How the Pandemic Changed Talent Management (Back to Work, Better)

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Welcome to the hbr ideacast from harvard business review. I'm alison beard. Over the past few months, we've been looking at all the ways that work has changed due to the global pandemic and what more could or should change going forward. It's a series we're calling Back to Work Better Now. Leaders are balancing short term crisis response with mid and long term business decisions, while individuals are reconsidering what they want out of their careers. This could be a big turning point for organizations and their employees. One person who's been thinking a lot about these changes and what post Covid workplaces and good management will look like is Johnny C. Taylor Jr. He's the CEO and president of the Society for Human Resource Management, a job he took after serving in corporate roles for many years. He's looked at research from the past several decades to identify not only trends but also best practices for the future. And he's the author of the book A Leader's Guide to Work in an Age of Upheaval. Johnny, thanks so much for being on the show.

Well, thank you for having me.

So I want to start with your.

Perspective on our current moment.

Why is this a good time to.

Reinvent how we work?

Well, it's been a long time globally since we really thought about work, workers and the workplace. Over the last several decades, various countries have taken different approaches to incrementally improving and redefining those three areas. What is work? Who does that work? In other words, who are workers, employees, contractors, et cetera. And then what's the workplace? Fortunately for us, and I use the term fortunately intentionally, there was a pandemic. And the pandemic forced us all talent, people and employers, to stop, pause, reflect and ask themselves, did it have to be done that way? The entire construct that we have used to get work done has been challenged. And during this period of COVID clarity, as it's been termed, we've had the opportunity to step and really question how will we operate differently? And I often say this is not a pause, it's a reset.

Yeah. Are there times in the past that.

Sort of big crises have led to positive changes in the workplace?

Not significantly. You know, that's the funny thing, the workplace and just the concept of work globally, we incrementally made changes around the globe. We have introduced, for example, leave in some parts of the world, some unpaid, some paid. We've introduced the idea of continuous learning and a shift from seeing investments in their employees, learning and development. Development as an investment versus an expense and a cost. We've made these changes some legislatively, some practice wise, just some. But we just haven't had the entire globe stop pre pandemic. If you had asked nearly anyone, any major company, whether they were in Europe, in Asia and the us if you had asked them, could we shut the workplace down overnight and continue to operate, the answer would have been a resounding no. They would have all said no. We've got to hire all sorts of consultants and it'll take two years to figure it out. And then we've got to develop a communication plan. And I mean everything. And guess what? We were just forced into doing it, period.

It's so funny to think back now, right?

And we all thought, if you remember, we all thought it'd be 21 days, right?

And it does seem like this crisis has prompted people not only to rethink how they work and their career paths, but also really act on those thoughts. In the US we seem to be experiencing this great resignation. So what should employers be doing about that?

This is complicated, right? We as employers have got to really, really think about what are we going to do to entice people to be attractive to people from a career perspective. I know, for example, me, pre Covid, I travel 70% of the time, right, for my job. Then I have this moment. And when people refer to the COVID clarity, even for me, CEO of a significant organization, like, I had that moment where it's like, wow, do I need to come and come to the office every day, Monday through Friday, 9 to 5?

The answer is no. No one does, right?

Right.

No. Unless you're an essential worker in a hospital or pilot.

Yeah. So all of this started happening. You've seen some employers say everyone can work remotely, work from where you are. Others have said, let's go three days a week, four days a week. It's all over the place because we're engaged in something we've never, ever had to do in our history, right? We're experimenting on what the workplace of the future will be. Our employees are also right now making decisions about how they want to show up to work and what does it even mean to show up to work. And so I love this moment. The social contract is being renegotiated right before our eyes.

When leaders come to you just totally overwhelmed about making the right decisions for their organizations now and going forward Giving all the changing dynamics at play, what advice do you give them?

