Why we should all be concerned about banking job losses

By Neil Patrick

News reached me this morning that RBS is to make 20,000 (about 20%) of its staff redundant in the next few years. These job cuts will take RBS staff numbers to their lowest level in more than a decade.

RBS is expected to exit its Connecticut-based US investment banking business, as well as shutting down large parts of its Asian investment bank.

 Ross McEwan, Chief Executive of RBS. Photograph: Ian Macaulay/PA

If you are not familiar with RBS, in brief, these job losses and business closures will likely see RBS staff numbers, which stood at 161,000 at the time of its £46bn government bailout in 2008, fall to below 100,000 for the first time since the bank’s 2000 takeover of larger rival NatWest.

Since the bailout, the RBS share price has been languishing in the doldrums:

So what?

You may not care about bankers losing their jobs. You might even think it’s the very least they deserve.

I spent almost 20 years in banking and finance and left it for good in 2004. I cannot claim any great moralistic reasons for this choice or even foresight about the tsunami which was headed towards the sector. No, I was just a bit bored and wanted to do other things. But I have retained an interest in the sector and watched its grisly agonies like a train wreck.

So I feel I have a unique perspective. First inside experience of how banks operate and stage manage their communications and second a degree of detachment which makes me neither sympathetic nor an outright bank hater.

Why this news is significant

The public reaction to this news was even more interesting than the news itself. People’s reactions are shaped by their political and social beliefs more than anything else it seems.

Those of a socialist persuasion see this as some kind of moral victory, but also suspect that these redundancies will be softened with generous exit packages. Those of a more capitalist orientation see it as share price manipulation and the share price did tick up a few points on this news granted. Those who are inclined to a conspiracy view of the world see this news as evidence of yet more government and big business bosses in collusion for their own ends.

I subscribe to none of this positions, though I can see some truth in all of them. What I am really interested in though is what this tells us about the future of work in general.

This is yet more evidence of how technology will continue to destroy jobs for everyone

Buried behind the headlines was this comment:

Project Cook, the internal codename for the plans, will deliver cost cuts which are intended to help fund increased investment on vital IT systems after a series of embarrassing glitches caused millions of the bank’s customers to lose access to their money.

Ross McEwan, CEO, is understood to believe that only increased automation will allow the bank to compete with rivals such as Barclays and Santander UK, which have spent billions of pounds building state-of-the-art computer platforms to offer customers better online and mobile banking services.

This is how the banks frame their statements for public consumption. These headcount cuts are presented as being an investment to enable them to deliver better customer services through more and better IT.

The job cuts are explained as being necessary so that customers and investors can both benefit. Regulators will be happier too as these changes will improve the bank’s capital ratios.

These things may all be at least partially true. But they don’t matter. What matters is that thousands of high paying jobs will be lost and replaced with a combination of technology and lower cost labour. And because similar trends are developing within the rest of the sector and businesses as whole, many within this massive exodus of workers will find nowhere to be rehired.

This accelerated contraction of the banking sector jobs means these people will soon be looking for jobs outside the sector. Which may well mean they’ll be after your next job.

This is why this isn’t good news for anyone.

Why your next job contract may scare you to death

By Neil Patrick

We are inclined to think of our careers as a steady climb to a peak of success and personal fulfillment. That 's great from the point of view of a personal life goal. The trouble is that employers are rapidly abandoning any commitment to helping us do that. 

We're on our own and we're not climbing a mountain, we're riding a very rickety roller-coaster. But if we understand how employer thinking is evolving and practices are changing, then at least we have a better view of what's ahead and how we can survive the ride.

Today I came across an insightful piece on Forbes by Edward Lawler titled in perfect management speak, ‘Creating Talent Agility’.

It’s written for an audience of business and HR people, but it reveals much about how we can expect employers to treat employees in the future.

Warning: This post contains facts which some readers may find disturbing...

The reality is that there’s now a yawning gap between what employers are willing to offer and how employees define a good employer.

The traditional implied contract between employers and employees for most jobs was abandoned years ago. This isn’t because employers have become somehow more evil. It’s the hard realities of business in an ever more competitive global business environment. Lawler reminds us that this change is also accelerating:

“Organizations must be increasingly agile in ways that allow them to change what they do and how well they do it. Organizations have always had to change the skills of their workforce. The big difference today, however, is how rapidly this needs to happen and how much change needs to occur”.

Lawler goes on to describe three employer models and gives examples of who uses them and why. 

The traditional career employer

This is probably closest to how most people think an employer should behave towards its employees. It’s been around so long that it has become the default position for how most of us frame our expectations about what a good employer does.

It’s still used by some organizations including General Electric. Lawler describes it thus:

“Fundamentally, it relies on a career model of talent development and agility. Individuals are told that if they will commit themselves to a career at the company, it will “look after them” and be sure that they are trained and developed for tomorrow’s jobs. When new skills are needed, individuals are expected to want to learn the new skills because they know it is in their best interest for their long-term job security and career development.” 

The contractor-employer

The second category Lawler identifies is what I think resembles long-term contract work. There is no implied employer obligation to the employee beyond paying you. When your usefulness expires for whatever reason, you’re out. Period. This model is used by firms like Netflix, LinkedIn, and many other tech companies.

