and sunny, people aspire to career growth, and they talk about red wine and heirloom tomatoes.  But in the other America, things are not so great.  Theirs is a world where people lost their jobs to globalization or technology, lost their homes to the mortgage fiasco, and are now losing family members to the opioid crisis.  This is a crowd for whom voting for Donald Trump is totally rational.

Yes, we can pretend that society’s problems don’t affect us, and that those who don’t fit into the new economy are not our concern.  But those who don’t fit in get to speak their mind, and it’s not in a way that some find pleasant.

Service With a Smile

Posted on by Stuart Murray
GS Cashier. By Derek A.
GS Cashier. Photo courtesy of Derek A.

What’s with all this bold talk from millennials?  Don’t they know to keep hush about their outlandish opinions?  In a recent article from Lisa Earle McLeod the author submits an open letter (closer to a manifesto) that explains why millennials have the opinions they have.

She has two key points.  First, employers are tolerating poor performers, and those poor performers drag everyone else down, including highly-motivated millennials.  It’s not so much that millennials are unreasonably ambitious and over-eager, it is that their enthusiasm is the correct attitude and lower-functioning colleagues should not be setting the pace.  Fair ball.

Secondly, we must give our work purpose.  Organizations that have “a purpose bigger than money” have better business results.  This purpose-driven organization is reminiscent of Simon Sinek’s Power of Why although McLeod’s critique is closer to a sense of Noble Purpose amongst the sales team, a major concern of hers.

This focus on enthusiastic front-line staff is consistent with other critiques.  Josh Bersin notes that many organizations are flipping their hierarchy to place priority on engaged employees first, who then attract and retain customers who, in turn, keep the profits alive.  If it works, go for it.

It’s About Policing Numbers, Not Number of Police

Posted on by Stuart Murray
The Police, by Luca Venturi
The Police.  Courtesy of Luca Venturi.

Can big data reduce crime?  Yes it can.  This is a great TED Talk by Anne Milgram about using analytics to improve the criminal justice system.  The talk from October 2013 describes how Milgram successfully attempted to “moneyball” policing and the work of judges in her role as attorney general of New Jersey.  Hers is a great story, and has many features in common with the Moneyball book and movie.

The speaker describes how she built a team, created raw data, analyzed it, and produced simple and meaningful tools.  Her most impressive outcome is a risk assessment tool that helps judges identify the likelihood a defendant will re-offend, not show up in court, or commit a violent act.  She and her team have successfully reduced crime.

Baseball players and police officers alike have a culture of bravado and confidence which may be critical when handling conflict, intimidation, and credibility.  Yet what police officers and baseball players often need is a safe space to question their assumptions, assess whether they could do better, and decide that they will do better.  These types of vulnerable moments don’t play out well when a player is at bat, or when an officer is handling complaints from the perpetrators.

In Milgram’s talk, where others see cool math tricks, I see a change in mindset and demeanor.  The speaker expresses curiosity about the information, enthusiasm for unexpected findings, modesty about baseline effectiveness, a lack of blame, and a can-do attitude about trying to do more and do better.

It’s a great metaphor for business.  In those workplaces where managers fiercely claw their way to the top, there may be a reduced willingness to talk about shortcomings in a manner that requires trust and collaboration.  Yet making exceptional decisions require that leaders choose an entirely different mood and posture while they explore an uncharted area, allow information to out-rank instinct, and aspire to a more subtle kind of greatness.  Put posture aside, and just do good work.  The way things are changing, those are the only kinds of people who will stay on top.

I Like Your Style, You’re Just Like Me

Posted on by Stuart Murray
Apostrophe Absent. By Michael Derr
Apostrophe Absent. Photo courtesy of Michael Derr.

Are you compatible with your organizational culture?  I sure hope not.  You need the freedom to break from the pack in order to pass along new information and adapt to disruptive change.

In the 2011 book Connected by Nicholas Christakis and James Fowler, the authors describe the way opinions and behaviors spread through social networks.  They describe a Three Degrees of Influence rule: we influence and are influenced by people three degrees removed from us, most of whom we do not even know.

You might know one hundred people, but those people may know another one hundred people (each), and so on.  This could result in a million people crowd-sourcing shared opinions.  You would pick up many opinions from this extended network.  The reverse is true as well.  You could spontaneously assert that we should have all better table manners, and a million people might change their behaviors.  Or maybe they’ll just talk about having better manners.

The implication is that you do not entirely experience independent thought.  You might control what time you arrive at work, what garments to wear to the office, and how you respond emotionally to what  your manager just said.  But the allocation of housework in your household, the social norms in appropriate dress, and the organizational culture of two-way conversation could all be things that have significant third-party influence.  You’re not exactly an autonomous hero in the workplace; you are a team-player in an environment where culture runs deep.