Their default space, where they have to start is a culture discussion, because they'll call me Johnny. Should we mandate vaccines? Should we mandate people coming to work a certain number of days? What's the right number? They ask all sorts of questions. And I said, stop. You're jumping right now into the activity. Let's step back and ask yourself, you, Mr. Or Mrs. CEO, along with your executive team, who do you want to be? What kind of employees do you want to attract and retain? What's your employer brand? What is it now? And more importantly, what do you aspire for it to be? When you make those sorts of decisions, the policies and practices that you adopt will naturally flow. I also tell them, and this is important for the listeners, I don't believe there are good cultures and bad cultures. Now, let me be clear, say for illegal, immoral, unethical cultures, take those off the table. Right? But I'm saying other than that, what works for Jack Dorsey at Square and Twitter may not work for, you know, Jenny Rometty when she was the CEO of IBM, and it sure as heck may not work for, you know, name the person each organization has to start with, who do we want to be, and then make decisions about what your policies and practices will be.

Yeah, and things like remote work and flexibility that everyone's talking about. You know, those look very different for a financial services firm or a tech company than they do for a hospital.

But even within a sector, you saw, for example, United Airlines announced that they will mandate vaccination. Delta and Americans said not so, because culturally they have different things that they value. I could imagine they're saying our culture is one of letting people make their own decisions. Safety is important, but we will do all that we can to allow the individual to make their decisions about how they work. And when it comes to what they inject in their body, that's their call. Now they gotta make sure our customers are safe and our other employees are safe. But that's their call. United, on the other hand, I might imagine, is saying, yeah, we constantly preach safety, first, safety, safety, safety, and we're going to remove the workplace of all known hazards. Even within the airline industry, there are different cultural norms and different approaches to providing the type of workplace that they want. And that's my point. It's not all of us want to look for the shortcut. What are the companies that are the best companies to work for? What are the best great places to work? What are they doing? Or what is the leader in our industry. What is Silicon Valley doing? What we each have to do as leaders is really be honest, engage in introspection, and say, who are we? What do we want to be? What kind of people do we want to attract? There are people, for example, who literally want to come to work every day. I have some colleagues here who say, listen, I think I'm better off in the workplace. I don't have the discipline to do it, et cetera. You may decide, I want to hire 5,000 people like that. That doesn't make you a bad employer. It doesn't mean your culture is wrong. It means it's not right for people who don't value that and who don't want to work that way.

So it sounds like you foresee a lot of movement workers changing to companies that fit their culture.

Yeah. Think about it. You spend eight to ten hours a day of the time that you're awake. I mean, you spend a lot of your life at work. So I tell employees, you have a right to find the place where you will work and feel most fulfilled.

And as all of these employees are demanding higher pay, more flexibility, the opportunity to work remotely, more paid leave, paternity benefits, et cetera, how should leaders and managers think about balancing the sort of financial demands of keeping the business strong and profitable and growing against those sort of humid needs that might not lead to as productive a workforce? Or is the argument that actually they'll be much more productive if you give them all those benefits?

There are arguments on both sides. I know this is going to sound like the lawyer in me is going to be able to argue both sides of it. Right?

That's right. I forgot you went to law school, too.

So it's interesting. Ultimately, I cannot guarantee you a job if the organization is not financially thriving, period. And so there's this risk that we run in giving employees everything they want, and then you end up not having a profitable business. So no one has a job. Early in my career, I was a labor and employment lawyer. And one of the things I would say when I'd go into contract negotiations with unions is, be careful what you're negotiating for, because if I give you all of this, they're going to be fewer of you, point blank. Because I have to make money. My client is in the business to make money. Like, that's the deal. Employees are in many most organizations, your employee line is the largest expense item in your budget. And it's fair for an employer to say, I can't do it all. I can't give you everything. Employees, on the other hand, I get it. I get it, what we're saying to employees. And I'm as an employee myself, I have bad days, even as a CEO. Right. We all have bosses. I have a board. But you have to say, on balance, do I have significantly more better days than bad days? And if you do, then you have to take the totality of this work experience.