In Lawler’s words:

“It tells individuals that they will be well-paid and have a job as long as they can perform at a high level and do the work that needs to be done. There is no promise of a career, skill development, or job security. This approach produces low transaction costs when it comes to shifting the skill sets of the organization. Training is not required and terminations can be relatively easily executed without individuals feeling the organization has violated their employment contract.”

For workers who have highly sought after skills and the willingness to be highly mobile in their work, this model delivers high returns in exchange for a somewhat nomadic lifestyle. It’s great for a young tech worker, but almost unworkable for just about everyone else. 

Crowdsourced labour

According to Lawler, “Odesk and other companies have developed crowdsourcing technologies that allow organizations to buy labor that is willing and able to perform tasks for a contracted amount. In essence, the organization relies on outsourcing much of its labor and may outsource anything from a few hours to a few months’ worth of work. It is frequently used by companies that are looking for software development, but also for less skilled labor such as survey respondents and a host of more transactional activities. “

This model is closest to what has been termed “labour on demand”. Whilst Lawler quotes its popularity in the software development sector, in the UK at least, it has spawned a much more sinister variant, the ‘zero hours contract’.

Almost unheard of in the United States and mainland Europe, in the UK, looser government employment regulations have allowed firms to employ workers with no guarantee of the number of hours work they will get each month. It’s often an unequal contract in which the worker commits to availability for work, whilst the employer makes no commitment to actually providing any minimum number of hours of work.

For employers with highly fluctuating requirements for low-skilled labour, the zero-hours contract has been a godsend. Suddenly their workforce can be increased or decreased almost in realtime. At a stroke one of their major cost problems is eliminated.

But this isn't the end of the story. When we consider this development alongside the impact of technology on jobs which is deskilling some work and eliminating other jobs altogether, we get a glimpse of a seriously distopian future.

In an employment sector which was merely providing work for people who wanted to earn small second incomes, this would be a good thing. The terrible realty in a depressed jobs market is that this type of work has exploded and for many low-paid workers, it is the only work they can find.

From a small base of around 50,000 UK jobs in 2005, zero hours contracts have grown and grown. The Office for National Statistics (ONS) quotes that there are now a staggering 1.4 million zero hours contracts in use in the UK in 2014!

N.B. Here's a link to the latest (Autumn 2016) report and stats about zero hours contracts from the Office for National Statistics.

Of course the government loves zero hours contracts because along with the growth in 'self-unemployment', such ‘jobs’ allow the government to report falling unemployment. It’s spin and it supports the growth in wealth inequality.

Worse it’s now a feature of many ‘respectable’ firms’ employment practices. According to Wikipedia, one of the UK's largest pub chains, J D Wetherspoon has 24,000 staff, or 80% of its workforce, on contracts with no guarantee of work each week. 90% of McDonald's workforce in the UK - 82,000 people - are employed on a zero-hour contract. Britain’s biggest and most troubled supermarket chain, Tesco uses zero hours contracts.

A major franchise of Subway also uses the contracts, which state, "The company has no duty to provide you with work. Your hours of work are not predetermined and will be notified to you on a weekly basis as soon as is reasonably practicable in advance by your store manager. The company has the right to require you to work varied or extended hours from time to time." Subway workers are also required, as a condition of employment, to waive their rights to limit their workweek to 48 hours.

Boots UK has 4,000 staff on zero-hours contracts. Even Buckingham Palace, which employs 350 seasonal summer workers, now uses zero hours contracts.

My take is that hard cash will always trump elegant academic and ethical arguments in most businesses, most of the time. And since the cost of labour is usually the largest part of any business's operating costs, what we are witnessing isn’t a growth in employment options, it’s a relentless movement towards less and less secure employment and lower incomes for most people most of the time.

Have you got the key skills for the information age?

By Neil Patrick

I’ve  been writing a great deal recently about the destruction of jobs by what is variously called, the third industrial revolution, knowledge economy or new machine age. This situation creates a whole new set of challenges for everyone who wants to earn a living in these tough times.

Most of us know it is happening. What's thin on the ground is information about what we can do about it.

We need new solutions and we need to take personal ownership of our own countermeasures.

This isn’t just my opinion. Multiple and diverse organisations are reporting the same thing:

Manpower states that despite the recession, 31% of employers struggle to find qualified workers because of “a talent mismatch between workers’ qualifications and the specific skill sets and combinations of skills employers want.”

The American Management Corporation says that employers want workers who can think critically, solve problems creatively, innovate, collaborate, and communicate.

The National Association of Manufacturers reports, “Today’s skill shortages are extremely broad and deep, cutting across industry sectors and impacting more than 80% of companies surveyed. This human capital performance gap threatens our nation’s ability to compete . . . [and] is emerging as our nation’s most critical business issue."

The National Academies claim that “The danger exists that Americans may not know enough about science, technology, or mathematics to contribute significantly to, or fully benefit from, the knowledge-based economy that is already taking shape around us.”

