Let’s Talk about More than Just Where We Work

The Human Capital Era Demands We Rethink the Who, What, How and Why of Work.

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October 20, 2021
Team Engagement

Author’s Note:

With vaccinations affording a return to office-based work late this year or early next, business theorists are debating obsessively – and myopically – where work will take place. Will we return to the office of 2019? Unlikely. Is a pants-free work-from-anywhere the office of the future? Perhaps for some. Is the office/work-from-home hybrid the new normal? Many people think so. Yet as interesting as those debates may be, if our only learning from 75 weeks of pandemic lockdown is about where we work, then we’ve missed the tremendous opportunity to rethink every dimension of work in the Human Capital Era. For workplaces and people to thrive, we have to rethink not just where we work, but who works, how we measure work, what we do for work, and perhaps most importantly why we work.

In this first of a series of essays, we’ll examine Who works. Later, we’ll explore how we measure work. The current 8-hour day/40-hour week work environment is the result of Henry Ford’s observations in 1926 that accidents and errors occurred after 8 hours of work because routine physical labor breaks down at eight hours. Fewer and fewer of us do routine physical work today. Cognitive labor breaks down differently. Perhaps our workday structure should be different, too.

What we do for work is changing, too. As more and more work becomes collaborative the routine and predictable tasks are increasingly offloaded to technology. That shift demands that we continually re-tool ourselves for new types of work. Indeed, the shelf life of (technical) skills is shortening so quickly that the skills gap will never close.

Why we work is rapidly changing, as well. Once, we worked for survival. Then, we worked for identity and status. Now, more and more people are working to fulfill a greater purpose. In fact, recent research found that as much as 50% of the workforce is looking to change occupations in the next year to better align with their purpose and values.

But let’s not get ahead of ourselves; Let’s first look at who works.

Re-imagining the Workforce

Perhaps you remember the father figure in the classic television show Leave It to Beaver. Each morning, Mr. Cleaver kissed is wife as she handed him his briefcase and sent him off to work. Mrs. Cleaver dutifully cared for the house and did her best to raise the couple’s charming, if precocious, boys. Characters like these played roles in many of the television scripts of that era, and often still do. A White middle-class dad works an office job, surrounded by other White men, occasionally interrupted by the single Gal Friday. Mom stays home with the kids, helped from time to time by a housekeeper or handy man, often the only characters of color seen on television.

These stereotypes worked on screen because they were, in their time, mostly true. The workforce of the era put the “White” in white collar jobs. Women in the workforce were an anomaly. People of color filled the ranks of blue-collar service workers. Most certainly, these stereotypes no longer hold true. The U.S. population is more racially and ethnically diverse than at any time in our country’s history, data from the 2020 U.S. Census shows. That diversity is just beginning to be reflected in the workforce and on college campuses. In 2019, the Bureau of Labor Statistics reported that 76.5% of the workforce is White, 13% is Black, 6% is Asian, and 1% each is American Indian and Alaskan Natives. In 2019, people of Hispanic or Latinx ethnicity, comprising multiple races, made up 18 percent of the total labor force. The majority of Hispanics in the labor force were White (89 percent), Black (5 percent), and Asian (1 percent).

About 35% of the total U.S. workforce has a bachelor’s degree or higher education, according to Statista. By race, 35% of Whites have higher degrees, 25% of Blacks, 57% of Asians, and 18% of Hispanics.

Still, the stereotype isn’t changing fast enough to capture the true benefit of a diverse workforce. Researchers at McKinsey have been tracking the impact of diversity in the workforce since 2014, gathering data from more than 1,000 large companies across 15 countries. Without question, the research shows that “the most diverse companies are now more likely than ever to outperform less diverse peers on profitability.” Yet the firm’s report also bemoans the “slow progress” of companies toward building diverse and inclusive workforces.

So what’s happening in various worker segments and what must we do to fully capture the value diversity, recognizing that diversity and inclusion is not just a moral imperative; it is an economic one?

