In this episode of Your Work Friends, Francesca and Mel dive into the long-term impacts of corporate layoffs and the crucial role of trust in AI adoption. They discuss recent research revealing how layoffs can damage employee morale, engagement, and company recovery for up to 24 months.
We also explore Fortune's findings on how top European companies are building trust to facilitate AI integration, highlighting the importance of fair compensation, talent mobility, and transparent communication.
With real-world examples from Spotify, Stellantis, and Salesforce, this episode offers valuable insights for both employees and leaders navigating today's rapidly changing workplace landscape.
Tune in for a mix of expert analysis, practical advice, ah-has and ha-has as Francesca and Mel break down these critical workplace trends.
We referenced:
- The Long-Term Costs of Layoffs - HBR
- Cutting Too Much: When HR needs to pump the brakes on layoffs
- Companies that announced major layoffs and hiring freezes - Intellizence
- Public WARN tracker
- The Best 100 Companies - Fortune
Disclaimer: This podcast is for informational purposes only and should not be considered professional advice. We are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. The views expressed in this podcast may not be those of the host or the management.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Mel (00:00):
Company recovery time post layoff is now 18 to 24 months.
It used to be six to 12 months,18 to 24 months.
That's only if you hire newemployees to backfill those
essential roles, because thepeople who are staying, the
magic's gone.
How was your weekend?
Francesca (00:32):
Good, my mother-in-law's here and she's
lovely, and so we've been goingaround doing fall things, farm
things.
Mel (00:39):
Oh yeah, what kind of farm things.
Francesca (00:41):
We went to a place called Topaz Farms, which is in
a place called Savvy Island,like right outside of Portland.
This place is just perfectlydesigned for people that live in
Portland but want a farmexperience that feels authentic
and also sells things like $12Frose.
(01:01):
You know I'm a big fan Someonein love with a massive
pot-bellied pig that I secretlywant to take every time I go
there.
Anything fun happen for youthis weekend.
Mel (01:11):
Yeah, For folks who don't know, I'm a huge New Kids on the
Block fan still, and I met upwith a friend who I met on the
cruise a few years ago and wewent to see Drag the Musical
Wait can.
Francesca (01:24):
I just stop your story right now.
Yeah, just real quick.
You said the cruise as in.
Everybody's gonna know whatsaid cruise is.
Can you explain on?
Mel (01:32):
the new kids on the block cruise years ago.
Which was amazing was a delayed40th birthday joint 40th
birthday celebration that gotshut down from covid in 2020.
So it was a do-over and it wassuch a fun experience.
Highly recommend it for folkswho just want to dance party for
four days straight.
So, yeah, we went to drag themusical Joey McIntyre's in it.
(01:55):
So that's the new kidsconnection.
We were like, oh, let's go seethe show and, bonus, we get to
see him.
So it was just phenomenal.
Highly recommend it for anyonelooking for something really fun
.
Francesca (02:07):
If you love broadway, go check out this show yeah, I
imagine that's got to be just afun show joyful and so uplifting
and such a positive story andjust such goodness throughout.
Mel (02:20):
I don't think I stopped cheesing from start to finish.
It's just that entertaining, sogo see it, go see it all right,
good, and it's in new york city.
It's off, like off broadway oron broadway yes, new world stage
, amazing, amazing cast and crewand the whole thing was just
fun.
So, if you're in the area.
Francesca (02:43):
Check it out.
Portland doesn't have that muchof a theater scene.
I shouldn't say that before Iget a ton of hate.
I'm not familiar with thePortland.
Mel (02:50):
There's a difference.
Francesca (02:52):
Jeff's mom loves theater and so.
Jeff took her to Sweeney Todd.
Mel (02:58):
Oh yeah, I love Sweeney Todd.
Do you really it's so dark?
Francesca (03:03):
Yeah, my sister is into musical theater, so I grew
up going to a bunch of theater.
I hate to tell you this.
I hate going to musicals andplays.
I feel like you would like themusical I went to, though I do
like some musicals, like I loved.
Hair Rent was okay.
We went to Cats on Broadwaywhen I was in high school.
I fell asleep in the theater.