The New York Times reports that low-skilled workers are being laid off and "turned away at the factory door and increasingly joining the swelling ranks of the long-term unemployed . . .” This issue results from a disparity between the skills that workers have and those that employers need.

So what can we do about it?

If the last time you sat in a classroom was at university or an employer’s course, the chances are high that your learning skills have significantly reduced. Of course we all acquire job specific skills at work, but what we don’t generally continue to develop in our jobs are the learning skills that are now critical for 21st century career survival.

If we accept that the pace of change in the world is accelerating, then it is logical to conclude that our ability to adapt to change must also be increasingly critical. And the key enabling mechanism for coping with change is learning.

What are the key learning skills for the 21st century workplace?

21st century skills are a set of abilities that everyone needs to develop in order to succeed in the information age. The Partnership for 21st Century Skills has identified three key learning skill areas.

I call them the three Cs of thinking; critical thinking, creative thinking and collaborative thinking:

Critical Thinking

Critical thinking is the ability to think clearly and rationally. It includes the ability to engage in reflective and independent thinking. Someone with critical thinking skills is able to do the following :

 

• understand the logical connections between ideas 
• identify, construct and evaluate arguments 
• detect inconsistencies and common mistakes in reasoning 
• solve problems systematically 
• identify the relevance and importance of ideas 
• reflect on the justification of one’s own beliefs and values 

After we leave education and start to exist in the world of our jobs, our critical thinking skills may easily become rusty. Other factors start to influence and direct our thought processes. The competitive environments we often experience encourage competitive reactions – the exact opposite of one of the other Cs – collaboration.

So good critical thinking skills not only break the force field of groupthink, they also encourage collaboration.



Creative Thinking

This is the process by which individuals come up with new ideas or new approaches to business. New ideas could result in new products, procedures or policies. They could also result in a new process that cuts costs or improves quality - for example, a bagless vacuum cleaner.

Fresh ideas give businesses a competitive advantage and help make their goods or services stand out in the market place.

We can make use of several different thinking techniques to improve our creativity:

• Lateral thinking or thinking outside the box. An example of this would be breaking down the steps taken to serve coffee in a café and asking 'why' at each step to see if a better process can be created. 
• Deliberate creativity uses thinking techniques to spark off new ideas. For example, putting on different thinking hats to tackle problems from different angles. 'White-hat' thinking looks at facts and 'black-hat' thinking looks at drawbacks. 
• Blue-sky thinking involves a group of people looking at an opportunity with fresh eyes. As many ideas as possible are generated in an ideas generation session where no ideas are rejected as silly. 

Collaborative thinking

There are generally accepted to be seven rules for all collaboration:

Look for common ground: find shared values, consider shared personal experiences, pay attention to and give feedback, be yourself and expect the same of others, be willing to accept differences in perception and opinions

Learn about others: consider their perspectives and needs, appeal to the highest motives, let others express themselves freely

Critique results, not people: do not waste time on personal hostility, make other people feel good, avoid criticism and put downs

Give and get respect: show respect for others' opinions, be considerate and friendly, put yourself in the other person's shoes, be responsive to emotions, speak with confidence but remain tactful

Proceed slowly: present one idea at a time, check for understanding and acceptance of each idea before moving on to the next. Speak in an organized and logical sequence.

Be explicit and clear: share your ideas and feelings, pay attention to nonverbal communication, speak clearly and make eye contact, select words that have meaning for your listeners

Remember the five "Cs" of communication: clarity, completeness, conciseness, concreteness, and correctness

It's not a co-incidence that the social web or internet 2.0 also functions with these principles at its core.



New Skills for New Jobs

These skills have always been important for personal development, but they are now absolutely critical in our information-based economy. When most workers held jobs in industry, the key skills were knowing a trade, following directions, getting along with others, working hard, and being professional - efficient, prompt, honest, and fair.

To hold information-age jobs though, people also need to think deeply about issues, solve problems creatively, work in teams, communicate clearly in many media, learn ever-changing technologies, and deal with a flood of information. The rapid changes in our world require us to be flexible, to take the initiative and lead when necessary, and to produce something new and useful.

But these thinking skills aren’t just relevant to our careers and jobs. They play a part in making the world a better and more just place for all of us. I think there’s a good argument that the absence of these thought processes within the management of the banking world was the biggest single factor in the financial collapse of 2008. If we ever needed an example of the terrible consequences of endemic groupthink, we need look no further.

So next time you are considering what skills you could acquire to enhance your career prospects, think outside the box and think about what you can do to improve your thinking skills. Not just for yourself but the world as well.

It's now official - The Global Jobs Crisis is real

By Neil Patrick

When I set up this blog, I was convinced that the subtitle – Global Jobs Crisis was appropriate and justified.

But many of my friends online and offline commented that they thought I was being rather apocalyptic. Even sensationalist. After all it does rather fit with the sort of conspiracy theory stuff which abounds in the online media world.

But I stuck with it nonetheless. Not because I wanted to be alarmist or a doom-monger. On the contrary. I wanted to raise awareness of the problem and try to find solutions that would work for people at a personal level.

It was simply the most appropriate tagline I could come up with which described the unfolding situation as I saw it. And with every week that passes I see more evidence that it remains the right subtitle.