Women Hold Up Half the Workforce

Faced with labor shortages in 1950s China, Mao Zedong famously noted that “women hold up have the sky”, spurring women to enter the workforce on equal footing with men. Since the 1970s, nearly all the gains to the U.S. middle class have come from women entering the workforce, according to research by Brookings Institution. And by the first quarter of 2019, according to Pew Research, women became the larger share of the university educated workforce for the first time in history. In fact, more women than men have earned bachelor’s degrees since 1982, master’s degrees since 1986, and doctoral degrees since 2006, according to Department of Education data. That is a robust talent pipeline of 13 million more university-educated women than university-educated men over the last few decades.

Adding well-educated women to the workforce has significant and universal benefit, especially now as we tackle thorny challenges from climate change to income inequality to navigating the COVID-19 pandemic. This challenging future requires a different style of working, one that is less about individuals executing tasks in isolation and more about collaborative exploration. The collective intelligence needed to tackle complex challenges especially requires the input of women. A recent cross-disciplinary research paper titled “Quantifying Collective Intelligence in Human Groups” found that, to quote researcher and author Anita Williams Woolley: “We also continue to find that having more women in the group raises collective intelligence, and in the supplement we specifically compare face-to-face and online collaborators and find few differences in the elements that lead to collective intelligence.”

Yet despite the dramatic increase in the population of university-educated women and the clear benefit they bring to much-needed collective intelligence, women continue to be under-represented in the higher echelons of corporate America. At the largest (by market capitalization) and arguably most influential companies in the United States – technology companies including Apple, Amazon, Facebook, Alphabet (Google), and Microsoft - employee gender skews more than 72% male, according to recent data. During the pandemic, women did assume more leadership roles, according to Catalyst which has been tracking women in business for decades. Still, women account for only a record high of 7.8% of S&P 500 CEO roles.

Yet even as women prove valuable in the workforce, we are losing their contribution, largely due to the burden of caregiving and the lack of childcare infrastructure in the United States. We lost nearly three million women from the workforce at the height of the pandemic with 1.5 million women are yet to return to work. Many of those women are moms or otherwise have caregiving responsibilities for their families. Women, and in particular women with caregiving responsibilities (and for that matter, anyone with caregiving responsibilities) should be the norm, not the exception, as we design our work systems. According to research by the New York Times, if women had been compensated for that caregiving, even at minimum wage, in 2019 it would equate to $1.9 trillion in the US and 10.9 trillion globally.

The Tipping Point of a Diverse Workforce

The U.S. population is more racially and ethnically diverse than at any time in our country’s history, data from the 2020 U.S. Census shows. That diversity is just beginning to be reflected in the workforce and on college campuses. The Bureau of Labor Statistics reports that 78% of the workforce is White, 13% is Black, 6% is Asian, and 1% is each of American Indian and Alaskan Natives. About 35% of the total U.S. workforce has a bachelor’s degree or higher education, according to Statista. By race, 35% of Whites have higher degrees, 25% of Blacks, 57% of Asians, and 18% of Hispanics.

The White majority in the population and the workforce, however, is on the cusp of change, according to demographers who expect this majority status to ebb by 2045. Change in economic status, however, is not moving as quickly. While education was supposed to close the Black wealth gap, a recent Wall Street Journal analysis of Federal Reserve’s data found that it actually has grown wider over the past three decades. Black college graduates in their thirties have higher levels of debt than both their peers and prior generations (debt over $44 thousand vs. $6 thousand for previous generations, adjusted for inflation). The median income for Black college graduates grew 7% from 1990 to the late 2010s while their White counterparts saw median income growth of 13%.

Structural racism comes at a high economic cost, according to research by Citi that blames racism for $16 trillion in lost economic activity between 2000 and 2018. Undeniably, we have left minority communities in the US behind in education, wealth building, and equitable access to opportunity. This is a loss of human potential. Partly energized by the George Floyd Protests and the Black Lives Matter movement, collectively the largest movement in our countries history, we have seen a consistent force towards creating greater opportunities at work as evidenced by a rise in Diversity Equity and Inclusion positions in companies and the inclusion of the Measure Up Metrics in the Fortune 500 reporting. Now, the moral argument for income equality is meeting an economic one, prompting late but laudable efforts by corporations to build black and minority wealth and driving more inclusive education policy. Evidence of changing economic mindsets is also evident in the surge in Black entrepreneurship during the pandemic, according to Kauffman Foundation, to its highest rate in 25 yearsoutpacing entrepreneurship among all other races.