What do you make of the push for unionization for things like warehouse workers at Amazon? Is that a trend you see continuing?

Yes.

And do you think they'll begin to succeed?

Well, so it will be interesting to watch. Largely, employers think you don't need a third person to get between me and my employee and you, Mr. Or Ms. Employee. You don't need to pay someone to ask us for fair treatment, equitable pay, et cetera. The union numbers had been going down for decades now. Right. Part of it is employers have said, as opposed to waiting until I have a third party demand things of me, let me get in front of this. As opposed to waiting until the federal government passes policy or laws that I must comply with, let me do it. So paid leave is a classic example. The law doesn't mandate it in the U.S. right. There's some states that are and localities that are pushing it, but largely it's unpaid. Why don't I get in the front of that and offer it? Because it's just good business. It's smart human resources, and so I'm going to do it. The more employers do that, the more you're far more likely to see the union numbers either stagnate or fall. Because why would I? Why do I need someone to represent me if my employer is otherwise going to treat me equitably?

And the US Is really its own special case with regard to the relationship between employer and employee. Do you think of America as sort of a place that people look to for workplace best practices, or a place that increasingly, Europeans, for example, look to and say, wow, they're really getting it wrong.

Fortunately, SHRM being global, we have members in 165 countries. So we do get a very interesting perspective from across the globe. Listen, the entire world, especially the capitalist world, models America. There are things we do well, and there are things that we could do better. When it comes to workplace policy, I think there is room for improvement. We are looking. When you think about apprenticeships, for example, we look to the rest of the world because we've not embraced that. When we think about social mobility in particular, we've not done that particularly well, on balance, I think people would still say the US model is still the model. And as imperfect as it is, what I'm now pleased to see is America is now starting to look to the rest of the world and learn, take some best practices from around the globe.

And were you suggesting that on certain policies there might need to be a government nudge in the form of updated legislation?

No question. Paid leave is top of the list to me. The traditional 40 hour work week and the way that we define overtime, we could absolutely learn from the rest of the world. There are a lot of things that we need to revisit.

Let's drill down a bit into the HR function, talent management and how that's changed. You talk in the book a lot about innovation and the fact that talent managers need to be not just hiring innovative people to play all the other roles at the company, but they need to be innovative themselves.

So, three areas. One is how we even recruit people. The talent game of times past, at least over the last two decades or so, has been very much focused on technical competency and skills. I want the most qualified person. Well, what we know is that we no longer necessarily need to use the degree as a proxy for smart. We did that for decades. Innovation in the talent acquisition space requires that we think very differently. We're now looking at stackable credentials. We're talking about lifelong learning. We're talking about a very different profile for what a successful candidate would look like. We've recently been doing some research here at SHRM and we talk about what does successful talent look like today? What are the characteristics? Top of the list is not top of your class. It's creativity, adaptability, the ability to work with others in teams and collaborate. These are now the things that are far more important. And so we've got to innovate. How do you measure that? How do you assess for those newly highly valued characteristics of talent? Now let's leave the talent acquisition space and let's talk about what do you do once they are your employees, how do you keep them? And one of the areas that we're going to have to get very, very innovative about is compensation rewards. We have largely said there's base salary and there's some sort of a bonus and the 401k in the US and now we're saying we've got to be far more innovative and creative. We've got to figure out how to motivate people, how to reward people in ways that aren't linear necessarily, and stop focusing on equality and focus more on equity, you know, on a football team, the quarterback makes a lot more money than the lineman. We are willing to assess the marquee player very differently than the person who's a backup. We just are willing to pay differently. And our model, the way that we've approached compensation and rewards has been very much based in equality, with a little bit of a pop for people who stand out, but not enough to differentiate them.

And would that be fully transparent? You know, like, would I know that the person next to me was making double my salary?

Well, so that was gonna be my third point. Just focus on transparency. If you want true transparency, glad to give it to you. The question is, can you handle it? And I think it's absolutely good for all. But we also are gonna have to deal with employees who say they want transparency, but in reality are going to struggle with it.

