MySensei Weekly
Next-Gen Entrepreneurs: S1 Strategies for Tomorrow's Transformative Era Ep.4 The Evolution of Work in the Next Three Years Cont.
Welcome to MySensei, the podcast for entrepreneurs and founder led businesses looking to navigate the dynamic business landscape. If you're new here, I'm your host, Denise Creisson, and I'm joined by Ravi Ranganathan from Chennai. And today we are continuing the topic of navigating the future, the evolution of work in the next three years. Ravi, welcome to the show. Thank you, Denise We're going to jump into our first question, which is what skills will be most valuable. So I've been looking at some of the data and they've been talking about things like, increased remote work, the rise of the gig economy, which we touched on actually in the podcast last week, and a greater focus on employee well being and flexibility. It also does mention the automation and also artificial intelligence. We'll take remote work as such, right? I think, um, very powerful concept. Till COVID pandemic struck us, remote work was predominantly an IT phenomenon, right? So people in information technology jobs were there working remotely because they already had this system of client sitting in North America, a service delivery team sitting in Asia, and solutions being shared across the globe. And technology was enabling it. Virtual working was already in place, right? So people would virtually work in environments. They'll create virtual rooms and information was shared, creation solutions were created. Now, what happened after that in COVID time is people realized that you could do remote work across industries. It's not only information technology. For instance two particular domains, which caught onto this bandwagon very early was financial services, right? Financial services today, so much of financial advisory, banking, your remittances, your transactional work with financial markets happens through remote channels, right? So much of remote work is happening in that space. Another space that happened pretty rapidly I would say is Education, right? Suddenly you were able to realize that education can be done from remote locations which was very difficult. I don't think we should go to that space. And a lot of people reverted back to a brick and mortar classroom instruction and environment. But today the youth want a mix of both, the schools and education institutions have to grapple with this. They are scared because the very strength of institution is built on the building and the classroom and the environment that the education institution provides, they might become irrelevant. So these people are holding on to it in a big way. The younger generation is not, they find the entire school education, college education not so great and they're finding it difficult to go through with that. But yeah. So that's a big change happening there, but remote is definitely going to redefine education. Remote has already redefined financial industry. Remote has already looked at information technology in a big way. Another space which again it's a big challenge because you have the legacy leaders who are fighting the new era service providers, which is healthcare. I'm told that there are huge amount of virtual surgeries that are being enabled where low level healthcare providers, doctors do surgical procedures, assisted by senior surgeons across the world. There are nursing staff, there are, first response workers who move into remote locations and so people using technology. There are devices that monitor people's cardiac functions, stroke, their blood pressure and so on and so forth, and advise them on how to be safe and healthy. So remote work is coming into healthcare. But I still feel there's a legacy team which is resisting the whole change and it's going to be a big battle. How healthcare pans out similar to what education business is and I think another space remote is very interestingly work. And I hear this very often now, is foods and beverages, right? You might've heard of this word cloud kitchen, right? Cloud kitchen has become so popular now. People cook it in one place and they just serve it across various restaurants or eateries. It's a kind of a hybrid remote space, right? So earlier, cooking used to happen in one space. Today it's happening in one space and spread across large location. There were a lot of IT people who came out of IT and they started these cloud kitchens with deliveries happening. The gig economy is another thing that we can relate to this. Foods and beverages business is also transformed. Remote work today interestingly is percolated down to manufacturing. So earlier you used to come to a factory to mass produce things. Earlier you used to come to a factory to produce automobiles. Today there are people who are saying, we can micro produce things in local locations so we can get all the parts and assemble it here and deliver the product to the customer. In a way, the remote location is becoming a very common thing across industry. It's going to become even more common. And I think it's a new way that people have to embrace. So it's not I'm in an industry where remote will not work. So I can't think of any industry today which can say that remote does not apply to me. It's there, it's coming, and as entrepreneurs, we have to see how to make it happen. I agree with you on that. And I think for those organizations that are may be resistant to that change, it is going to be something that they are either going to start to learn how to adapt to it now, in the comfort of having the time to do it before they're actually forced to. There's definitely a cultural shift where we are moving towards that, whether it's push and pull factors. So for example talent is actually demanding to have more remote working environments. So that might be a push factor where they're forced to actually adopt this because if they want to get the people that they want to have working for them and the talent, then they are going to have to create the right environments that will be able to attract them. Especially now that we have a war on talent. The other question was on employee well being and also flexibility. So powerful, you know that's I was with HR teams for almost a decade and I was in learning and development and I worked closely with HR teams. Earlier HR or human resources management or human resources development was driven around recruitment and placement and compensation mapping. So it was predominantly driven by these things, how do I get the people, and how do I get them the right salary and how do I keep them in the job? It is to a large extent, even today, that is what is driven from HR perspective. But then I think there is a big role where the newer, younger startups are going to look at employee well being and overall development of their employees as part of their growth strategy, right? There are a few startups and even large companies like Google, for instance, for a very long time, the last two years would be something of a challenge for many Google employees, but the last decade or so Google was an amazing place to work. And, it was pet friendly, you had food on the counters, you had