Mel (03:24):
I just can't get over.
You just said rents Okay.
Francesca (03:27):
Rent.
Mel (03:28):
I don't know what's wrong with you Like.
Francesca (03:30):
Miss Saigon.
Les Mis is so fucking long, I'mjust like I'm going to wrap
this up.
Mel (03:34):
Yeah, this is long.
You know what was really reallyfun?
Say it Legally Blonde.
Francesca (03:42):
See I Legally Blonde was awesome.
I think I would get into thatBook of Mormon, one of my
favorites.
Mel (03:49):
I think I like things that are funny or just really well
done, I don't know when you cometo New York, we'll have to go
back, because I will 100% goback to this show 80 times.
Francesca (03:58):
Yes, the way you explain it, that I would go to,
I can't do the melodramatic shit.
I'm sorry I'm surrounded bypeople who melodramatic shit.
I'm sorry, I know I and I'msurrounded by people who love
musicals and I'm just like enjoy.
Back with new week, newheadlines.
Mel, I have no idea what you'retalking about.
We're surprising each other.
So what are you talking abouttoday?
Mel (04:18):
Oh, I hate to even start with this one because I feel
like now it's just an oldie,that's an oldie and it keeps
coming back up.
Hbr just did a research articletalking about the long-term
costs of layoffs and I also readan article in HR Executive also
talking about the dangers ofthe long-term costs of layoffs
(04:39):
for business and HRprofessionals.
Francesca (04:42):
I'm going to talk about that.
I'm very curious.
I'm very curious.
I'm very curious.
Fortune Magazine came out withan article this week.
At 100 best companies in Europe, high levels of trust set the
stage for AI, and theyinterviewed over 26,000 people
and figured out that there's acouple things that really set
the groundwork for AI.
If you have them, fantastic.
(05:03):
If you don't, no bueno.
So I want to talk about that,and I also have two F yes
stories that dropped that.
I want to jam about F yeah Allright, let's do it.
Mel (05:17):
Let's start with the F yeah .
We need some good F yeah news.
Francesca (05:20):
Okay, Now we like to get our news sources from a
variety of different places.
Edm tunes that's where I'mgetting this from, but I loved
it.
Our employees are not children.
A direct quote from the CHRO ofSpotify that will keep remote
working.
Mel (05:37):
Hey, I love to hear that.
I read an article this weekabout how CEOs are saying remote
work will be gone in threeyears.
Yeah, so nice to hear thatthere's some sane companies out
there.
Francesca (05:50):
So the CHRO for Spotify, katrina Berg, just
holding the line over there atSpotify.
Totally love it.
The quote in the article is youcan't spend a lot of time
hiring grownups and then treatthem like children, she argued.
And I just love to see thisbecause all around Spotify
people are saying no, come backto the office.
People are doing selective dataaround.
(06:12):
Oh, you're more productive inthe office, even though the
majorities of studies are sayingnot necessarily or no, not at
all.
Love that they're holding theline here.
Mel (06:22):
Yeah, I do too, I will tell you.
I'm not trying to shamenecessarily, but I recently
watched a video from Workdayabout their flexible work policy
and I think a good example ofsomeone overcomplicating.
They call it the work fromalmost anywhere.
Francesca (06:40):
Okay, what I don't know when you're explaining,
you're losing.
I don't even know what the hellyou mean by that.
Mel (06:44):
So that headline is what caught my attention.
I was like what does that mean?
Because right away, as anemployee, I would be like what
does that mean?
So now I need to look up whatis this?
That's already complicatingthings, and when I listened to
the program, it is essentially aresponse to RTO and them saying
their employees who had flexwork during COVID now are being
(07:06):
required to come into the officeat least 50% of the time
because it builds collaborationand community, but so does
virtual work when you do itappropriately.
So that's whatever bullshitthing, just to call it what it
is, it's selective, it'sselective, yeah, totally
selective.
That's one of their core values.
So addressing the needs of thebusinesses, of meeting those
(07:27):
core values and other employeesfeedback because they post their
employees weekly was that theywant more flexibility, no
kidding.