These shifts are not just the right thing; they are the necessary thing in a global society with global markets. The emerging reference to nonwhite people as “People of the Global Majority” rather than People of Color signals that largest market is no longer primarily White.

Still Waiting to Be Out at Work

Despite dramatic shifts in social acceptance, including full marriage equality in 2015, still 46% of LGBTQ+ people say that they are closeted at work, according to the Human Rights Campaign, a number only marginally better than the 50% of folks who in 2008 said they closeted at work. (A depressing stat for me as an openly gay woman.) This lack of disclosure – and the further complexity of intersectionality - makes it challenging to collect meaningful statistics on LGBTQ+ workers. In recent years, our social understanding of gender has shifted from one that was fixed and binary as the norm to one that is increasingly gender fluid. Cases in point: By the end of 2021, U.S. Passports are expected to allow for a nongender binary gender distinction and currently 22 of 50 states legally recognize non-binary gender designations, up from 11 states in 2019. And in a June 2020 6-to-3 ruling, the Supreme Court found that federal law bans employment discrimination based on sexual orientation and gender identity under Title VII of the Civil Rights Act, which made it illegal for employers to discriminate in employment because of a person’s sex.

Despite progress on protections and inclusion, representation of LGBTQ+ individuals lags other workers. That’s particularly true in the ranks of entrepreneurs. More than a decade ago, the Kauffman Foundation found that the majority of net new jobs come from companies five years and younger. Startups are the engine that keep our jobs economy roaring. Yet joint research by Socos Labs and StartOut, through their Inclusion Impact Index, found both LGBTQ+ and female founders are being left out. In fact, the underfunding of both LGBTQ+ and female founders has left an economic loss of $660 billion in exits and millions of jobs over the last twenty years.

The Wisdom of a Multi-Generation Workforce

The median age in four of the five largest US companies (Apple, Alphabet (Google), Microsoft, Amazon, and Facebook) is 33 or younger, with Microsoft trending slightly older and more aligned with the median workforce age which is early 40s. We celebrate the young, usually male entrepreneur in the hoody sweatshirt. But the reality is much different. The median age of successful entrepreneurs, Wharton researchers say, is not 25 but 45. Yet, we celebrate youthful workers exclusively at our peril.

In the world of work that requires continuous learning and adaptation, our brains develop across our lives in a manner that recommends the advantages of multi-generational workforce. A 2015 research study by Dr. Laura T. Germine of Massachusetts General Hospital and Dr. Joshua K. Hartshorne of MIT found a range of cognitive peaks across the lifespan. Fluid intelligence - the ability to respond quickly - peaks earlier in life and crystalized intelligence - the accumulation of facts and knowledge - peaks later. Things like vocabulary and ability to read emotions peak in the 40s and 50s. Our continuously changing and uncertain world requires leaders who can help other workers adapt, making these mentoring skills increasingly in demand.

And perhaps the greatest uncertainty of all? The size of 65+ population grew by over 34% over the last decade as Baby Boomers aged leaving still unknown the longer-term implications for work as more folks 65 plus left the workforce in 2020 than in any time since the Bureau of Labor Statistics began tracking in 1948.

The Case for a Multi-Dimensional and Diverse Workforce.

As we drive deeper into the digital economy, humans will continue to be the greatest source of value creation. Little optimizes the investment in humans more than diversity in the workforce - and especially in leadership. Multi-dimensional and diverse workforces make stronger organizations better equipped to meet the demands of their market and communities by every measure: innovation, financial returns, and employee engagement.

As business seeks to build more value of all kinds (not just financial), we need to do a better job of tapping into a diverse workforce and creating the conditions for humans to thrive. Diversity, then, doesn’t mean simply adding more women, more people of color, more LGBTQ+ people to our employment rolls. It requires a state change in the organization to capture and take advantage of the diverse perspective.

We must create work environments, structures, processes, recruitment strategies, retention plans, and talent mobility that shatter old stereotypes to build workforce structures that maximize all human potential. This is the opportunity of the Human Capital Era.

In the next installment we will examine how what we do for work is rapidly changing with profound implications for both workplaces and our systems for learning.

This piece was first published on Forbes.

Guest contributor Heather E. Mc Gowan
Guest contributor Heather E. Mc Gowan
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October 20, 2021
Team Engagement