Johnny C. Taylor Jr. is the CEO and President of Society for Human Resource Management. He says this is a time for organizations to get their human resources in order. Leaders have learned from the crisis how crucial it is to identify and mobilize talent, and to evaluate and adapt to employee needs. He discusses research on several trends that are expected to accelerate, such as hybrid and contract work, diversity, equity and inclusion efforts, and provides guidance for leaders around the globe who want to determine what the new norm should look like within their organizations. Taylor is also the author of Reset: A Leaders' Guide to Work in an Age Of Upheaval.
ALISON BEARD: The HBR IdeaCast is a Harvard Business Review publication. Im Alison Beard.
We have been looking at how work has changed since the pandemic. What can or should be done to make it better in the future? We call it Back to Work, Better.
Leaders are now balancing short-term crises response with long-term business decisions. Individuals are also reevaluating what they desire from their careers. This could be a significant turning point for both organizations and employees.
Johnny C. Taylor Jr., who has been thinking a lot lately about these changes and how post-Covid workplaces will look and how good management will be like after many years in corporate leadership roles, is the CEO and President of the Society for Human Resource Management. He has analyzed research over the past decades to identify trends and best practices for the future. He is also the author of Reset: A Leaders' Guide to Working in an Age of Upheaval. Johnny, thank you so much for being on the show with me.
JOHNNY TAYLOR : I am grateful for your time.
ALISON BEARD : I would like to begin with your view of the current moment. Is this the right time to reinvent our work methods?
JOHNNY TAYLOR: It's been a while since we thought seriously about work, workers and the workplace. Over the past several decades, different countries have used different approaches to incrementally improve and redefine these three areas. What is work? What is work? So, who are the workers, contractors, employees, and so on? What is the workplace?
The pandemic was a blessing for us. I deliberately used the word fortunately in my sentence. We all had to stop, pause and reflect on the pandemic. Employers, talent, and people alike were forced to do so. It's a reset.
ALISON BEARD (Yes). Do you think there have been times in the past when big crises led to positive changes at work?
JOHNNY TAYLOR : Not significantly. It's funny. We have made incremental changes all over the world to the workplace and the notion of work. For example, we have made it possible to offer leave in certain parts of the globe. Some are unpaid and some are paid. We have introduced continuous learning. We are now shifting from seeing employees' learning and development as an expense to be considered an investment and not a cost. These changes have been made. We have made these changes, both legally and practice-wise. But, we aren't stopping the world.
If you asked any company in pre-pandemic whether they operate in Europe, Asia or the U.S., the answer would be, "No, we can't shut down the workplace overnight and still run our business." All of them would have said "No, we need to hire all kinds of consultants and it will take us two years to figure this out." Next, we need to create a communication plan. You mean everything. It was something we were forced to do, for a period of time.
ALISON BEARD, Yes. It's fun to look back.
JOHNNY TAYLOR : It was 21 days, as we all thought.
ALISON BEARD, right. This crisis seems to have prompted people to not only rethink their work and career paths, but also to take action on these thoughts. This seems to be a great moment of resignation in the US.
JOHNNY TAYLOR : Yes.
ALISON BEARD: What should employers do about this?
JOHNNY TAYLOR: It's complicated. Employers need to think hard about what they can do to attract people and make them more attractive from a career standpoint. Pre-COVID I traveled 70% for work.
Then I had this moment. When people refer to COVID clarity it really does. Even as CEO of a significant company, I had that moment when I thought, Wow. Do I have to be there every day from 9:00 to 5:00 on Monday through Friday?
ALISON BEARD: No. No one does.
JOHNNY TAYLOR : Right, right.
ALISON BEARD - No, except if you are an essential worker in hospital or pilot.
JOHNNY TAYLOR : Yes. Yes. All of this began. Some employers have said, "Everyone can work remotely." You can work from wherever you are. Our employees are making decisions right now about how they want their work day to look. This is why I love it. Right in front of our eyes, the social contract is being renegotiated.
ALISON BEARD - What advice would you offer leaders who are overwhelmed by the task of making the right decisions now and in the future, given all the shifting dynamics?
JOHNNY TAYLOR - Their default space, where it is necessary for them to begin, is a discussion about culture. Because they'll call me Johnny, should vaccines be mandated? Do we need to mandate that people work for a set number of days? What is the right number? They asked me a lot of questions and I told them to stop jumping into the activity. Let's take a step back and think about what you want to be. Who are you Mr. or Mrs. CEO and your executive team? Which type of employees would you like to retain and attract?