So now there's this program,but this isn't a perfect example
of overcomplicating things, sokudos to you, spotify.
What they did is they createdan internal app and they call it
(07:48):
this work from almost anywhereprogram, where you have 30 days
over the year that you can useany way you'd like to work,
either from home or anotherlocation.
But now they've created an appto monitor that and you have to
put in a formal request forthese 30 days throughout the
year and how you use them foryour flex time.
Instead of just trusting youremployees.
(08:09):
We'll use that.
There's now a formal product inplace.
They created an app and I justkept thinking, listening to this
like this is not the amazingprogram you think it is.
And how many hours have beenwasted on overcomplicating
something that doesn't need tobe complicated?
Francesca (08:25):
No, it doesn't need to be complicated.
You either trust your employeesor you don't.
People are either producingwhat they need to produce or
they're not, and it's literallythat simple.
It's literally that simple.
Mel (08:36):
And if you're going to give the 30 days, why do you need to
say almost anywhere?
Then it means they can workfrom anywhere.
Yeah, and you trust they'regoing to get the job done.
Spotify, kudos to you.
Francesca (08:47):
All right, so there's Spotify my other ones.
You probably saw this floatingaround LinkedIn, but just wanted
to call it out because Iappreciate the sense of humor.
Xftx CEO's crazy LinkedInupdate starting new job as
prisoner in jail Did you seethis?
Yeah, so Economic Times, we'llpost this on our show notes.
Ryan Salameh, who is an FTXexecutive, is starting his
(09:10):
prison sentence and decided toupdate his LinkedIn profile and
I just thought that was thefunniest, freaking thing on the
face of the planet.
Mel (09:18):
I was like do you create a new banner?
That's like on hold in prison.
Francesca (09:27):
He put his position as inmate at FCI Cumberland and
I'm just here for it, I'mtotally here for it, like it's.
At least you have a sense ofhumor.
Those are my two F.
Yeah, I get those are really sofunny.
Yes, yes, so have to have asense of humor.
I'm curious these long-termimpacts of layoffs.
Mel (09:49):
I'm surprised I have all my shocked faces lately.
I am shocked.
The headline is I'm not goingto really mention anything brand
new that we haven't alreadydiscussed on this podcast for
the past year now.
We've called out these thingssince last November and Now more
of the research is catching upto essentially confirm
everything that we've talkedabout.
Francesca (10:11):
So we're like oracles .
Mel (10:12):
We're like oracles A nice friendly reminder for folks who
may have not heard earlierepisodes of your Work Friends.
Hbr came out with an articlethis past week called the
Long-Term Costs of Layoffs.
It's a research article put outby Didier Elzinga and Amy
Lavoie and it was essentiallyhighlighting the longer term
implications of layoffs andconsiderations that business
(10:33):
leaders need to take intoaccount and HR leaders Some of
the key things.
Right, you and I.
We've seen sweeping layoff news.
We get news alerts in our email.
We get listener alerts aboutlayoffs that are happening
almost daily.
I would say, in the past weekalone, we saw Amazon cutting the
14,000 jobs that you coveredjust last week.
(10:53):
Boeing is going to lay off 10%of its workforce, about 17,000
jobs.
Intel is planning to cut 15,000jobs, pwc is doing layoffs, cvs
, bayer, johnson, johnson, andthe list goes on and on.
By the way, I found somethingpretty cool during my research
there's a new warn trackerreport out there.
Francesca (11:14):
Skuza, skuza.
What do you mean?
What?
Mel (11:17):
Yeah, so you know how we talked about how most states
have a warn report.
It's not required by everystate, but a lot of states have
a warn report which, for anyonewho doesn't know what that is,
it's essentially they requireemployers to submit a warn
report, which, for anyone whodoesn't know what that is, it's
essentially they requireemployers to submit a warn
report, essentially notifyingthat layoffs are going to occur
and where, and all of that.
So there's a new warn report,tracker report that consolidates
(11:42):
every report from every stateinto one database.
Francesca (11:46):
Which is yeah, because if you're working for a
big company and they're inmultiple States, then you'll be,
you don't have to go tomultiple States site, you can
just see it in one place, oh,and it pulls it up for you, so
I'm going to link to that.
