Category Archives: The state of the world

The labour market: grizzlies and streams where the salmon run

Just when we thought it was safe to think of the workplace as a stable, predictable environment in which to earn a living and build a life, job security is slipping into reverse. Precarious (irregular) employment is becoming more common, governments are working at increasing the minimum wage and employers are still ‘hiring’ young people but not paying them because, those employers claim, they’re volunteers. The law now takes a dim view of such practices.

Deloitte (‘Six trends to watch in alternative work’), RBC Royal Bank (‘Predicting Tomorrow’s Workforce: More ‘bots, More Skills, More Anxiety’) and McKinsey Global Institute (‘What the future of work will mean for jobs, skills, and wages’) tell us that technology and higher education will figure prominently in the future of work. But when the rubber meets the road, neither comes with a guarantee of employment, lifelong or ottherwise. The 40-hour workweeks and permanent jobs with benefits and pensions we’ve always wanted for our children are at risk of becoming an endangered species.

(To read about a real-world application of what you just read, please visit GM Gets Ready for a Post-Car Future‘, FORTUNE 500, June 1, 2018, for a description of how and why GM CEO Mary Barra is changing the environment and culture at the 110-year-old automaker.)

Parchment isn’t delivering financial security and above average lifetime earnings the way it used to when the world was a more flexible and accommodating place. Demand for university graduates has never been stronger and more students are enrolling because of it. There are now so many degrees on the street that our children have to navigate buyers’ markets for talent, just-in-time work-forces and environments that reward employers for dragging out the hiring process. By 2025, enrollment at the world’s 26,368 universities will stand at 260 million. More graduates, more competition for work.

There are more different kinds of work to apply for and more new places in which to find it than at any other time in history. But résumé screening statistics show that only 10 job applicants in 100 understand what the labour market is and what makes it tick well enough to motivate prospective employers to call them in for an interview. They also show that only one of those 10 applicants will be offered a job. What they don’t tell us is how the work is going to be structured, how much it will pay, how long it will last and how employees and employers are going to relate to one another.

Our education system isn’t producing graduates who can make the connection between what they learn in school, labour markets, how employers determine what a degree is worth, and going for the brass ring. Every one of the 7.3 billion people on the planet wants their shot at that brass ring.

The National Geographic TV series One Strange Rock aired an episode entitled Survival on April 10th. It showed what survival is in a way that only National Geographic can. BBC Earth is doing the same. Human beings created the technology and shaped the attitudes that define the environments in which we live and and work. Our kids are going to support themselves in those environments.

Grizzlies pluck migrating salmon out of the air as they swim upstream to spawn. The streams are the labour market, the salmon are employment opportunities. Grizzlies know what salmon are, in what streams they’ll be running and how to catch them. We have to teach our children how to find the streams where the salmon run. Whether they’ll choose to fish when they get there and how well they’ll fish will be up to them. 

The world as Deloitte, RBC and McKinsey see it has implications for our children. They’ll have to learn about those implications at our knee because they won’t be learning about them anywhere else.

I teach parents and their young people how to connect school, labour markets, how employers determine what a degree is worth, and going for the brass ring. It’s a skill they’re going to need for the rest of their lives. Grizzlies already know that.

Neil Morris
President
Personal Due Diligence

The art of getting hired

Thinking in the language of the customer

Employers are customers and the customer is always right. But only 10% of applicants understand how employers think and today’s résumé rejection statistics prove it.

Parents expect to see a positive financial return on their investment in university for their children.1 Employers expect to see a return on their investment in hiring university graduates. Whether their child’s degree translates into a signed offer of employment in their chosen field or not will depend on whether the employer believes that their child will be a part of generating that return. Their children will be running a gauntlet of résumé screening applications that want to be spoken to in ‘Employer-ese’. Ninety percent of résumés don’t, including those submitted by newly minted graduates. Applicants who don’t survive the gauntlet aren’t invited to interviews.

Because of what’s on employers’ minds, the Royal Bank recently announced RBC Future Launch. It addresses the problem parents face if you’re contemplating sending their child to university, and there’s no escaping it. Clicking here2 will take you to the Future Launch home page. This is what you’ll see:

“Canada’s youth are set up to fail in the new economy. In fact, today’s generation is at risk of ending up poorer than their parents.1 Failing to close the gap in unemployment rates between Canadian youth and people of prime-working age would mean missing out on a nearly $30B lift to our economy.2 Young people deserve a chance, and that’s why we created Future Launch. If youth fail, we all fail.”