What is your employer brand? What is your employer brand? And, more importantly, how do you want it to look in the future? Those kinds of decisions will lead to the natural flow of policies and practices. They also heard me tell them that there is no good or bad culture. Let me clarify. Let me be clear.
I'm not saying that it doesn't work for Jack Dorsey on Square or Twitter. It may have worked for Ginni Rometty as a CEO at IBM. And it may not work, for whomever? Every organization must start by asking Who are we? Make decisions about your policies and practices.
ALISON BEARD (Yes, that's right. Things like remote work and flexibility, which everyone is talking about, are very different for a tech company or financial services firm than they are for a hospital.
JOHNNY TAYLOR : However, even within a particular sector, as you can see, United Airlines announced they would mandate vaccination. American and Delta said no, because they believe that culturally they hold different values. They could be saying that our culture encourages people to make their own decisions. While safety is important, we will make every effort to let the individual decide how they work. It is their decision to inject what into their bodies. They have to ensure that our customers and employees are safe.
United, on the other side, I might imagine, says, Yes. Safety first is what we always preach. Safety, safety and safety are our mantras. We will eliminate all hazards from the workplace. There are many cultural norms within the airline industry and different ways of providing the workplace they desire. This is my point. We all want the shortcut. Which companies are the best to work for? What are the best places to work? What's Silicon Valley doing? As leaders, we must be open and honest with ourselves, engage introspection, ask questions, and then say: Who are we? What are we looking for? What type of people would we like to attract?
For example, there are people who just want to go to work every single day. Some of my colleagues say to me, "Listen." I believe Im more successful at work. It is not something I have the ability to do. It is possible to decide that you want to hire 5,000 people. This doesn't necessarily mean that your culture is bad. It simply means that it is not right for people who don't value this and who don't want to work in that way.
ALISON BEARD : Does it sound like there will be a lot more movement and workers moving to work for companies that are better suited to their culture?
JOHNNY Taylor: Yes. It's amazing, think about it. It takes 8-10 hours per day to work. You spend a lot your life at work. Employees have the right to feel fulfilled at work, I tell them.
ALISON BEARD
JOHNNY TAYLOR - There are arguments on both ends, and this will sound like my lawyer side.
ALISON BEARD : Yes. It was my mistake to forget that you also went to law school.
JOHNNY TAYLOR: It's interesting. If the company isn't financially healthy, then I can't guarantee you a job. There is a risk in providing employees with everything they need, which can lead to a business that is not financially viable. No one has a job.
In my earlier years of my career, I was an employment and labor lawyer. When I am involved in contract negotiations with unions, one of my first words to them is "Be careful what you are negotiating for." If I give you everything, then there will be fewer of us, point blank. Because I need to make money. My client is in business to make money. This is the deal.
In many organizations, employees are the biggest expense item in your budget. It is fair for employers to say that they can't give everything. Employees, on the other side, I understand it. I get it. As an employee, I know what you were saying to your employees. You can't be a CEO without having bad days. All of us have bosses. I have a board. You have to ask yourself, Do I have more good days than bad? If so, you should take this entire work experience.
ALISON BEARD - What do you think of the push for unionization for warehouse workers at Amazon? Do you see this trend continuing?
JOHNNY TAYLOR : Yes.
ALISON BEARD - Do you believe they will succeed?
JOHNNY TAYLOR: It will be fascinating to see if employers think, You don't need a third party to get between me, my employee, and you. You, Mr. You, Mr. or Ms.
Employers have said that they are not going to wait for a third party to demand things from me. Let me do it now. Let me take action, not wait for the federal government to pass these policies or laws. It is not required by law. The U.S. does not allow it. It is being promoted in some states and cities. It is not paid, however. It's just good business. Why not get involved? It's smart human resource, so I will do it.
ALISON BEARD - The relationship between employee and employer in the United States is a unique one. Are you referring to America as a place where people seek out best workplace practices, or as something that more Europeans look at and think, "Wow, they are really getting it wrong!"
JOHNNY Taylor: SHRM is a global organization with members in 165 countries. We get an interesting perspective from all over the world. Listen. All of the world, particularly the capitalist one, models America. There are some things we do well and others we could improve upon. There is room for improvement in workplace policy. We are looking. We look at the rest of the globe when we think about apprenticeships. This is because we have not fully embraced it. Particularly when we look at social mobility, we have not done it particularly well. People would still agree that the U.S. model remains the best. Despite its imperfections, I am happy to see that America is beginning to look at the rest of the globe and learn from other countries.