Mel (12:03):
Going to that after this bookmark that site friends and
we just covered last week, whenwe discussed the move to remove
managers and flattened orgs, theself-management approach and
long-term implications of that.
With the short-term gains onsavings, but again there's huge
long-term losses on having tocorrect these deep cuts.
So this article discussed howthe industry being hardest hit
(12:25):
right now is tech.
We know this.
Noting 100,000 rules have beencut in 2024 so far, and HBR
studied 146 companies that wentthrough layoffs between March of
2020 and November of 2022.
And what they looked at wereemployee engagement surveys
before and after layoffs, andthey also leveraged data that
(12:46):
they pulled from the layoffs FYI, which you know is the master
list of all layoffs happening.
The research shows that whilelayoffs do achieve those
short-term gains for thebusiness things like some
short-term financial benefits wetalk about this often, the
right size burn to ensurecontinued economic stability,
for example some of thosebenefits happen right, but the
(13:08):
cost of these decisions theyfound include long-term impacts
like loss of employee morale,engagement and loyalty, and they
noted that on average, afterlayoffs, company confidence
drops by 16.9%, belief in careeropportunities drop by 12.1% and
confidence in leadership dropsby 10.5%.
(13:31):
That's the average of whathappens and those are for folks
like employee engagement.
Those are like three keydetermining factors on what's
going to happen in terms ofturnover, attrition rates,
retention problems.
Those are big signals that arelike you're going to have
problems.
Francesca (13:51):
Yeah, and those are significant drops.
Those are drops that you'd belike whoa, there's something in
this stew here that ain't good.
Oh yeah, yeah, huge.
Not surprising, though.
After layoffs you're just likeeveryone's flipping out.
If you don't have a goodcontrolled narrative, if you
don't have leaders that arereally guiding people through,
(14:11):
that, honestly, a lot of timesit becomes like Lord of the
Flies.
I'm not kidding 100%.
Mel (14:16):
They also learned, which I thought was interesting having
high employee engagement numbersbefore layoffs won't protect a
company from long-term negativeimpacts of doing the actual
layoffs.
They even note that the higheryour employee engagement is to
start, the more likely it is tofall off after layoffs occur.
(14:38):
They saw the largest decline inemployee engagement with
companies who were scoring inthe top 10% prior to the layoffs
taking place.
Francesca (14:47):
So I can see that though, because here's the deal
If you're doing all the reallygood stuff and people believe,
oh, it's an amazing place towork.
Mel (14:54):
We have all these perks.
Francesca (14:56):
Potentially.
You're doing well, so you'regetting bonused out.
People are investing in all ofyour development, et cetera, and
they haven't had rounds oflayoffs in a very long time.
You start believing that yourcompany is the shit, and then
you realize it is not yeah, it'sa huge Ooh.
Mel (15:13):
Yeah, I get it.
Francesca (15:14):
It's a fall from grace right.
Mel (15:15):
Okay, yep, and we covered this in the pod before a couple
months ago.
Actually, what they're findingand it's all their research is
reiterating earlier stuff we'vetalked about.
Company recovery time.
Post layoff is now 18 to 24months.
It used to be a six to 12months.
(15:35):
18 to 24 months.
That's only if you hire newemployees to backfill those
essential roles, because thepeople who are saying the
magic's gone.
Francesca (15:46):
Yeah, we calculated this last week because last week
we talked about flattening oforganizations, which is just
pulling manager levels out.
So if you had a manager to asenior manager, to a director,
and you said no more seniormanagers, we're just doing
manager to director, right,that's.
That's what's happening inthese orgs For instance, amazon
cutting 14,000 manager levelswhat happens is when we pulled
(16:09):
the data, like when you look atthe 90s we had talked about this
, had a suspicion and thenactually just pulled the data.
In the 90s, the average amountof direct reports a manager
would have or a leader wouldhave would be around one to four
.
One to four and we know thatyou never want more than seven
for great coaching, greatmentoring to have, and you know
(16:29):
what it is now.
The average right now is it'sone to eight, sometimes one to
12.