The next page (click here3) is entitled ‘Humans Wanted: How Canadian Youth Can Thrive in the Age of Disruption.’ It says, in part:

“In the coming decade, half of all jobs will be disrupted by technology and automation. Some will change dramatically. Others will disappear completely, replaced by jobs that are yet to be invented. We are living through an era of radical change, with the latest advancements in artificial intelligence and automation transforming the way we work,4 even in unexpected fields such as law and customer service.

“We discovered that the four million Canadian youth entering the workforce over the next decade are going to need a foundation of skills that sets them up for many different jobs and roles rather than a single career path. They will need a portfolio of human skills such as critical thinking, social perceptiveness, and complex problem solving to remain competitive and resilient in the labour market.

“We found that Canada is shifting from a jobs economy to a skills economy, and yet employers, educators and policy makers are not prepared. Here are four things you need to know about the coming skills revolution and the future of work:

Disruption Is Accelerating
F
lexibility Is the Future
Digital Literacy Is Essential
We Need to Prepare for the Future of Work”

It takes time and effort to learn how to appeal to a hiring manager. It pays off in a message that’s well received by the people who need to receive it. The process has to begin before irreversible, non-refundable post-secondary decisions are made.

“Jobs are evolving at the same pace as iPhone upgrades,” according to Andrew Petter, President and Vice-Chancellor of Simon Fraser University. The more graduates universities produce, the more we’re going to need.5

One day, we may all be able to send our children and ourselves to university purely for the love of learning. Until that day comes, we’ll have to find ways to decrease rejection rates by improving the way we prepare our children to leverage their education so that they can build the life they want to live.

That’s why I founded Personal Due Diligence.

 

F. Neil Morris
President

Personal Due Diligence

Everything old is new again, but with a twist

Twenty-five years ago, people in the know predicted that we would work at five different careers before we retired. They were short on specifics, but their model left no doubt that people would have to re-educate themselves to qualify for those new careers. They didn’t mention the part about bills to pay and mouths to feed.

The future they predicted is here, but with a twist. Twenty-five years ago, university was a lot more affordable than it is now. Incomes were more predictable and more secure. So were pensions.

The mounting cost of sending children to university is becoming more and more painful for more and more families. Which makes RBC Future Launch’s candor so refreshing and so necessary:

“Canada’s youth are set up to fail in the new economy. In fact, today’s generation is at risk of ending up poorer than their parents.1 Failing to close the gap in unemployment rates between Canadian youth and people of prime-working age would mean missing out on a nearly $30B lift to our economy.2 Young people deserve a chance, and that’s why we created Future Launch. If youth fail, we all fail.

 “In the coming decade, half of all jobs will be disrupted by technology and automation. Some will change dramatically. Others will disappear completely, replaced by jobs that are yet to be invented. We are living through an era of radical change, with the latest advancements in artificial intelligence and automation transforming the way we work, even in unexpected fields such as law and customer service.”

What RBC proposes is commendable. But its target market is university students and graduates who’ve already put their money down. Many of them may already have limited their employment and career options. They invested in a future relationship with an employer in a context called the labour market inside another context called an economy. They understood little or nothing about either.

What they chose to study was up to them. What the labour market and the economy will have to say about that will be up to someone else. We don’t teach our children that. RBC is proposing a cure to a problem that already exists. Kudos to them. But we need something concrete to prevent the problem in the first place. Personal Due Diligence is that something.

We’re told that the more graduates we produce, the more graduates we’re going to need. But parents and their children need to know where the jobs will be before their first tuition cheque comes due. Our governments are showing no signs of preparing lists with timetables of occupations that have been earmarked for disruption or obsolescence, let alone notes about how it’s going to happen and when. That’s something families will have to do on their own because once size does not fit all.

While we’re at it, we may want to pay special attention to what it’s costing financially, physically and emotionally to send our children there. ‘Hunger And Homelessness Are Widespread Among College Students, Study Finds’ is the title of a National Public Radio report about a survey done by Temple University in Philadelphia and the Wisconsin HOPE Lab in Madison.

We can’t hope our way to a solution. We have to build one. In an address on September 3, 2008, former New York Mayor Rudy Giuliani said, “Change is not a destination, just as hope is not a strategy.”

