This week, I became interested in understanding the significance of HR for the entire organization.  While learning about game theory, I came across a theory named after a mathematician named Lloyd Shapley.  An organization can be imagined as a sum of interactions across different players (it is a cooperative game with common objectives – largely).  The contribution of each entity is critical when trying to win toward the objectives.  Human Resources impact is really on the scale of hiring and managing the talent.   Even though a CTO can hire one or two engineers through their network, the process of bringing the right talent suited to the culture of a given organization largely depends on the Recruitment organization.  Draup goal is eventually to quantify the impact of each subprocess of HR through Shapley values.  (it may take some time, and we may reach out to some People Analytics members to check for the feasibility of such studies.  In 2020, a study was done by Mohammed El Mehdi JEIDANE from the University of Ottawa.  This study showed that Practices such as job enrichment, job enlargement, team orientation, high-level training, and the issue of rewards are among the practices that strongly correlate to organizational performance.  So if any executive asks why HR needs the budget, you can use this as a talking point? 

On July 19, 2023, Satya Nadella gave a keynote at Microsoft Inspire 2023.  There were three things from this speech

1. The characteristics of the Shift we are experiencing can be thought of through two components.
   a. Natural Language as the Interface for Applications-Driven User Interfaces
   b. Reasoning engine, the new superpower that works on top of all the data
2. AI will increase the global GDP by 7 to 10 Trillion US Dollars (this could be the anchor for net new jobs)
3. Nadella talked about the importance of diversity and inclusion in the industry and how that is essential to win in the changing world

The role of humans has not been diminished, but we are looking at a future where Humans will become more and more precious.  Workforce planners should urgently focus on changing demographics across the globe.  Here are a couple of red flags from global studies. 

• The annual number of students entering university in Japan between 2040 to 2050 is expected to fall by about 130,000 from 2022. 
• New projections show that California in the US will have about the same number of people in 2060 as it does now.

Several such studies are emerging across the globe.  So we have to preserve, develop and enrich our human resources.  But how do we fight with machines?  Interesting research (a working paper) by Marshall Van Alstyne – Professor, Boston University.  Professor Van Alstyne looked at the recent effect of ChatGPT on two networks.  Stack Overflow and Reddit.  While Stack Overflow declined from about 10% to 15%, no such decline happened in Reddit.  Why?  There are more human interactions defined as Social Characteristics in Reddit.  One way to preserve and expand human jobs is to increase social characteristics.

(From a working study of Marshall Van Alstyne – Boston University) 

A company by the name of Idlefish practiced this in their dispute management.  Idlefish is a circular economy platform company that buys and sells secondhand goods in China with over 500 million registered users.  When there is a dispute about a transaction, the dispute is managed through human voting of the users.  The company removed algorithms and brought humans into play.  As you can see, you have to think very differently to increase the role of humans (if you imagine an enterprise is nothing but a cooperative game theory entity) 

In my previous two emails, I discussed anticipating and predicting skill changes.  However, one effective approach to enhance the involvement of humans is through a strategy known as “Job bundling.” According to a recent VentureBeat survey, combining Cybersecurity skills with IT roles can better equip companies to face future attacks.  This finding provides an excellent opportunity for HR leaders to take immediate action. 

Here is a quick table of job bundling skills

We have launched a study on locations becoming dominant due to generative AI.  Due to efficiency plays, smaller locations are becoming critical.  Europe may emerge with many high-quality smaller talent pool options.  We will keep you posted.