ALISON BEARD : Did you suggest that certain policies might require a government push in the form updated legislation?
JOHNNY TAYLOR (Yes) No question. Paid time off is a top priority for me. We have changed the definition of overtime and the traditional 40-hour workweek. There are many things we could learn from the rest. We need to reexamine many things.
ALISON BEARD : Let's look at the HR function of talent management and what has changed. In the book you talked a lot about innovation. Talent managers must not only hire innovative people to fill other roles in the company but also be innovators themselves.
JOHNNY TAYLOR: There are three areas. The first is how we recruit people. Talent has always been about technical skills and competency. I want the best qualified person. We know this. The degree is no longer a good proxy for intelligence. That was how we did it for decades. We need to think differently in order to innovate in the talent acquisition industry. We are now looking at credentials that can be stacked. Lifelong learning is what we are referring to. This is a completely different profile of what a successful candidate might look like.
SHRM recently conducted some research and now we discuss what successful talent looks like. What are these characteristics? The list does not include the top performers in your class. It's creativity, adaptability and the ability to work well with other people and teams. These are the most important things, so it's crucial to invent. How can you measure this? How can you evaluate for these newly valued talents?
Let's now move on to the next step: what should you do with them once they become your employees? How can you keep them? Compensation and rewards are two areas where we need to be very creative. There is a base salary and a bonus. The 401(k) in the U.S. has been criticized. We now believe that we need to be more creative and innovative. We need to find ways to motivate people and reward them in ways that aren't necessarily linear.
We will assess the marquee player differently from the backup. We are just willing to pay different. Our model for compensation and rewards is based on equality. There's a bit of pop for those who are truly exceptional, but not enough differentiation.
ALISON BEARD : Is that fully transparent?
JOHNNY TAYLOR : It must be.
ALISON BEARD - Would you believe that the person sitting next to you was earning twice your salary?
JOHNNY TAYLOR : That was my third point. Focus on transparency. I'm happy to provide transparency if you desire it. It is up to you to manage it. It is a great thing for everyone, but we will also have to deal employees who claim they want transparency but, in reality, struggle to do so.
ALISON BEARD - You must also be able, just like your employer, to justify pay disparities.
JOHNNY TAYLOR - It happens every day in sports.
ALISON BEARD - As long as the metrics are clear and the system is free from bias, it can work theoretically.
JOHNNY TAYLOR: Let's talk about it. It is impossible to eliminate all bias from any system. We can eliminate some of it but not all of it. Performance is subjective. It is important to be open with people. Assessments are subjective in nature. Interviewing is one example of how we know this. Many people decide whether they like someone within the first five minutes.
As human resources and talent managers, we can do our best to ensure that this is not based on their race, gender, age, or any other factors. The reality is that whether I like someone in the interview process matters if Im the hiring manger. We have to be open with people and say, "Yeah, and that's the H in Human." Human resources. This is H. Human beings operate in this way. Do we intend to reduce bias, as I mentioned? We can reduce bias, but it is important to recognize that hiring decisions will still be biased. Even with all the AI and machine learning and everything else, there is still bias. Although there is no perfect way, it's better than the ones we have seen in the past 20, 30, 40 years. This is a process, an evolutionary process.
ALISON BEARD - If it is transparent and you see a pattern, you can address it.
JOHNNY TAYLOR : Yes. That's right.
ALISON BEARD - Let's also discuss the major push for diversity, equity and inclusion that many companies are making, especially considering the recent racial reckoning in the U.S. How can organizations do better work, especially in a highly competitive market for such employees?
JOHNNY TAYLOR: Yes. It's a great idea. Let me add. These children are now behind because of the tight market.
While we believe there is a tight talent market in Black and Brown communities, I can tell you what it will look like in 10 years. An eighth grader who misses those crucial eighth, ninth and possibly 10th grade years or has sub-optimal remote education, may not be able to compete in future years. This is a serious problem, and HR is trying to influence policy makers to tell them, "Weve got to do something so that these people, large numbers of our community, get up-to-speed on education or we'll have a problem." There is already a skills gap. The pandemic is causing it to worsen.
Fast forward to the employer. We all are committed and I am very happy about the two years of racial reckoning. Before that, while we were all focusing on Me Too in 2017-2018, we looked at gender and made great progress. The pandemic strikes, and much of our progress on gender, race, and ethnicity is lost. Did you know that women made up the majority of the American workforce pre-pandemic? Literally, in just two to three months, 2 million women were out of the U.S. workforce.