So today I was interested to see that two years after I started this blog, none other than the World Bank has issued a report which describes the global jobs crisis in forensic detail.

I’d forgive anyone for not noticing it. It went more or less unremarked upon by the mainstream media. It’s titled in typical government speak and somewhat benignly: “G20 labour markets: outlook, key challenges and policy responses”.

The World Bank, Washington
By Shiny Things [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)] via Wikimedia

Behind the dull bureaucratic title is the starkest confirmation I've yet seen which describes in depressing detail, the true nature of the problem.

The world is facing a global jobs crisis that is killing the chances of reigniting economic growth. Worse there is no magic bullet to solve the problem.

The Study was released at a Group of 20 (G-20) Labor and Employment Ministerial Meeting in Australia in September 2014. The Bank says an extra 600 million jobs need to be created worldwide by 2030 just to cope with the expanding population.

"There's little doubt there is a global jobs crisis," says the World Bank's senior director for jobs, Nigel Twose.

"As this report makes clear, there is a shortage of jobs — and quality jobs.

"And equally disturbingly, we're also seeing wage and income inequality widening within many G-20 countries, although progress has been made in a few emerging economies, like Brazil and South Africa."

He said that overall emerging market economies had done better than advanced G-20 countries in job creation, driven primarily by countries such as China and Brazil, but the outlook was bleak.

"Current projections are dim. Challenging times loom large," said Twose.

Who says something really matters

Local mainstream media is so heavily influenced by national government spin that we cannot take anything that is said at face value. And I do my best to expose the most blatant deceptions about jobs and employment news that I come across.

Which is why this report has to be taken seriously. The World Bank isn’t beyond the influence of key stakeholders with their own agendas. Many have argued that the World Bank which has had an American as its President ever since its creation in 1946, promotes a US based world view.

And I have concerns that the World Bank still clings to a largely discredited view on monetary systems.

But critically, the World Bank isn’t controlled by politicians. And that’s the most important thing in my view. No-one at the World Bank is trying to win votes from citizens. They gain no benefit by telling people that things are better than they really are.


100 million unemployed

The report, compiled with the OECD and International Labor Organization, said more than 100 million people were unemployed in G-20 economies and 447 million were considered "working poor," living on less than US$2 a day.

It said despite a modest economic recovery in 2013-14, global growth was expected to remain below trend with downside risks in the foreseeable future, while weak labor markets were constraining consumption and investment.

The persistent slow growth will continue to dampen employment prospects, it said, and warned that real wages had stagnated across many advanced G-20 nations and even fallen in some.

"There is no magic bullet to solve this jobs crisis, in emerging markets or advanced economies," said Twose.

"We do know we need to create an extra 600 million jobs worldwide by the year 2030 just to cope with the expanding population.

"That requires not just the leadership of ministries of labor but their active collaboration with all other ministries — a whole of government approach cutting across different ministries, and of course the direct and sustained involvement of the private sector."

The Group of 20 leaders have called for each member country to develop growth strategies and employment action plans. They emphasized the need for coordinated and integrated public policies, along with resilient social protection systems, sustainable public finance and well-regulated financial systems.

"Coordinated policies in these areas are seen as the foundation for sustainable, job-creating economic growth," says the report.

So there we have it. The responsibility for solving the problem has been passed to national governments. And they are urged to adopt a cross-departmental approach to solving the problem.

Given the nature of governmental silos and the painfully slow way in which government policies are formulated and implemented, I’m not holding my breath for any big breakthroughs anytime soon.

And sadly the subtitle of this blog seems to be one thing which isn’t about to become redundant for a long while yet.

From slavery to technology – a brief history of jobs.

By Neil Patrick

How can anyone expect to sell their labor in a future world where machines will do all the work?

Human civilization goes back more than 10,000 years, to when the first Neolithic peoples emerged. Early humans had four over-riding needs to survive: food, shelter, clothing and materials to make tools and weapons. No-one had told them about Maslow’s hierarchy of needs of course. So they didn’t know what they were missing. Consequently, self-actualization wasn’t too much of a priority for early man.

Money also didn’t exist in pre-history. The level and range of consumption was so low that simple bartering sufficed for millennia. Today, it’s hard to even imagine a society that isn’t based on money. And whilst many of us wish we had more money, we don’t really think very much about what money actually is. Let alone about the monetary and central banking systems that prevail in the world today. Instead, we mostly think of money as a handy way of facilitating the exchange of goods and services by means of a convenient and universally acceptable token.

While early man worked digging, planting, hunting, foraging and building mainly to satisfy his own needs directly, today, we exchange our work for money from satisfying the needs of others on a daily basis. We go to work, and that work is usually a job.

A job, any job, is labor. Whether you sweep streets or perform brain surgery, you are engaged in labor. And every job trades money for labor. In general terms, the scarcer your labor is relative to the demand for it in the market, the more highly paid you will be.

But slavery not paid work was the basis for the world’s most successful civilizations.