And you also, as the employer, have to be able to justify disparities in pay.

It happens all day in sports. We do it and we're glad to do it.

And as long as they're clearly defined metrics and we take all the bias out of the system, et cetera, et cetera, it could work in theory.

Well, let's talk about it. I am of the belief that you can't take all of the bias out of any system. We can go a long way toward eliminating some of it, most of it. But by definition, performance is subjective. We need to be honest with people. There will be. Human beings make assessments that are subjective. We know from interviewing, for example, like we, in the first five minutes, many of us decide if we like someone or we don't. Now, we're going to do our best as human resources and talented management professionals to try to make sure that that's not on account of their ra, their gender, their age and all those sorts of things. But the reality is whether I like someone matters in the interview process if I'm the hiring manager. And we have to be honest with people and tell them, yeah, and that's the H in human, right, the human resources. That's that H. And human beings do operate in such a way, are we going to try and as I said, reduce significantly bias? Yes, but we have to acknowledge that there will always be bias in hiring processes. Even now with the so called AI and machine learning and everything. There's bias built into that. Yeah, there's no perfect approach, but it's better than what we've seen over the last 20, 30, 40 years. So where is this a process, an evolutionary process.

And if it's transparent and you see a pattern of bias, then you can tackle it.

That's right.

So let's also talk about the big push toward diversity, equity and inclusion that so many companies are making now, especially after the racial reckoning that we've had in the US over the past couple of years. How do organizations do a better job, especially when the market for these types of employees is so extremely tight?

Yeah, you've nailed it. And let me just add, not only is the current market tight, but given that we've largely shut down traditional education in the K12 space for the last two years, especially in the public school system, which are largely black and brown children, these children have fallen behind. And so while we think there is a very tight market for talent in the black and brown communities, let me tell you what it's going to look like 10 years from now when that 8th grader who missed those critical 8th, 9th, and perhaps 10th grade years, or suboptimal remote education in many instances, is not able to compete in the future. This is a real problem for us. And we in hr, we are trying to influence policymakers to say we've got to do something to ensure that these people, large populations of our community, get up to speed on education or we're going to have a problem. Like we already have a skills gap. It's really being exacerbated as a result of the pandemic. So fast forward to the employer. We are all committed, and I am so pleased at the end of the day about what we experienced over the last two years, racial reckoning. And prior to that, when we were all focused on MeToo in 2017 and 18, we were looking at gender and we've made real progress. And then the pandemic happens, and much of the progress that we've seen on gender and race and national origin and ethnicity has gone out the window. Did you know, pre pandemic, for the first time, women made up a majority of the American workforce. And now in literally in two or three months, by April, 2 million women had left the US workforce. All of that progress at this very moment, when everyone's talking about inclusion, equity and diversity, there are bigger macro pressures that are undoing a lot of the work and achievements that we made. That is the thing that keeps many of us up at night, partially, partially because we are better than this. And this is not just a us thing. Globally, we are better than this. And it scares me and employers all over because they want to do the right thing. But ultimately they need to hire people who can do their work on the employer side. We have got to reach out outside of just the four walls of our organizations and reach into the communities where children have been negatively impacted because they are your future workers. And we have to offer apprenticeships, vocational type experiences, even shadowing so that these children don't give up. We have a real problem, a very low labor participation rate in our country and we can't afford for it to go lower. So employers are going to have to be very thoughtful about their labor planning. And so it's not a 12 month or 24 month. They're going to have to be long term and strategic in their approach, reaching into Our K through 12 system, working closely with our higher educational institutions, community colleges, four year universities and the like. And we also are going to have to then, you know, to work really hard in thinking differently about what talent looks like and how we're going to groom that talent because it's in our best interest.

Yeah, and you mentioned nationality, country of origin. You know, this sort of stoppage of international travel surely has blown up so many global corporations. Talent development plans, right?