When you flatten out and if youlook at everything else that's
been on the plate, we're askingpeople to manage more people and
do more.
Nothing's come off of anybody'splate.
Mel (16:42):
Nothing.
I was just trying to dive intoone of the orgs who recently
conducted these layoffs withinthe last year to see if anyone's
getting some of that longerterm impact.
And, lucky for me, there was anarticle published in HR
Executive from Peter Capelli.
He's a talent managementcolumnist for HRE.
He's also the director of theCenter for HR at the Wharton
(17:04):
School of Business, theUniversity of Pennsylvania.
His article is called CuttingToo Much when HR Needs to Pump
the Brakes on Layoffs.
This felt like more of a callto action from HR to have
courage, which reminded me ofour conversation with Mike Ohata
about the call to courage withleaders and decision-making.
(17:25):
So in the article he'shighlighting the company
Stellantis.
Have you heard of Stellantis?
Francesca (17:30):
Oh, stellantis, they make a Jeep right and Chrysler.
They're actually one of thebiggest car manufacturers in the
world.
Mel (17:36):
Yeah, they're the holding company for Fiat Chrysler,
Maserati, Alfa Romeo, and theywere once the largest auto
manufacturer in the world.
Francesca (17:46):
But not anymore.
Who's it?
Gm?
Who is the largest you know?
Does it?
I don't know, it doesn't matter, sorry.
Mel (17:51):
It doesn't matter, but now I need to know.
Someone look that up and tellus my trivia is wrong.
Anyway, sorry, go ahead, don'ttake me to trivia night.
I suck, all right.
What's happened recently?
Their share prices have fallenby 50% since March.
They're bleeding executives, alot of executives have left.
He notes in the article thatindustry analysts looking into
(18:13):
why, have called out that theCEO has made Stellantis quote
more efficient than competitive,calling out the fact that
Stellantis is employed byinvestment companies who are
pushing relentlessly to cutcosts.
And three of the big issueswere they're fighting suppliers
(18:35):
on contracts, they're fightingtrade unions representing
employees.
So already bad for your brand.
Reuters reported last week thatStellantis filed new lawsuits
against the United Auto WorkersUnion, for example, just I think
on October 7th.
But they've also staged roundafter round of layoffs to get
(18:56):
leaner, to cut costs and they'rerelying on layoffs to do it.
And one article an employeenoted that they feel like they
make the vehicles but they can'teven afford them and they
called out a specific perk thatwas received by employees where
they could lease cars throughthe org as a perk as being an
(19:16):
employee.
But for workers who got a leasethrough that program that then
lost their jobs through theselayoffs.
They received a letter tellingthem they needed to send the
vehicle back.
So employee sentiment that'sjust one example of something
that's occurred through thatlayoff.
Employee sentiment is now thatthey don't care about them, and
(19:36):
just the business bottom line.
But Stellantis is a lessonright.
What Peter is saying in thisarticle is hey, other businesses
who are going through layoffs,lessons learned here.
The outcome Stellantis has carsthat people don't want.
They don't have the employeesthat work on the innovation.
They have had a huge hit toemployee engagement and morale
(19:57):
and they've cut so much that ithas damaged the company's
ability to succeed.
Keep cutting until things stopworking.
But it's not irrational ifcutting is your ultimate goal.
(20:18):
And what he highlighted and whatyou touched on last week was
Jack Welch and GE.
What was the workout model?
Where essentially they justtook staff out and left
remaining staff to figure it out, which led to a whole other
list of business issues andchallenges which we just talked
about what it means to pull outall these employees.
So the big takeaway here, inline with HBR research, was
rebuilding is never as fast ascutting.
(20:39):
And Stellantis, they're nowstuck with these cars they can't
sell, and Peter noted it'sgoing to take them years to
innovate, to even get to thosebetter cars, because they don't
have the staff to do it, theydon't have the talent to do it
and it's going to even takelonger to repair the damage
that's now been done to theiroverall brand.
Francesca (20:57):
That's a huge hit.
It's a huge hit.
And I think the thing, thechoice points on that and not
that I know Solanta is that well, but like you think about,
there's always choice points onthe board.