The more work a society can extract from its population, the more successful and powerful it becomes. So, the powerful members of society in all civilisations were quick to spot the opportunity that was available if you could get labor for free. The means to obtain this was the exertion of force. Slavery was created. We think of this as an ancient and barbaric practice. But the world’s greatest empires and nation states from ancient Greece to Rome and Egypt all leveraged free labor to build their power.

Not many workers were actually paid for building this.

Slavery was so successful that it proved remarkably persistent through the centuries, including in the US and Europe. The thirteenth amendment to the US Consitution, abolishing slavery, was passed by the Senate in April 1864, and by the House of Representatives in January 1865. The amendment did not take effect until it was ratified by three fourths of the states, which occurred on December 6, 1865, just about 150 years ago, which is yesterday in terms of human history on earth.

But that was far from the end of it. More recently, slave labor was the chosen means to sustaining the power of the Third Reich and effectively prolonged WW2 in Europe. Not to mention directly bringing about the premature demise of millions of innocents who were quite literally worked to death. But looked at from a purely economic perspective, slavery is a very effective method for a group of people to acquire by force greater wealth and power than they would be able to do by legitimate means.

But slavery hasn’t really ended.

Today slavery is far from over. Its most loathsome variant has been given a rebranding for a start; human trafficking. There are many different estimates of how large the human trafficking and sex trafficking industries are. Kevin Bales, author of Disposable People (2004), estimates that almost 27 million people are in "modern-day slavery" across the globe.

Only a little less exploitative is the debt-slave or indentured servant. Largely made illegal almost everywhere, this practice remains widespread in many parts of the world today. In order to pay off debts (often incurred through nefarious means in the first place), a person becomes a virtual slave, working to pay off debts that never actually reduce enough to free them.

A less repellent form of indentured servitude is the apprenticeship, where an individual trades their labor in return for training. Whilst an internee may not think of themselves as a slave, they are still willingly participating in a form of indentured servitude. This is why internships are on the rise. They are no more and no less than a white collar version of indentured servitude.

And even the academic world exploits free labor. Here, indenture takes the form of the scholarship system used by most universities. Nearly all Ph.D. programs use graduate students as a supply of virtually free labor, assisting staff and professors to carry out their work on research projects.

Now even slaves are about to be put out of work.

Quite apart from the abhorrent human suffering created by slavery, it has profound economic consequences on the rest of the population. Slave or low paid labor lessens the demand for paid labour. Which in turn makes the rest of society poorer, with the critical exception of those who are able to derive benefit from leveraging slaves or low paid workers.

And right now there’s a whole new generation of slaves. Except they are not human. They are better and even cheaper than human slaves. They are machines. They are micro-chips. And they are multiplying faster than a virus.

And this is the problem with technology. We love the way it enables us to do tasks faster, cheaper, better than ever before. At home and at work. But technology is both a glorious gift and our potential nemesis. Just like slavery, technology is consuming the opportunities available for people to exchange their labor for money. And technology is destroying jobs at an unprecedented and accelerating pace.

Plenty believe that this is just scare-mongering. That there is absolutely no historical precedent when technological progress has resulted in anything other than increased wealth and prosperity. That much is true. But today isn’t yesterday. And here’s why. We cannot separate technology from two other factors which combine to make today different from any time before; finite natural resources and a monetary system based on ever-compounding debt.

Planes, trains and automobiles.

Whilst some will profit from the creation of new types of work created by the tech age, many more will be condemned to a life of exclusion and poverty. And it's not just low paid manual workers. High skill jobs are under threat too. Even with their lengthy training, professionalism and high status, pilots’ days as the rockstars of the world of transportation are numbered.

How long before an aircraft cockpit no longer needs windows?

Unmanned aerial vehicles (UAVs) are now flying all over the world every day. Not just as surveillance platforms and weapons carriers for the military. They are doing photography, crop spraying and rescue work. Amazon founder, Jeff Bezos announced in December 2013 that Amazon is planning delivery of some of its parcels using UAVs. This was met with skepticism, with perceived obstacles including federal and state regulatory approval, public safety, reliability, individual privacy, operator training and certification, security (hacking), payload thievery, and logistical challenges. But just 7 months later, in July 2014, it was revealed that Amazon was working on its 8th and 9th drone prototypes, that could fly at 50 miles per hour and carry 5-pound packages.

It can only be a matter of time before unmanned aircraft are carrying passengers and much bigger payloads. How many pilots will become unemployed as more and more aircraft become pilotless?

Calling an argument “Luddite” doesn’t refute it.

The fear that technological progress threatens jobs is nothing new. In 19th century England, the Luddites, a group of textile workers carried out violent protests against newly developed labour-saving machinery from 1811 to 1817. The spinning frames and power looms introduced during the Industrial Revolution threatened to replace the artisans with less-skilled, low-wage labourers, leaving them without work. The artisan Luddites burned mills and smashed looms. Many were subsequently arrested by the government and either executed or transported to penal colonies.

How many people working as drivers today will have little or no work 10 years from now? Right now, every day, Google has driverless cars trundling round the streets of California 24/7. Interestingly, in August 2011, a Google driverless car was involved in a crash near Google headquarters in Mountain View, California. The neo-Luddite’s celebrations at this news were short-lived, when Google reported that the car was being driven by a human being at the time of the accident.