On January 23, 2009, CBS NEWS posted an open letter to President Barack Obama from Dr. Benjamin Ola Akande. Dr. Akande is an economist, scholar and Dean of the Business School at Webster University in St. Louis, Missouri. The title of his letter was ‘Hope Is Not A Strategy.’ You can find the full text by clicking here. This is an excerpt:

“Yet, the fact remains that hope will not reduce housing foreclosures. Hope does not stop a recession. Hope cannot create jobs. Hope will not prevent catastrophic failures of banks. Hope is not a strategy.”

Our youth must win so that we all can win. That’s why Personal Due Diligence exists.

Neil Morris
Founder & President
Personal Due Diligence

+1 905.273.9880
info@personalduediligence.ca

Three articles, our children, and food for thought

 

A recent Bloomberg Businessweek article entitled, Is Your Job About To Disappear?: Quick Take, said this:

“Throughout much of the developed world, gainful employment is seen as almost a fundamental right. But what if, in the not-too-distant future, there won’t be enough jobs to go around? That’s what some economists think will happen as robots and artificial intelligence increasingly become capable of performing human tasks. Of course, past technological upheavals created more jobs than they destroyed. But some labor experts argue that this time could be different: Technology is replacing human brains as well as brawn.”

In his review of “The Golden Passport” in the April 10th New York Times, Andrew Ross Sorkin wrote, “The book is a richly reported indictment of the [Harvard Business School] as a leading reason that corporate America is disdained by much of the country … Citing a report from the Aspen Institute, [the book’s author Duff] McDonald explains that “when students enter business school, they believe that the purpose of a corporation is to produce goods and services for the benefit of society. When they graduate,” he continued, “they believe that it is to maximize shareholder value.”

The Real Threat of Artificial Intelligence appeared on the Opinion page of the New York Times Sunday Review dated June 24, 2017. It was written by Kai-Fu Lee, chairman and chief executive of Sinovation Ventures, a venture capital firm, and the president of its Artificial Intelligence Institute.

Clearly the debate is heating up. At some point, someone or a group of someones will decide the winner, if there is a winner. Others will hand down a verdict on whether or not the Harvard Business School should take the credit or the blame for how enthusiastically business has embraced technology.

Families about to engage with their children in discussions about post-secondary education might want to answer these questions: Will there be 40-hour-a-week jobs with benefits and retirement pensions? Where? What kinds of jobs will they be? What education will it take to qualify for them? It’s a start.

James T. Kirk and the Kobayashi Maru

 

On his third attempt, Captain James T. Kirk of the starship Enterprise passed the Kobayashi Maru holodeck “no-win” training exercise by reprogramming it. He was subsequently commended for original thinking. Whether or not this was Starfleet’s way of saying that reprogramming was an option because it was not expressly forbidden, only the film’s writers Roberto Orci and Alex Kurtzman know for sure.

Fiction or no, that part of Star Trek lore resonates in 2015, especially the part about original thinking. The 6 crew members onboard the International Space Station may be excused if they haven’t had time to contemplate how sub-US$50 crude oil will impact on them and their families. But the rest of the people on planet Earth won’t have that luxury.

For Canadians, the world started to change on July 1, 2014. On that day, the Loonie closed at 94 cents. It started changing a lot faster when the Bank of Canada lowered its interest rate to 0.75% on January 21, 2015. We’ll soon be paying a lot more for our morning orange juice, and a lot of other things, courtesy of a 78.5-cent dollar as of February 1, 2015. The interest rate could fall to 0.5% as early as March. Barclays Bank has downgraded its stock ratings for the Bank of Montreal, Royal Bank and TD Bank, noting that “consumer borrowing, the main profit driver for Canada’s banks, will likely slow even more than previously expected”.

Much of the reason will be stories like Target Canada’s abrupt closing of its 133 retail outlets and the 17,600 Canadians who were let go as a result. That doesn’t include Target’s suppliers. SONY Canada is closing its retail stores. Alberta now faces the prospect of recession. Oil companies are cutting back on capital expenditures and hiring. CIBC will be laying off 500 employees because of slower than expected profit growth.

The Kobayashi Maru scenario left little room for “if it ain’t broke, don’t fix it”. For the moment, Canada looks like an oil-based, one-trick pony. Canadians will have their say about whom they blame and what should be done about it on October 19th—or sooner.

We keep hearing that a lower dollar will be good for Canadian manufacturers and exporters. But in the meantime, we have to play the cards we’ve been dealt. That will call for out-of-the box thinking by Canadians looking to become re-employed and those hoping to land that first job.