That's right. No, right. Now one of the things that we hadn't thought about though and is when we talk globally is one of the beauties of this acceptance of and hopefully embracing of remote work is you're not just limited to the talent within a 50 mile radius of your office. The fact of the matter is we actually can solve for some of our talent needs. Not just recruiting in the US or recruiting in Europe or, you know, we can get our talent wherever it is. And so funny, I was talking with a group of our employees recently about that and they were talking about the advantages. This one particular employee said to me, you know, I need to be able to work remotely. The fact of the matter is I can do my job from anywhere. Da da da da da. And I said, I do hope you understand the reverse of that. Or better said, I hope you understand what that means. From our perspective, that means I can also get your talent anywhere. And that means I can get your talent elsewhere on the globe for a lot less expensively, just in time, on demand. I don't need to have a full time person doing this. We've seen the gig worker community explode. And so I said, be careful, right? The more you remind me that you don't need to come into the office, that there's no value in interacting with your colleagues and building esprit de corps and collaborating and innovating if your job is truly that of an independent contractor or an independent contributor who can work anywhere in the world, then maybe I should hire anywhere in the world.

Right, right.

It's just that that's threatening. I said, oh, remember you wanted transparency.

Right, right. Well, so as sort of, we perhaps move into sort of more gig contractor led workforce. You know, how should companies begin to think about HR and how that function changes if you're managing sort of this dispersed remote pool of contractors versus a group of employees that are coming to the headquarters every day?

So one term that we use a lot now is your combined workforce could include long term contracted people. They can include someone else's employees who are providing a particular service for you. I think About Microsoft, about 40% of their workforce are not on their payroll. They have 120,000 employees. 50,000 or more could not even be their employees in a traditional sense. All of us, employees and employers alike are going to have to revisit this idea that the work of the future may be done by different types of categories of people. Traditional employees, contracted employees. In the past we talked about labor planning. A new term that we are toying with here at SHRM is work planning. Because the real issue is not planning of the labor. The hiring manager wants to know, how is my work going to be done? They don't really care if a machine does it, they don't care if a contractor does it. They don't care, you know, just an employee. They just want their work done.

So like if I'm going to execute on this project, I need one manager, two in house employees, two robots and four contractors.

Precisely.

Okay, let me wrap up by asking if I'm a senior leader, CEO, hr, even a mid level manager, what should I do when I wake up tomorrow to build my organization and workplace back better than it was before the pandemic?

You talked about this earlier. The idea of you've got to really put to bed everything that you thought you knew before March of 2020 about talent, people, human resources, culture, everything. This was a big reset moment for us. It was not a pause. That's the problem. A lot of people said, okay, pause, and we're going to pick up where we left off. No, from a practitioner standpoint, we literally have to say, start all over. Reinvent your workplace with the idea of let's make it a 21st century workplace, not an improved 20th century workplace. What I've said to all of my colleagues in HR is go back at your handbook and rethink it. Go back and rethink your culture. Go back and ask yourself, challenge everything and every practice and say, does it have to be done that way? And when you honestly answer those questions and look at them without any of your own bias, then I think that will inform your practice so that you are really, really a practitioner. It would be a sad day for us to simply go back to how things were pre pandemic.

Yeah, let's shake things up.

That's right.

Jonny, thanks so much for being on the show today.

Thank you. I appreciate it. Be well.

That's Johnny C. Taylor, Jr. He's the CEO and president of the Society for Human Resource Management and author of the book A Leader's Guide to Work in an Age of Upheaval. Don't miss the rest of our Back to Work Better series. You can listen to episodes about the best way to build hybrid teams and how to refocus and find your purpose. Find them via Apple, Spotify or wherever you get your podcasts or@hbr.org this episode was produced by Mary Dew. We get technical help from Rob Eckardt. Adam Bucholtz is our audio Product Manager. Thanks for listening to the H Beer Ideacast. I'm Alison Beard.