INSEAD Knowledgecasts-Building Employee Commitment

INSEAD Knowledgecasts

Building on my previous post about future of management in talent intensive worlds, I just found a great podcast from INSEAD Charles Galunic, Professor of Organisational Behaviour and Dean of the EMBA Programme called "Building Employee Commitment" (Knowledgecast nº 8).

Amongst other things, he reached to a similar conclusion to the one I mentioned. Based on some research they found that companies do two types of investments for their employees:
- Firm specific, very much related to the specific characteristics of that firm
- General investment, that in turn make people more mobile (I called it more employable) like general management, leadership development or technology.
They found out that investments made in more general things, actually secure more commitment from employees!!

Of course this is a much better way to put it, but we share the same underlying idea.

The Future of Work- and of management

Javier Cabrerizo: The Future of Work

After my previous post on the future of work I realized about the following: in a few days I've come across the special report from Business Week "The Future of Work" , a new book from two McKinsey researchers under the title "Mobilizing Minds: Creating wealth from talent in the 21st century organization", and the Management Innovation Lab where a friend of mine acts as the executive director.

Obviously the theme of managing talent has been popular for a while but now it's becoming even more popular. And more serious research is being thrown into it, which is something to celebrate.

Based on experience in managing highly talented teams internationally I've come to one basic conclusion:

Employees are more committed and show less turnover or attrition rates when they feel the company is investing in their "employability". This is counter-intuitive but crucial: the more a company invests in employees (trainings, soft skills development, ...) the more value the employee perceives in staying with the company.

Now if you're managing a team of highly educated professionals, are you the type of person that's afraid of investing in developing their skills and capabilities because they may leave? Or are you the type of manager who understands that, in reality, that's precisely the only way to retain them?

I expect to see these ideas developed with the new research that is being conducted about the topic and I hope it will help change the mentality of obsolete managers that are just too abundant.

The Future of Work

BusinessWeek Online: BW Magazine

I just came across this set of articles from Business Week about The Future of Work. In essence it explores the combination of globalization and technology and their impact in our work, today and in the future.

One of the most interesting articles analyzes the economic conditions of educated workers in America. And here are some intriguing conclusions:
- When adjusted for inflation, the real wages and salaries of U.S. workers with at least a bachelor's degree are barely higher than they were in 2000
- The wage stagnation, combined with the 60% rise in college tuitions since 2000, seems to be discouraging many young Americans from getting a college education. The percentage of 25- 29-year-olds with at least a bachelor's degree has actually fallen during this decade
- Employers are hiring workers with higher and higher levels of education, and jobs are demanding ever more sophistication. According to the Bureau of Labor Statistics, 34% of adult workers in the U.S. now have a bachelor's degree or better, up from 29% 10 years ago

In essence, employers are hiring educated people, but the salaries for those employees are not growing. I don't have the data at hand for Europe, but one would guess that the same can happen. Is this a consequence of what we call "the knowledge economy"?

I guess the answer is yes: as educated workers can be found in other places at lower cost, and they can be employed without negatively affecting efficiency and effectiveness, the impact for US and Europeans educated workers is lower salaries. The competition that glboalization brings is driving up prices in a wide range of commodities; but the one thing that is not rising is the cost of labor. The middle class in developed regions are paying high cost for globalization.

This reminder comes very timely as these days we're living the negative spiral in the financial markets of the subprime mortgages. Middle clases with lower salaries are spending more than ever (less than 1% of net income in the US)

So what's the strategy: either move upper in the knowledge chain or create a niche for yourself where you can leverage the local touch.