phenomenal workspaces, you could play sports there. You had so much of wellbeing, focus in Google. But today it's changed. When their leaders had no pressure, it was like, let's have fun and we can do whatever we want. And the minute they had little pressure, they're firing people, they're threatening their employees, and all kinds of funny things are happening there. So it's a difficult game to play. Nvidia, I'm told it's a very performance driven work culture. One of the things that NVIDIA is very proud of is that they never lay off employees. Today, job security is such a big issue with so many people and they are in this constant fear of losing their jobs. And that's going to put so much pressure on them when they perform and they want to be an yes man and do what the boss is asking them to do rather than come up with what is the right thing to do for the organization. They love the organization, they want the organization to do well, but the stress that they go through makes them do things which might not be the right thing for the organization. NVIDIA is a great example of one of the things that worked extremely well, which is the way they have assured the employees that you will not be fired which is so powerful. And there've been so many cases of people who have left very large organizations and built great organizations of their own. Finding the right talent and giving them the space to perform is going to be a big challenge. Don't know many people in their growth story, they forget the people, right? And some of the organizations that I've come across in India, there's one organization called Freshworks. A small organization, rapidly growing. But then they're doing phenomenally well because the people love the company and they want to do something for the company. They are making the company happen. Their CEO is driven by empowering people and enabling them and giving them the space. So there are organizations like that across the world. I still feel there's a ton of things that can be done on employee well being but it's a difficult task. It's a difficult task because every quarter you have to show numbers, your profits have to go up, your revenue has to go up you have to open up new markets, you have to innovate, bring new products. People seem to be pushed down in the hierarchy, right? You're not going to get a stock price going up. You're a good boss. Yeah, and that is definitely an area of concern. If you look up what is the goal of the firm, it's to maximize shareholder wealth. And when you look at things that are happening in the market right now, like you've mentioned Google moving from the culture that it had before, which was very staff centric to now having behavior that doesn't actually display being staff centric. IBM is letting go of 50% of its workforce, and when they announced it, there was a significant surge in their stock prices. And, when you look at things like that, and it's not just IBM, not just tech companies, you've also got Nike, Tesla, Citigroup, eBay are also on the same path of letting people go. It definitely has changed. I saw a study recently where 40% of corporate leaders had said that they were anticipating similar reductions in their organizations in 2024. They didn't say in the future, they said in 2024. So it's clear that the future of work is really changing rapidly. Potentially we are moving away from the wage earning jobs towards becoming people that are self employed and working for ourselves. I can definitely see how that is actually going to be one of the major shifts that we are going to be seeing in the next few years, especially with researchers on AI predicting, and I hate actually like talking about these numbers, but they definitely saying that within two to five years, majority of people are all going to lose their jobs. Relating to growth of organizations so typically when the company is at the startup stage, they are financially under a lot of stress and they don't know what's going to happen tomorrow, the entrepreneur is literally running 24 hours a day. Every employee feels it's their life in that company and they're so passionate about whatever they're doing. So the small group of people work very hard with very limited resources and make a wonderful thing happen and the startup suddenly becomes a growing organization. This very small team which is so cramped for resources, expands rampantly without understanding why you need so much of staff, right? Instead of having say 0. 5 or 0. 6x staff requirement, you now go to 3x, right? Your staffing goes to 3x, three times what you require to run the company because now you're flushed with funds, you're growing rapidly, your customers are growing, right? You're anticipating new business to come in. You don't want to be short of talent and you pick up whoever is coming your way. You take the best talent, pay the biggest salaries and you grow phenomenally well and you hire left and center. So you're going at 3x, and then you reach a maturity cycle, right? So you drop down to 1.5x where you're not growing at, 20%, 30 per annum. Your profits are not going up. You don't have major new products coming into the market. You're stable. Your customers are aware of what you can deliver and they're coming back to you because they like your products, your service. So you're now at 1.5x of your requirement. Suddenly the decline phase comes up on your radar, right? So again, from 1.5, you dropped up to 0.5. Instead of keeping that 1% at least, or 1.5% stable, the maturity cycle going longer, but many companies especially for people who are driven by financials in an organization, the first thing they cut is people. There was a study, I'm not sure, I don't remember the exact study, but we can Google it where they were mapping how people were hired and talent was retained and managed within the organization in different phases of the growth of the organization. At the decline phase those few companies who retained staff had a longer maturity cycle, right? So they didn't decline that rapidly. People who moved to this 0.5 resources, they were dying left and center. People should realize this. We should also realize that we were brazen in our talent acquisition when we are in the growth phase. Again, people in HR should be cognizant of this and should play this the right way, in my opinion. Ravi, I don't think it's just HR. So normally you might have a disconnect like in senior leadership teams where they don't understand the consequences of different actions and decisions that are made in business. I have an accountancy background but I pivoted and moved into HR and I was able to see some of the decisions that I made when I was just finance, especially around staff. Usually when companies are looking to claw back on cost, one of the first things, like you said, is that they'll get rid of contractors, get rid of temp workers, and then go through like a couple of redundancy rounds, but then you compromise your ability of being able to execute on the deliverables that you actually have. You compromise on the quality of them, you compromise on the time to completion as well, which then will tie into reputation and reputational damage. And I