This critique has been revisited in a recent book review in which Yuval Harari summarizes The Knowledge Illusion by Steven Sloman and Philip Fernbach.  Sloman and Ferbach posit that individual thinking is a myth, and that we actually think in groups.  With modern civilization we have come to rely increasingly on the expertise of others.  This crowd-think has mostly been good for us, but it also has a downside.  People “…lock themselves inside an echo chamber of like-minded friends and self-confirming newsfeeds, where their beliefs are constantly reinforced and seldom challenged.”

Group loyalty and pride in our presumed intelligence causes us to stick to the normal way of doing things.  This is a challenge to those of us who produce or consume new information.  New information and new ideas disrupt stable group environments.  If we are trying to change the workplace so that things are done differently, we must exchange discomforting opinions.  We must propose ideas that will be rejected.  We must try things out that won’t work.

You Can “Say” Team, But Do You Feel It?

Posted on by Stuart Murray
Soccer Practice. Courtesy of woodleywonderworks.
Soccer Practice. Photo courtesy of woodleywonderworks.

Does life get in the way of your workplace productivity?  Typically, it’s the opposite.  Your personal life determines how you show up.  When colleagues talk about life, and make their work meaningful to their lives, that’s when they become a team.

This is a great story from a colleague of mine from graduate school.  Alyssa Burkus describes the time she was working on a project for an organization (Actionable.co), and started seriously to consider an offer to work for them full-time.  During a team check-in about people’s weekend she announced to team members that she had achieved a milestone anniversary in surviving cancer.  There was an outpouring of sympathy and support.  She felt it.  She had found her tribe.

If you listen closely in your own workplace, you might hear other moments like these.  Some moments are better than others.  When people “have a specialist appointment” how much time do we give them?  When people have a death in the family, do they tell us, and do we have their back?  When two people talk about their kids having learning disabilities, how long are they allowed to talk?  At my current employer I had to delay my start date because there was a minor complication with a scheduled surgery.

The reason these scenarios are powerful is that many personal topics are simply more important than work.  As an employer you don’t so much own people, you just borrow some of their time.  When employees develop a sense of self-respect and a pride in their contributions, they willingly rise above what is expected from them in the job description.  I love going above and beyond for people whom I respect, and who have respect for me.  This feeling is stronger when employees forget about their salary, which is the dream of every well-informed compensation team.

The ability to have these conversations is part of a healthy workplace culture.  It turns up in employee surveys as a determinant of workplace engagement.  It drives turnover statistics and the amount of steam people put into discretionary effort.  Missteps in these areas are often at the root of conflict, harassment, and grievances.  When an employee expresses physical or emotional discomfort, the degree to which others care and take action is a major factor in accident claims, absenteeism, and long-term disability costs.  With equity and inclusion the emerging practice is to bypass categories and go deeper into individual perspectives.  With employee communications, people mostly read the personal stories.  And the best source of information for leadership development in the eyes of the employees who are following your lead.

I do a lot of math about workforce analytics and I can confirm for you that according to my calculator, emotions are the boss.

I think the reason vulnerability and compassion are so powerful is that it’s really hard to fake it.  You can tell when people mean it, and you can tell when people don’t.  As Alyssa puts it, “…this isn’t a call-to-action to start creating ‘meaningful moments’ initiatives, where the word from the top is leaders need to be more personal, or where HR tracks ‘connection point KPIs.’” It’s about authenticity.  Perhaps we need to develop metrics to guage that.

Foreign Investment Takes a Shine to the Rust Belt

Posted on by Stuart Murray
cement factory. by Miroslave Vajdic.
Cement Factory. Photo courtesy of Miroslav Vajdic.

What if every critique you could make about the modern workforce was briefly disproven?  I happened upon one shining example in a recent article in the New York Times.

It’s opposite land in Moraine, Ohio.  A Chinese glassmaker named Fuyao put a half-billion dollars into an abandoned General Motors plant and created over 1,500 jobs producing windshields for the North American auto sector.  The investment narrowed the physical distance between the investor and clients, which presumably lightened the load on the environment.  The plant has been unionized by the United Auto Workers who would normally think of this as their turf.  Health and safety conditions fall squarely under US law.  There are more visible minorities in executive positions.

Some people have a problem with all of this.  White male executives lost jobs to make space for Chinese managers who were brought in, triggering at least one lawsuit.  The drive to unionize was successful but really difficult.  There is a debate about how hard the employees should work.  The investor is operating just one inch inside the law on health and safety, spurred into action by a hefty fine.  (Who knew that kind of thing worked?)  On Weibo, a popular microblogging site in China, someone called out the owner as a traitor for out-sourcing jobs to the US.

I can barely think of what to say.  It’s just one of those things you hope would happen, until you realize you are suddenly deprived of any legitimate reason to complain or criticize. Maybe we should decide we don’t have to chase reassuring opinions, and get comfortable with contradiction?