Economists apply the term “Luddite fallacy” to the notion that technological unemployment leads to structural unemployment and is consequently economically calamitous. Their argument is essentially that if a technological innovation results in a reduction of necessary labour inputs for a given activity, then the industry-wide cost of production falls. This in turn lowers the price of the goods or service and increases the supply. The combination of greater supply and lower prices pushes consumption higher. Theoretically, this higher production volume requires an increase in aggregate labour inputs and this extra labour requirement offsets the unemployment caused by the original technical innovation.

But this is where the economists have got it wrong. They are looking at the question from too narrow a perspective. Implicit in their theoretical viewpoint is that our capacity and appetite to consume is limitless. That consumption is potentially infinite and only price dictates how much we will consume. The Luddites existed at a time when scarcity was still a prevalent state of affairs. Today, scarcity of goods has become scarce. It's only the world's non-renewable natural resources which are getting scarcer.

Machine derived work has replaced scarcity with over abundance.

Today, technology means we can produce way more than we can consume. Technology has almost eliminated scarcity in the developed world. Prior to 1800, the world was a low energy society. And the primary unit of work was a human being. A working human can produce about 0.1 horsepower. During this time, around 98% of all work done was the result of human labor. The remainder was animal power and basic technologies like the waterwheel. Machines existed, but they didn’t replace humans, they merely assisted human tasks.

So throughout all of mankind’s history, until around 1800, 98% of all work done was done by humans. This ratio was a fixed constant and meant that while 2% of humans enjoyed wealth and comfort, 98% endured a struggle just to survive. For millennia, there was no absolutely change in the energy available to produce things and so scarcity prevailed everywhere.

In 1781, James Watt created the first steam engine. Since that time there has been continuous technological progress and machines have become more and more efficient at converting energy into work. These developments have spread throughout the world and the United States was the clearest leader.

James Watt's and Henry Boulton's steam engine, 1784
By Robert Henry Thurston , via Wikimedia Commons

Between 1800 and 1900, the use of human labour steadily reduced, as the proportion of non-human energy moved ever upwards. The continuation of these two trends predicted that eventually machines would be doing more work than humans. And this is exactly what happened. We can more or less pinpoint when it happened - 1911. At this point, the proportion of machine-derived work overtook human work for the first time. And its growth has continued exponentially ever since.

As of 1992, the USA had over 35.3 billion horsepower of work energy available from non-human sources. This was a gain of over 4000% in just 192 years, and represents 89,000 kg-cal of mechanically derived work energy per person in the US. Before 1800, this figure had been constant for all time at just 2,000 kg-cal per person – a growth of over 44 times! This made the USA the first country in history able to produce more than it could consume and was the foundation of the US becoming a global superpower in the 20th century.

Today it is no co-incidence that the US is struggling to recover from the reverberations of the 2008 financial collapse. But the financial collapse wasn’t the cause of the recession, it was a symptom of it. A symptom of a society in which the creation of abundance by technology has overtaken the abilities of people to earn money by selling their labor to a market where scarcity was disappearing.

This isn’t a prophecy of doom or neo-Luddite manifesto however. It is merely a description of why we all need to grasp a new economic paradigm if we are to survive and prosper in the 21st century. It’s not the end, rather it’s the beginning of a new economic era. We are on the cusp of a transformation of society which voids many of the ideas that underpinned all our thinking about how we earn the money to lead our lives.

I'm not the only person that thinks this. This TEDx talk by economist Andrew McAfee argues that that, yes, machines will take our jobs. The kind of jobs we know now. And here he thinks through what future jobs might look like, and who will become the 21st century's have's and have-nots.

If you’re highly qualified, how come you can’t get a job?

By Neil Patrick

How can it be that so many highly skilled people are unemployed, while employers claim they cannot find people with the right skills?

Over the weekend I was reading The Third Industrial Revolution by Jeremy Rifkin. Although this book is about the economic, environmental, technological and social issues we face today, within its covers there is an explanation of this apparent contradiction.

And understanding this is of critical importance to anyone who wishes to prosper in their career over the long term.

We’re on the cusp of a new industrial era

Jeremy Rifkin has identified that industrial epochs are characterized by two determining factors. These are the dominant energy source and communication media.

So, the first industrial era was powered by coal and the prevailing communication medium was the printed word. Society organised itself around these…coal powered transport and industry and provided heat and light to homes and businesses. Print communicated everything from newspapers and novels to instruction manuals and bibles. All were committed to print.

The second industrial era is now in its death throes. This was driven by oil and the dominant communication mediums were radio, television and the telephone. In case you've not noticed, the oil is running out fast and TV and radio have ceased to be the dominant media they were in the last 60 or 70 years. Oh and it seems telephone landlines are becoming less and less popular too.

Rifkin believes that the third industrial era will be based on green energy and the internet. This change will have massive implications for the types of jobs we all do. The effects of the transformation will impact every one of us, not just those working in energy, communications and media. And there is clear evidence in many of the events that have unfolded over the last few years that he is right.

Rifkin even argues convincingly that the current financial crisis was a symptom of the end of the second industrial era, rather than the cause of it.