actually think that it's important for example for HR leaders to understand finance and for finance leaders to also understand HR. Yeah, exactly because the finance people have to make the decision because there's a business requirement to make that decision, right? They have to manage cash runways, there's only certain things that can be done. But the communication is key. And if you don't understand what is being communicated, if there's a disconnect there, you won't understand the level of risk associated with whatever decision that you're actually making, so you don't mitigate for that risk. So for example, yesterday we were having a conversation on project management, right? And we're talking about how there are tools, for example, resource utilization. That's something that HR can actually use because when you're looking at the optimal resources and you had mentioned companies being flash with cash when they go for an investment round and they first get their first injection of cash, and then they just want to recruit as many people as possible anticipating that it will result in growth. But, you've also got to consider what is the optimum level of resourcing you need based on the known projects that your company actually has, the known deliverables that your company actually has and understanding how much idle time you're paying for. So you had talked about companies like hiring people to also ensure that in times that they may need to have certain skillsets, I understand, there's certain skillsets that are scarce and difficult to come by and you want to be able to secure having them in house for you to be able to explore and exploit opportunities, but it's also important to understand what is the percentage of idle time that your company is actually paying for. And through using resource utilization formulas you can actually identify that because it tells you, is it your idle time is like 40% that's an inefficient use of funds. Unless it's something that is going to change in the foreseeable future in the next kind of like month cycle, couple of months cycle a project is going to be coming in so that utilization or idle time percentage will change very quickly. But when you are just holding on to talent for holding on sake, and you're going into three months, into six months, into one year, it doesn't make sense. It's all about having open conversations also, like you've spoken about the financial part of it, I'm also talking about the human part of it, where if you know that you're not going to utilize the resource in the next cycle when the talent environment comes up, it's better to inform the talent that understand that this is the current situation, we are not utilizing you 100%, you're probably at 20% of your utilization, but we are not willing to let you go. So you're a good resource. If you have good opportunities, explore them, we are willing to support you. But remember that we are always supportive of you and we didn't let you go when we really didn't use you, we are not just driven by financials, we are also driven by your human understanding. We are willing to support you in your transition. And if you want to, we would like to have you back because we see an opportunity coming in the future. We'll pull you back. I'll give you an example, there was this very large European company which was into cloud support. In 2020 when a lot of work was dropping, pandemic was across the world, a lot of issues happened, they downsized rapidly. They downsized to an extent where they were almost 50% of their cloud infrastructure support staff, right? Come 2022, they were overwhelmed with business rebound on cloud, they didn't expect this volume of business migrating into cloud and cloud services became through the roof. So every resource they were paying, say say$40,000 or$30,000. Now they had to pay$60,000,$70,000, double what they were paying earlier. And they were not getting the same experience staff because the people who left, they understood the company's culture, the cloud companies protocols, the processes, the business integrities, the client expectations and so on. So to bring them up to speed, took them another six months. So the effective loss was almost 3x of the money they would have spent on retaining that stuff, right? And come 2023 again, the business came down, the volume started dropping and now they were saying that we can't pay you these high salaries, now we are going to let you go again. These people who left other organizations came in here and they are like now frustrated, now they are in the performing stage but now they are uncertain about their future and nobody really knows who's going to be discharged. So this kind of people management you know in the name of being financially prudent also puts a lot of pressure on people right? Ultimately we are a planet filled with human beings and we need to have a human angle to what we are doing. It's another thought that I wanted to share. I like the best of all worlds in that if you have visibility, of what is your optimal resourcing like month on month for 12 months, and I've seen a case study of this where a company was experiencing some difficulties and some challenges, and they supported staff that would have been at risk of redundancy to actually cross skill them. So they weren't actually using losing the initial talent and resource that they had. They were enabling this talent to gain another skill that was still being used in the organization. And so cross skilling is an opportunity of being able to navigate some of the fluctuations that we might have in business cause they're going to happen all the time. Future trends are very hard to predict because we often map them based on the present and we can't do that. There's many factors that are impacting the changes that are happening right now. But if you can mitigate some of those risks, mitigate for some of those fluctuations that you might actually have in terms of the labor and the skill sets and even emerging skills that you might need in your organization to undertake business that you want to do, then cross skilling is a great way of ensuring that you maintain core skills, you are training and professionally developing your staff with emerging skills. skills as well, and you will then always have your core staff as and when you need them. I know you say we shouldn't look at it from a cash point of view and yes, you're absolutely right, we shouldn't be looking at as that, but I just want to say that H. R. understanding finance and just having a head for numbers will be really great for them to actually see that utilization and that idle time so they can identify within their organization to see what percentage they need to be working with to cross skill, not to actually get rid of them, but to maybe cross skills so that they can sit in other functions. Okay Ravi, I think that's a good place for us to end the podcast for today and we'll continue the conversation in future segments. For anyone that is looking for other resources please do check out www.mysenseihub.Com and we would love to have you back joining us on future conversations. Ravi, thank you for today until next time. Thank you.