What is broken and needs to be fixed is the notion that we can or should rely on governments at any level to do our thinking and planning for us. Most have shown that they can barely think for themselves. We’re going to have to develop our own versions of Kirk’s Kobayashi Maru, because without them, not all choices having to do with postsecondary education will be the right choices. There is nothing on the horizon to suggest that conventional thinking will mean that there will be more than enough good, secure, full-time work to go around.

As Jean-Luc Picard, captain of a later Enterprise, would have put it: “Make it so.”

 

From industrial to post-industrial: What does it all mean?

Graduating from university has traditionally been synonymous with the good life and financial security. In some cases, it still is. But not for graduates with degrees for which there is no demand. Work was supposed to be plentiful, not precarious. Yet here we are. The world has changed and we have to rethink how our children are going to earn a living and what kind of education they’re going to need. We have to talk to them about higher education, about how the cost is rising, and about how it wasn’t supposed to be this way.

Economies and societies evolve from industrial to post-industrial. That’s what’s been happening to us for the last 35 years. Wikipedia defines a post-industrial economy as: “A period of growth within an industrialized economy or nation in which the relative importance of manufacturing [shrinks] and that of services, information, and research grows. Such economies are often marked by:

“The industry aspect of a post-industrial economy is sent into less developed nations which manufacture what is needed at lower costs (see outsourcing). This occurrence is typical of nations that industrialized in the past such as the United States and most Western European countries.”

Akio Morita, the better known of SONY’s two co-founders, recognized the signs that North America’s economy was in transition in the mid-1980s. When he died in 1999, The New York Times published an account of his life that described when the transition began:

“In the 1980’s, when Japan seemed on top of the world, Mr. Morita was among the most vocal of the Japanese executives in criticizing American business and hailing the success of the Japanese model. He said American managers were financial paper shufflers who ‘can see only 10 minutes ahead’ and were not interested in building for the long term. And he said that because American companies were losing interest in manufacturing, the United States was abandoning its status as an industrial power.’ Those factors, he said, and not trade barriers, were the reason for America’s trade deficit with Japan.

“’There are few things in the United States that Japanese want to buy, but there are a lot of things in Japan that Americans want to buy,’” he wrote in 1989. “’This is at the root of the trade imbalance. The problem arises in that American politicians fail to understand this simple fact.’”

We’ve learned, some of us more painfully than others, that Morita was right. As went manufacturing, so went the economy. But manufacturing has been going elsewhere for the last 35 years and most people who have jobs appear not to have noticed. They’re convinced that a return to the good old days is just around the corner and they’re educating their children accordingly.

Even if they were right—and they’re not—graduates have discovered that the jobs “in their chosen field” that were supposed to pay off their student loans aren’t there any more. That’s something they and their parents should have known before they wrote the cheques or negotiated the loans.

Some of those graduates live in the U.S. and owe US$1.2 trillion. Their Canadian cousins owe between C$25 billion and C$50 billion.

Morita’s pronouncements were behind my founding Personal Due Diligence, or PDD. If the implications were going to impact on my two children, they were going to impact on other people’s children, too. PDD is sharing with parents and their children one-on-one the lessons of the last 35 years and helping them apply those lessons to choosing higher education. The seven planks in our platform are:

  • Researching and monitoring Canada’s economy
  • Researching and monitoring the global economy
  • Researching and monitoring the labour market
  • Acquiring and analyzing deep market intelligence
  • Identifying and analyzing industry trends
  • Quantifying and projecting precarious employment
  • Business case preparation to support a Plan A and Plan B scenario

An article entitled ‘The New Debate Over The Very Rich’ appeared in the June 29, 1992, issue of FORTUNE. It said in part: “Between 1980 and 1990, FORTUNE 500 companies shed 3.4 million jobs, but companies with fewer than 500 employees created more than 13 million.”

The Canada-U.S. free trade agreement (FTA) came into force in 1989. My multinational IT executive search clients were already responding. The consequences figured in our family’s discussions about university.

Canada now has 12 free trade partners. That number will grow to 21 when current negotiations conclude. There will be concessions, compromises, headcount reductions, restructuring, outsourcing and offshoring as employers adjust to their new normal. Please see the Foreign Affairs, Trade and Development Canada website for further information.

2014 in review

The WordPress.com stats helper monkeys prepared a 2014 annual report for this blog.

Here’s an excerpt:

A New York City subway train holds 1,200 people. This blog was viewed about 5,000 times in 2014. If it were a NYC subway train, it would take about 4 trips to carry that many people.

Click here to see the complete report.