We’re all potential victims of accelerated obsolescence

So not only are we currently undergoing a transformation of society itself, the technologies which will define our society in the 21st century are undergoing a revolution too.

And because the pace of technological change is accelerating, very few people can assume that their skills will be current for much more than 10 years or so.

Google didn’t exist in 1995. Back then I would search the internet using a long forgotten search engine called Dogpile. Today, if a business doesn’t rank high on Google searches, it’s increasingly invisible and rightly or wrongly judged as second rate.

The credit industry was dominated by credit cards until 2008 and the financial collapse. Try finding a job today if you’re a credit card professional. Despite the credit crunch starting almost 6 years ago, one of the biggest UK credit card issuers, MBNA has been contracting now for years. It currently employs around 3,000 staff, down from 4,224 in 2011.

Yellow Pages was a huge global business for decades. But despite trying to shift its business online, it’s facing an inexorable decline in its relevancy. Not only that, it fails on environmental grounds too. The Product Stewardship Institute claims local governments spend $54 million a year to dispose of unwanted phone books and $9 million to recycle them. Phone books use low grade glues and are therefore difficult to recycle, and they often clog recycling machinery.

There’s no job security in established businesses either

Of course the decline in the fortunes of businesses is nothing new. What is new is that the speed at which a firm can move from established business and secure employer to contraction or even obsolescence. And if your career is tied up with one of them, your skills can become worthless very quickly.

The U.S. Postal Service suffered 30,000 layoffs in March 2010. Sears/K-Mart layed off 50,000 in January 1993. IBM layed off 60,000 in July 1993. And General Motors layed off 47,000 in February 2009. And these are just some of the biggest. For every one like this, there are hundreds of smaller less well reported downsizings and closures.

Organisations are very good at disguising their difficulties right up until the last moment. Are you really tuned in to the real situation at your employer? You need to be.

So if you are planning to work until you are 65 or beyond, you can fully expect that you’ll need to completely reinvent yourself at least 4 or 5 times over during your career. Note that I say ‘reinvent yourself’ not just change jobs…

Peter Weddle makes this comment on the ASQ blog. This is his take on it:

"Today’s turbulent economic environment has changed the way employers fill their vacant positions. Instead of using their traditional approach — hiring a person who is qualified for a job -they have turned to a new strategy that is best described as “talent staffing.” As a result, tens of millions of decent, dedicated and capable people — men and women who have successfully worked their entire lives — are now unemployed, unsuccessful in their search for a new job and unable to figure out why. No one has told them that the rules of the game have changed".

Do not confuse this with the economic downturn

It’s tempting to think that our recent woes are because of the recession. And that if and when things recover, we’ll all be much more secure in our jobs. Think again.

This isn’t a temporary state of affairs, it’s a paradigm shift which will continue to accelerate over the coming years and decades. It is this speed of change which means that often, skills which were cutting edge as recently as four or five years ago, can be obsolete today.

So you need to keep not just your skills but your TALENT up to date. And that’s the crux. If you are employed, you can fully expect that your employer isn’t going to react very enthusiastically to a request for a couple of weeks off work.  You're asking them to pay for you to learn some new stuff that may very well not be relevant to the job you are doing today, but which may be critical to the job you’ll need in say three or four years’ time…

If you are looking for work, you need to understand that employers will only hire individuals who have all of the skills to do a job and the state-of-the-art knowledge required to use those skills effectively on-the-job. They seek better-than-qualified persons to do a job, and they expect superior performance from them and from their first day of work.

This means they expect you to be the custodian of your talent value. That’s down to you not them.

What is talent?

Ironically, even though millions of people in Europe and the US are now unemployed and looking for work, a large percentage of employers believe there is a shortage of individuals with talent. They are quite wrong to think this of course. But perception is reality whether it is right or wrong.

Peter Weddle defines talent thus:

In practice, employers have defined a person of talent to be someone who has one or both of two attributes:

They have a skill that is critical to organizational success and a track record which demonstrates their ability to use that skill effectively on-the-job.

and/or

They perform at a superior level on-the-job which sets a standard that encourages their co-workers to upgrade the calibre of their work, as well.

The tragic irony is that employers do little or nothing to help their employees develop and hone their skills and talents for the future. So the moment you get hired is the moment your talent value starts to slowly but inexorably erode. You can be sure that your employers will only invest in you if they perceive a more or less immediate return on that investment.

What can you do about this?

Employers want to hire all-stars. Not just people who are good at what they do, but people who are clearly the best at that task. And the only way you can be such an all-star is if you are working with your talent.

First, make sure you know where your talent lies. Talent is not skill. Talent is an inherent capability, a natural capacity for excellence at a particular type of work. Talent is as individual as you are. But it cannot be universally used. No talent is compatible with all work, but every talent can be expressed in more than one career field. It can be developed to perform in one environment today and another tomorrow. But before you can do that, you have to understand precisely what you are talented at.

Second, make sure you are working in a career field and for an employer that enables you to express your talent. Employers aren’t hiring your skill, they’re hiring what they think will be your total contribution to their organisation. And right now if you have a job and your work isn’t allowing you to demonstrate your true talent, then it’s time to be looking elsewhere, even if you think your current job is OK.

