Talent attraction and the candidate of the future. Make yourself a better product.
The way you get a job is about to change. As jobs in the middle of the economy get replaced by machines, more and more talent will move to a new part of the value chain. This creates what economists call a labour glut. Lots and lots of people chasing increasingly flexible work.
The effect of this on recruitment and talent attraction is still under appreciated. The consequences will be systemic and structural. As Tyler Cowen says:
Overall, these job market trends are bringing higher pay for bosses, more focus on morale in the workplace, greater demands for conscientious and obedient workers, greater inequality at the top, big gains for the cognitive elite, a lot of freelancing in the services sector, and some tough scrambles for workers without a lot of skills.
And as Ryan Avent has pointed out, this applies to people in professional jobs just as much as in lower-skill occupations, if not more so. A couple of years ago the RSA estimated that 59% of the British gig economy was accounted for by 'professional, creative or administrative services.'
Goldman Sachs has automated half of all the processes involved in taking a new company to the stock market.
Small car insurance claims can be processed entirely by intelligent machines.
Radiologists are at risk of replacement by similar technology.
Lip reading technology is more accurate than the best human.
There’s a hotel in Japan staffed entirely by robots.
Software exists that is quicker, cheaper and far more accurate at reviewing contracts than junior lawyers. They just haven’t been replaced yet because wages have been affordable. The time will come when that calculation will change.
Project management software exists that not only hires and briefs the freelancers, but learns how they do their jobs so it can replace them later. And soon they’ll be sharing that information in the cloud and learning from each other.
Google seems to be developing a sophisticated machine that is built with a series of neural networks based on a human brain.
This is not entirely bad news. Jobs will evolve rather than die. Law firms are looking to hire people with broader, consultative business skills, for example. But the economy will change: the nature of work will change significantly.
The way we find and hire talent will change in two big ways. First, marketing will be more and more important, but less and less effective. Second, talent will work more flexibly and have looser relationships to businesses.
As people move down the value chain they will spend more time marketing to those who are still in high paying jobs. Tyler Cowen compares this to an expensive car driving through a poor city where everyone is offering to wash the windows.
In a world where advertising effectiveness is already facing big challenges, this is bad news.
Firms will also work differently. As the labour glut happens, people will work more like freelancers. US cable companies in America no longer directly employ the people who lay cable in the ground. They are contractors. The Uber model, with a strong central core built around a culture, and large loose networks of workers all over the place will start to replace the traditional firm.
People will be working in networks, rather than in firms. This is already happening. One large-scale survey by IBM found that 37% of people who apply for a job have a friend or family in the firm they apply to. Anthropologist Ilana Gershon wrote a book about how people find work in America. She said this:
When you want your resume to be noticed, it turns out that workplace ties — people who can speak to what you are like as a worker — help white-collar job seekers much more than weak ties do.
All of this means that the traditional model of attracting, recruiting, hiring and on-boarding, while still relevant, perhaps even the best option for some firms for some time to come, is on its way out. It will become too slow, too cumbersome. It will not relate to the flexibility of the new jobs market. Networks, flexibility and transparency are taking over.
As people become para-professionals they won’t want to spend four months in a slow-moving paperwork-heavy recruitment process.
Still hiring lawyers into prestigious long-term jobs with big salaries with expectations of dedication, long hours and a big payoff in fifteen years? Here’s a platform that is essentially Uber for lawyers.
Still desperate to get social right because unless you’re advertising to people through their social apps you’re falling behind? Here’s the latest social app which doesn’t do advertising.
So how do you find the right people in this new world?
As Seth Godin has been saying for years, marketing today isn’t about advertising, it’s about a great product made available to people who trust you.
I used to think that meant we should move to a network based hiring system, but now I'm not so sure. There's evidence that this can be inefficient.
Because of the existence of a network, entrepreneurs set inefficiently low wages, firms are weakly too small, rely too much on networks for hiring, and resulting welfare losses increase in the quality of the network. Further, if entrepreneurs are uncertain about the true quality of the external labor market, the economy may become stuck in an information poverty trap where forward-looking entrepreneurs or even entrepreneurs in a market with social learning never learn the correct distribution of stranger ability, exacerbating welfare losses.
As a firm, you'll need to find ways of leveraging your network without it encouraging you to become too low-risk. According to Deloitte, ‘42 percent of executives expect to increase or significantly increase the use of contingent workers in the next three to five years – 71 percent believe their company is “somewhat” or “very” able to manage contingent workers.’
As this intensifies you will need a brand that maintains those connections, and works with people in talent orbits. Mobile talent needs to be kept close and engaged, but without it becoming a members' club where no-one else can get in.
There's still a lot of recruitment practice based around artificial barriers to entry - minimum years' experience, having to have done the same job in a similar environment - that are better at making the CV screen easy rather than a system that allows you to pan for gold.
There are high levels of overqualified migrant workers in the UK. 20% of women are not participating in the labour market at all right now. What use is the traditional job description and CV sift when trying to attract these people?
They have the skills and experience you need. More importantly, many of them will fit the profiles discussed below. Smart, flexible, generalists who can adapt well to modern working environments.
But the system needs to change to let them in.
As a candidate, you need to work to make yourself irresistible. The trend this century has been in favour of the talent, but I'm not so sure that's true anymore. Competition is fierce for jobs and the requirements are going to change as we come out of the next disruption. Some recent (speculative) evidence suggests that ‘one in ten LinkedIn profiles is a lie'. That's not the approach I'd take, but it shows you just how seriously some people are taking the new challenge.