Even though all of this progress is being made at a time when people are talking about equity, diversity, and inclusion, there are larger macro-pressures that threaten to undo a lot the hard work and accomplishments we have made. This is partly why many of us are awake at night, even though we are better than that. And this isn't just a U.S. problem. Globally, we're better than this. This scares me as well as employers around the world. They want to do right, but ultimately they must hire people who are capable of doing their job.
Employer side: We have to go beyond the four walls of our companies and reach out into the communities where children are negatively affected. They will be your future workers. These children should have opportunities to shadow, do vocational experiences and apprenticeships. Our country has a serious problem with low labor participation rates. We can't afford to lower it.
Employers will need to be extremely thoughtful about labor planning. It is not going to be a 12-month plan. Employers will need to think long-term, be strategic and work closely with higher education institutions, community college, four-year universities and other organizations. Also, we will need to think differently about talent and how we are going to nurture it because it is in our best interests.
ALISON BEARD (Yes, you mentioned nationality, the country of origin. This stoppage in international travel has surely impacted so many global corporations talent development programs, right?
JOHNNY TAYLOR : You are right. No. Right? One thing we didn't think about is that remote work can be accepted and embraced by everyone. We can actually solve some of our talent problems, not only in recruiting in the U.S. and Europe. Our talent can be found wherever it is.
It's hilarious. Recently, I was discussing this with our employees. One employee stated to me that he needed to be able work remotely. I know that I can do my job anywhere. Or, better yet, that you see it from our point of view. This means that I can get your talent anywhere, which means that I can get it elsewhere on the planet for a fraction of the cost.
Just in time as you need it. This doesn't require a full-time employee. The gig worker community has exploded. So I warned you: Be cautious. You remind me more often that I don't need to be in the office and that it is not worth interacting with my colleagues and creating an esprit de corps and collaboration, and innovating. I might hire you if your job is truly one of independent contractors or independent contributors who can work anywhere in this world.
You are right? Right?
ALISON BEARD : Yes, exactly. So, as we move to a gig-contract-led workforce, how can companies think about HR? How does it change if you manage a remote pool of contractors instead of a group that comes to the headquarters daily?
JOHNNY TAYLOR: Yes. Your combined workforce is a term we use often now. This could include people who are contracted for a long time. You can also include employees of another company who provide a specific service. Microsoft is my favorite. Around 40% of their workforce is not on their payroll. They could have more than 120,000 employees but 50,000 of them would not be considered their employees in the traditional sense. Employers and employees alike will need to reexamine the idea that the future work may be performed by different types of employees.
We used to talk about labor planning in the past. SHRM has a new term for labor planning. The real problem is not the planning of the labor. A hiring manager will want to know how their work will be done. They don't care if it is done by a machine. They don't care if it is done by a contractor. They don't care. They are just employees. They want to do their job.
ALISON BEARD - So, if I want to complete this project, I will need one manager, two employees in-house, two robots and four contractors.
JOHNNY TAYLOR : Precisely.
ALISON BEARD : Yes. Okay. Okay.
JOHNNY TAYLOR: You mentioned this earlier. The idea that you have to put to rest everything you thought you knew about talent, people and human resources, culture, etc. before March 2020. It was a major reset for us. This was not a pause. This is the problem. Many people said "Okay." Pause. We're going to continue where we left off. We have to start over from a practitioner's perspective. Your workplace should be re-invented with the idea that it should not only be a 21st century workplace but also a modern workplace.
To all my HR colleagues, I have said this: Go back to your handbook and rethink. Rethink your culture. Ask yourself these questions, and then look at your culture objectively. It would be sad to return to pre-pandemic conditions.
ALISON BEARD : Let's shake things up.
JOHNNY TAYLOR : Yes.
ALISON BEARD : Johnny, thank you so much for joining us today.
JOHNNY TAYLOR : I appreciate your kind words, be well.
ALISON BEARD - That's Johnny C. Taylor Jr., the CEO and president at the Society for Human Resource Management. He is also the author of Reset: A Leaders Guide for Work in an Age Of Upheaval.
Don't miss our Back to Work, Better series. You can listen to the episodes about how to create hybrid teams and how to refocus and find your purpose. You can find them on Apple, Spotify, wherever you listen to podcasts, and at HBR.org.
Mary Dooe produced this episode. Rob Eckhardt provides technical support. Adam Buccholz manages our audio products. Thank you for listening to HBR IdeaCast.
