Human Capital Intel - 11/12/2024
Digitally illiterate execs | GenZ management requirements | FTC warns about worker surveillance | 'Little' workplace abuses | Salary rises return to normal
Welcome to the latest edition of Human Capital Intelligence. As always, we would love to hear from you at ken@stibler.me with news ideas, feedback and anything else you find interesting.
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By Ken Stibler; Powered by Reyvism Analytics
What’s Working:
Digitally illiterate leaders threaten tech-driven productivity growth
Employee frustration is mounting over executive resistance to AI adoption, with new research from SThree revealing workers lose approximately six hours weekly to manual tasks that could be automated. A striking 63% of employees attribute this technological stagnation to their superiors' "digital illiteracy," while research from Tech.io indicates that two-thirds of business leaders have barely implemented new AI technologies due to limited understanding of their potential benefits.
The resistance to AI adoption has spawned a growing underground movement of AI users, with Salesforce reporting that one in five workers now secretly employ AI tools without management's knowledge. This trend contradicts the narrative that employees fear AI-driven job displacement, instead suggesting that workers are actively seeking productivity gains through technology adoption, even without official sanction.
SAP's recent survey of 4,000 employees and managers reveals a clear correlation between AI literacy and workplace sentiment. Nearly 70% of employees with high AI literacy anticipate positive outcomes from AI implementation, compared to just 29% of those with low literacy. The study also found that less AI-literate workers were significantly more likely to feel apprehensive, afraid, or distressed about using AI in the workplace.
The productivity implications are significant, with Accenture reporting that 40% of companies globally are experiencing negative productivity growth despite major technological advances. The consulting firm advocates for a more holistic approach to digital transformation, emphasizing the need to redefine productivity beyond traditional cost measures and invest in technology strategies that empower, rather than replace, the workforce.
To address these challenges, HR and L&D teams are being called upon to boost organizational AI literacy through peer learning models, hands-on training, and success story sharing. However, the research suggests that without a fundamental shift in leadership's approach to technology adoption, companies risk falling behind in productivity growth and facing increased employee dissatisfaction. Notably, 55% of surveyed employees believe that AI users should receive better performance reviews than non-users, highlighting growing expectations around digital literacy.
GenZ’s special requirements give managers headaches
The mounting challenge of managing Generation Z workers has pushed nearly one in five managers to consider quitting their jobs, according to a stark new report from Intelligent.com. The survey of 1,000 U.S. managers reveals an even more troubling trend: half report having fired Gen Z employees, while 27% say they would avoid hiring them altogether if possible, pointing to a deepening generational divide in workplace dynamics.
The challenges appear rooted in a skills gap exacerbated by the COVID-19 pandemic, according to Huy Nguyen, Chief Education Advisor at Intelligent.com. While Gen Z workers typically possess strong technical abilities, they often lack traditional workplace soft skills, leading to increased demands on management resources. Two-thirds of managers report modifying their management style to accommodate these younger workers, with 75% indicating that Gen Z employees require additional time and support.
The strain is reshaping hiring practices and workplace culture, with nearly a third of hiring managers actively favoring older workers, according to separate research from ResumeBuilder. The situation is further complicated by Gen Z's paradoxical approach to workplace rules - while they're more likely to consult company codes of conduct, they're also more inclined to bend rules to achieve objectives, creating potential compliance challenges in multi-generational workforces. Half of all managers report that their younger workers cause tension among other generations in the workplace.
Quote of the Week:
“They are not given a sort of mechanism or process in which they can coach and develop their employees proactively, so they sort of do these things on an ad hoc basis."
— John Schneider, Betterworks CMO on the energy drain in unsupported management
Reading List:
FTC warns businesses about worker surveillance
Employee surveillance and AI-powered monitoring tools could land businesses in legal trouble, according to a stark new warning from the Consumer Financial Protection Bureau that brings workplace surveillance under decades-old consumer protection laws. The guidance, released Thursday, extends Fair Credit Reporting Act protections to modern workplace monitoring technologies, requiring employee consent, data access rights, and dispute mechanisms for workers subjected to algorithmic evaluation.
Read more in the Wall Street Journal.
Salary increases finally return to normal
The era of outsized salary increases appears to be ending, with Salary.com data revealing that average salary increases dropped from 4.3% to 3.9% in 2024. While the median increase held steady at 4%, the composition has shifted dramatically - only 14% of companies now offer raises between 5% and 6.9%, down from 25% last year, while 38% of firms have returned to pre-pandemic norms of 3-3.9% increases.
However, the return to historical norms poses challenges for HR departments, as Payscale reports employees continue to expect the elevated compensation levels they've grown accustomed to during recent years, ranking pay as their greatest challenge in talent management and retention strategies.
Read more at HR Dive.
Companies crack down on ‘little’ workplace abuses
Corporate America is tightening its scrutiny of employee perks and privileges, with companies implementing increasingly sophisticated monitoring systems to catch even minor infractions of workplace policies. Payhawk, a corporate credit card administrator, reports growing demand for enhanced controls, including real-time spending alerts and location-specific restrictions on card usage, while high-profile cases at Meta, Ernst & Young, and Target demonstrate companies' willingness to terminate employees for seemingly minor violations.
Read more at Wall Street Journal.
Data Point:
43%
The percentage of U.S. adults who are more afraid of having to work on-site full-time than they are of breaking up with their romantic partner or getting a divorce, according to a LiveCareer survey.
In Other News:
To Help Your Team Learn, Set Them Up for Productive Failure. (Harvard Business Review)
Do insider or outsider CEOs perform better? Estée Lauder and Ross Stores’ new leaders illuminate the divide. (Fortune)
Confessions of the Office Workhorse. (Side Hustles)
Career growth may not be a cure-all for front-line employee unhappiness. (HR Dive)
A Look at How HR Teams Can Implement Successful Employee Retention Strategies. (Hunt Scanlon)
Let's (not) do lunch employees are skipping out on opportunities to recharge. (Employee Benefits News)
Amazon refused to provide a deaf warehouse worker with ASL interpreter, lawsuit alleges. (HR Dive)
The Rise of Fractional HR: A Flexible Solution for Modern Business. (HR Daily Advisor)
If you want your company’s stock to go up, hire wonkier IT people: AI job ads as a sort-of measure of corporate technological advancement. (Financial Times)