Thirdly if you’ve identified your talent then you must do everything possible to nurture it, especially if you are not able to do this in your normal job. Because this isn’t something you can achieve in a few weeks or months, doing this while you are employed is vital.

Finally, you must step back and take the long view. The prospects for your firm and industry affect you. Directly. Whilst it’s easy to think that when Lehman Brothers collapsed in September 2008, it was an unpredictable event, the truth is that there were signs at least one year earlier that the firm was in financial difficulties. Moreover, five years earlier, in 2003, it had suffered an $80 million penalty from the SEC for using its researchers to unduly influence market prices.

Yes, it’s unfair that the rules of the game have changed. And yes, it’s even more unfair that employers never bothered to tell anyone about it. But if you step back and understand what is going on, you’ll be better equipped to deal with the reality. And if you fully embrace the reality, you’ll seek and find and the work you really love and build a sustainable career with it.

Job Security: Two Key Factors You Can Control

BY MARCIA LAREAU


Unemployed jobseekers routinely tell me that they have two concerns about their future. The first is about job security. The second is the fear of being stuck in a job they dislike.

About 30% of the people I work with are currently employed and are looking to change jobs. Their number one concern is job security. More often than not, they don’t like their current job and want to change to something they can enjoy.

RecruitGroup reported that the 2006 data indicated that people would change jobs 5 to 7 times in their lifetime. So if a person begins their career at age 22 and works until they are 65, they would change jobs every 6 to 8 years.

In 2010, researchers conducted a study showing that respondents between the ages of 18 and 42 had held 10.8 jobs. That’s a new job every 2.2 years. It does seem reasonable that a person in their early career might change jobs more often.

These studies are siting career changes and freely admit that they have a difficult time identifying what exactly a career change is. This article sites the Department of Labor:

Career change statistics suggest that the average person will be making a career change approximately 5-7 times during their working life.

[However] with an ever increasing number of different career choices on offer, about 1/3 of the total workforce will now change jobs every 12 months. By the age of 42 you will probably already have had about ten jobs. [DOL]

If one third of the total workforce changes jobs every 12 months, then 3 years is the average time in a job.

What can you control as you manage your future?

I started asking questions:

• What can we rely on to manage this many transitions in our career? 
• What can be done now to make these transitions as smooth as possible? 
• What are the factors that will allow a person to ride the waves of change and prepare for their future? 

What are the qualifying factors?

We qualify for jobs with our skills, experience and education. For example let’s say that a job posting requires a Bachelor of Science, 10+ years of industry-specific experience and other skills such as contract negotiation, supervision, and perhaps a specific software.

If you have these qualifications, then you apply for the job …along with everyone else that has similar skills, experience, and education.

Do you think that your 12 years of experience will be that much more impressive than the person with 10 years of experience…probably not.

So these qualifications leveled the playing field. You aren’t unique, you aren’t different and so far there is no reason for this company to look at you rather than the other candidates. You haven’t differentiated yourself.

The key qualifications are important, but they simply qualify you for the position. They don’t differentiate you in the least. There has to be more. There has to be something else.

What are the two differentiating factors?

Assuming you made it through the Applicant Tracking System (we get through about 80% of the time), and someone determined that you truly qualify for the job, you become part of an ocean of applicants that all look alike.

I wanted to know what caused hiring professionals to move people from the qualified pile to the phone-call pile. So I went around and asked them that question.

Factor number one:

Believe it or not the primary differentiating factor is your innate work attributes and how you use them to benefit the organization. It’s a combination of who you are and how you work that is then focused on achieving the mission of the company by promoting their values and driving business results.

This information, presented clearly and succinctly on your cover letter and résumé will help you get a job. It will separate you from the ocean of applicants. It will identify you as a person who will consistently deliver value as companies manage change. It’s about who you are and your understanding of the company and their key drivers.

This is the information that answers the question, “Tell me about yourself.” It is how you should respond to, “Why do you think this job is a good fit for you.”

Factor number two:

You can control the people you engage with as you build your network. They need to understand your value. They need to know who you are and how you bring value to an organization that is beyond your skills, experience, and education.

When anyone in your network promotes or champions you, it should be about your value rather than your qualifications. Again, this differentiates you from others. It’s why you don’t have to talk about your skills, experience, or education. Those things have to be there but the critical factor is about “who you are.”

Do you really understand your value?

Some people call this your Unique Value Statement or UVS. That’s fine. Do you know what your value is—from an employment perspective? Do you know how to apply it to a company mission statement? Can you demonstrate this value on your résumé and during a 30-minute phone interview?

If not, consider the Forward Motion Differentiation Workshop. We offer it as a webinar and in person, in groups, and privately. We call it The Differentiator!

Called a Creative Thinker, Career Futurist, and a person of unusual solution, Marcia LaReau founded Forward Motion, LLC in 2007. Since that time, she has become a recognized leader in the employment industry, and Forward Motion has spread across the United States and abroad to help jobseekers find jobs that fit.

Website: http://forwardmotioncareers.com/
Blog: http://forwardmotioncareers.com