Human Capital Intel - 5/13/25
Contradictory data hits decision confidence | Hiring slowdown freezes disengagement | AI job replacement | Independent contractor rule | SMB AI struggles
Welcome to the latest edition of Human Capital Intelligence, your weekly brief synthesizing over 250 leadership, HR, and people sources to filter out the noise. As always, we would love to hear from you at ken@reyvism.com with questions you’d like answered or topics covered.
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By Ken Stibler; Powered by Reyvism Analytics
Deep Dive: Why leadership is getting harder
What to do when the data is telling different stories
What's a leader to do when the morning's market report contradicts yesterday's earnings call? Fortune 500 businesses are increasingly not providing guidance as un-foreseeable circumstances pierces leaders’ ability to guide.
Contradictory information is the culprit, take AI data from this week: one report shows 95% of businesses are doubling down, while BCG reports IT departments are cutting AI spending by over 4% for the year. Constantly conflicting data isn’t just annoying, it’s creating a subtle breakdown in the ability to construct a coherent worldview for decision-making.
Without clarity, despite being tasked with providing it to those across the organization, leaders are struggling. This January saw the highest CEO turnover since 2002, with 55% of employees questioning their organization's mission in the wake of leadership changes.
Successful leaders in large companies are responding with three practical approaches:
Stop seeking perfect information, and instead build systems that triangulate across multiple conflicting sources.
They're developing scenario-based frameworks that acknowledge multiple possible futures rather than committing to a single forecast.
Communicating (even when there’s nothing to communicate). Admitting where uncertainty lies helps stakeholders prevent assuming all is uncertain.
What’s Next: Horizon scanning, external firefighting, and choosing a path are core requirements of leaders. Yet a more volitlite and untrustworthy data environment is making these more difficult. Rather an accepting a reversion to gut-based decisions, top leaders will dig down and adjust their market scanning for an environment that demands more and offers less.
A lack of mobility raises need for employee engagement ops
As Trump's tariff uncertainty transforms the "Big Stay" into an "Endless Stay," businesses face disengaged employees with no exit options. Glassdoor reports burnout surged 32% year-over-year to record highs in Q1 2025, with affected employees rating employers 26% lower across all metrics.
With exits blocked, disengaged employees forced to stay, and metrics suffering as a result, CFOs are increasing getting involved in people planning. This is coming with recategorizing engagement programs from discretionary spending to essential operational investments, implementing targeted recognition initiatives and internal mobility pathways that combat the pervasive feeling of being "undervalued."
What’s Next: Structure talent gaps won’t be solved by market timing. As colleges get further behind and less applicable, organizations that want top talent will either have to pay for it, or do the hard work of developing robust training and development systems.
ChatGPT Prompt: AI backup for mid-level managers
Act as a leadership coach for fast-growing operations leaders [Insert industry]. My middle managers often get promoted fast—but without the systems to lead well at scale. I want to give them a light but powerful AI tool they can use weekly to improve. Help me create a prompt that takes in: (1) a challenge they’re facing (e.g., disengagement, team burnout, unclear escalation path), and (2) a few notes from their last 1:1 or coaching session. The output should include: (a) a likely root cause, (b) one leadership technique to try (coaching model, feedback style, delegation approach), and (c) a conversation script they can test in their next team meeting.
Reading List:
AI makes critical thinking a critical skill
Critical thinking has become the essential workforce skill as AI rapidly absorbs routine tasks. IBM CEO Arvind Krishna revealed that the company has replaced "hundreds of HR workers" while increasing hiring for roles requiring human judgment in sales, engineering, and marketing. The UAE has mandated national AI education from kindergarten through high school demonstrates how smart governments are pivoting to develop these higher-order capabilities in future workers.
What’s Next: Duolingo, the language learning app, received a massive backlash for an announcement that it was replacing all contractors with AI. Adopting can reduce direct labor costs and make room for more strategic human capital, but publicly pushing for AI replacement will generate pushback.
DOL pauses independent contractor rule
The Department of Labor has effectively suspended enforcement of the Biden administration's 2024 independent contractor rule, directing field staff to revert to Trump-era guidance from 2008 and 2019 while considering formal rescission. While this enforcement pause doesn't change employers' legal obligations in private litigation, it signals the regulatory pendulum swinging back toward the "economic reality" test from the more employee-favorable "totality-of-circumstances" framework
What’s Next: Much of the deregulatory movement shifts activity to states and courts. Keeping the higher standard if already adopted is smart amid regulatory volatility.
AI is failing small businesses without key foundations
Small businesses are experiencing an AI reality check, with American Express finding over two-thirds of adopters report AI is falling short of expectations. Strategic implementation failures tops the list as Accenture research reveals merely "layering AI onto existing workflows" creates minimal value, with only 13% of organizations achieving meaningful returns.
What’s Next: Companies allocate 3x more to AI than to workforce development or data management. The first step is to balance out this deficit, investing in the knowledge/data and human capital infrastructure needed to make tools useful.
Data Point: Work friends
83%
likelihood of increased motivation when employees have strong workplace relationships according to the Society for Human Resource Management.
In Other News:
Trust in leadership may be barometer for company health, report finds. (HR Dive)
AI Has Upended the Search Game. Marketers Are Scrambling to Catch Up. (Wall Street Journal)
Why today’s business leaders are turning to Stoacism a 2,000-year-old philosophy to deal with volatility. (Fortune)
Um, What? — Lyft CEO says he swears by ‘falcon mode’ leadership to fight off the ‘enshittification’ of his company. (Fortune)
Everyone Is Cheating Their Way Through College. (NY Mag)
Corporate America Is Leaving More Jobs Unfilled: Most employers aren’t laying off workers, but many will pause hiring while the trade war plays out. (Wall Street Journal)
GenZ wants work to be broken up into micro-shifts - flexible, six hours or less blocks. (Forbes)