Applying Seth Godin's advice to you, not your employer, means you should focus on unique skills. Make yourself a better product.
That might mean playing the long game. A recent study, reported in the New York Times found that humanities degrees might serve you better long-term even though STEM degrees pay off more in the first half of a career.
The advantage for STEM (science, technology, engineering and mathematics) majors fades steadily after their first jobs, and by age 40 the earnings of people who majored in fields like social science or history have caught up.
This happens for two reasons. First, many of the latest technical skills that are in high demand today become obsolete when technology progresses. Older workers must learn these new skills on the fly, while younger workers may have learned them in school. Skill obsolescence and increased competition from younger graduates work together to lower the earnings advantage for STEM degree-holders as they age.
Second, although liberal arts majors start slow, they gradually catch up to their peers in STEM fields. This is by design. A liberal arts education fosters valuable “soft skills” like problem-solving, critical thinking and adaptability. Such skills are hard to quantify, and they don’t create clean pathways to high-paying first jobs. But they have long-run value in a wide variety of careers.
This isn't news, but as the labour market changes it may become more and more relevant. We lost the idea of a job for life a generation ago. Now we need to lose the idea of a skill-set for life.
That means a change of mindset about talent more generally.
As uncertainty begins to define workplaces more and more, a premium is emerging for people with fluid intelligence: problem solving flexibility rather than concrete knowledge and precise skills.
In uncertain environments, ‘specialization is no longer the coin of the realm.’ Doing your 10,000 hours – so often the way we assess and attract candidates in based on the exact types and amounts of experience they have had – is only useful in some fields.
A 2014 meta-study found, ‘deliberate practice explained 26% of the variance in performance for games, 21% for music, 18% for sports, 4% for education, and less than 1% for professions.’
Generalising about talent from your favourite sports team might not be so useful.
Expertise can also create false confidence. A Yale study shows that people with expertise are often surprised when faced with comprehensive explanations that show the limitations in their understanding. ‘While expertise can sometimes lead to accurate self‐knowledge, it can also create illusions of competence.’
Some of the workplace examples they give of this phenomenon are sobering:
· trained nurses overestimate their ability to perform basic life support skills
· general practitioners do not correctly assess their own medical knowledge
Then there’s the well-known Dunning-Kruger effect, which says that, ‘Those who are the least competent in a domain are typically also those who are the least aware of their incompetence.’
The worse you are at something, the worse you are at knowing it.
There’s a tension here. If under-competent people are bad at knowing they are under-competent, why does more expertise also lead to overconfidence?
The explanation is that while formally educated people are better at realising they do not have a generally good understanding of things outside their area of expertise, they often overestimate their knowledge of their own subject.
If you are a specialist in something, you tend to assume you are top-drawer, even if you’re only middle-ranking.
There's a good chance that this period of disruption, and the disordering of traditional corporate talent structures will be beneficial for creative thinking.
We need to get comfortable with mess. What we’ve seen so far is that the division of labour into specialist skills is no longer the only way to successfully manage talent. That we overrate experience and education in some areas. That intelligence is important, but not a great way to measure people. In short, that our ideas of meritocracy and talent are not wrong, but becoming less relevant in a world of fast change, complex challenges and fresh regular problems.
The traditional approach was to find highly conscientious, well-educated people. We now need to see the value in people who are able to assimilate new ideas, and change tack at short notice.
We therefore need to find people who are comfortable with mess. This will be how we come up with ways of thriving in the new era of uncertainty. As Kathleen Vhors, the psychologist, said:
‘Disorderly environments seem to inspire breaking free of tradition, which can produce fresh insights. Orderly environments, in contrast, encourage convention and playing it safe.’
Ideas – one of the three main economic shortages identified by Tyler Cowen – come from everywhere. The world is a big old mess of ideas, not a spreadsheet.
Ideas come from people showing up and getting to work. Not from inspiration.
Brainstorming works better when it’s done by individuals rather than groups, but not when it’s done at a tidy desk.
This means ceding control to employees. Something companies are explicitly designed not to do, but which they will have to do as the nature of talent relationships change. And something which all those existing managers, hired and promoted on the basis of their neatness and specialist knowledge, may need to learn how to become comfortable with.
This makes intuitive sense. Things that are messy include the internet, the lives of poets and artists and child-rearing. No-one seriously thinks that those things would be improved by becoming neat and orderly.
We want the organic, emergent creativity those forms of mess produce, even though a certain amount of structure can enhance them.
Once you have found those people who are well-suited to working for you in a disorderly, flexible world – whatever their education and experience – it makes sense to allow them the freedom and space to concentrate and get on with solving those problems.
Just like education can’t make most of us into geniuses, and 10,000 hours of training can’t turn us all into chess champions, we can’t actually seriously impose orderly, conscientious systems onto messy, creatively minded people. Not without stifling them, anyway.
As Jerry Useem says, ‘High in fluid intelligence, low in experience, not terribly conscientious, open to potential distraction—this is not the classic profile of a winning job candidate. But what if it is the profile of the winning job candidate of the future?’
The best news here is for those people who feel suffocated in their jobs, the ones who are well suited to their work but not to their corporate structures.
David Perell worries that talent in traditional companies is under-utilised:
Too many of our smartest minds are working on trivial tasks and spending their time in corporations where they feel invisible. The vast majority of my friends who work for big companies say they're bored, unchallenged, and under-employed. They don't see the tangible benefits of their hard work.
I think that might start to change as the changes I anticipate come online. A bigger part of the future belongs to the messy, the distractable, the non-mathematical.