Right, you can cut people, youcan cut products.
For instance, is Fiat reallywhat you really want to be doing
right now?
Do you need 55 different typesof Jeeps?
(21:19):
Maserati really Are we reallydoing this?
Is Alfa Romeo really working inthe US?
Maybe not.
For me, it always begs thesechoice points around.
There's always this pull forefficiency, and especially when
I freaking hate this guy.
But when Elon Musk walked intoTwitter and cut everybody and
anybody and quote unquotesupposedly proved that you could
(21:42):
run the organization with 30%of the people that were there,
I'd argue, did he really?
Because it's not even the sameproduct.
It's not the same product.
So you're making a decision ofto me, like you're running, yeah
, you're running, you'reoperating, but are you operating
well?
And there's a very starkdifference, and I would argue
(22:04):
from what you're saying is thatwhen you're doing these really
deep cuts, you're going to beoperating leaner, but you're not
going to be operating well, ahundred percent.
Mel (22:15):
Peter's call to action is to pay attention to your orgs
check engine light and his askto HR leaders is to have the
courage to pull and present thenumbers to leadership when
measurements are showing thingshave been cut too deep.
So that's a call to action forHR leaders.
I would say that's a call toaction for any leader have the
(22:35):
courage to have a conversation.
Hbr's call to action is fororgs to humanize the layoff
experience.
You and I talk about this a lotand it's something that we
shared extensive tips on in ourlayoff playbook from last year,
so we can link back to that forfolks who are interested, and
then for decision makers.
Considering the lever of layoffs, you should ask yourselves is
the short-term win worth thelong-term damage?
(22:57):
And also if the decision ismaking you more efficient or is
it making you more competitivein the long-term.
And which one do you care moreabout?
Vr article pulled out a reallygreat quote from a Pixar
director, brad Bird, who said ifyou have low morale, for every
dollar you spend you get 25cents value.
But if you have high morale,for every dollar you spend you
(23:19):
get $3 worth of value.
Francesca (23:22):
So keep that in mind, yeah.
Mel (23:26):
Is it efficient or is it competitive?
Francesca (23:33):
Fortune and the 100 best companies to work for did
this survey of Europeancompanies, and they found that
trust is a key factor for AIadoption.
There's a couple of things thatare really important here, and,
yes, this is a European study.
It absolutely holds true forany other country with a big
selection of knowledge workers,and we know that knowledge
workers' jobs are probably goingto have some of the biggest
(23:54):
impacts in terms of how AI willchange, shape their role and
their career.
And what they mentioned is that34% of the workforce is
actually excited to use AI tools, but only 25% feel their
organization is makingmeaningful investments in their
ability to use AI, so there'salready a little bit of a
(24:14):
discrepancy.
We covered a little bit ago,around the idea of bring your
own AI to work, that almost 80%of employees, linkedin and
Microsoft did a study that saidmost people are bringing their
own AI to work, while they'rewaiting for their organization
to figure this out.
Most people are excited, theywant to play, they want to test
it out, and so, whether or notyou're making an investment as a
(24:40):
company or not, or putting theprocesses into place, your
employees are using AI.
They're going to be bringing AI, but how you can really benefit
as a company is if you createthis environment of trust.
And the biggest difference theytalked about was fairness, and
when they looked at how thesetop 100 companies actually build
trust and build fairness, therewere three key ways that I
wanted to share.
One is they audit their totalcompensation to ensure every
(25:04):
employee gets their fair share.
So this is things like stockbonus programs, making sure that
people feel like they'regetting a percentage of the pie.
This is stuff like transparencyaround pay.
This is like making big stridesaround pay equity as well and
the transparency around that,that idea of fairness being
(25:27):
there in the system and alsothat transparency that would
build the trust that fairnessexists.
Specifically, aroundcompensation, right Makes sense,
and they talked about how Cisco, which is their fifth ranked
multinational company on thelist, regularly reviews
compensation.
They move very quickly to fixproblems and they have a very
big pay parity program going on.
(25:48):
So, again, employees feel likethey can trust the system and
that the system is as fair aspossible.
Mel (25:54):
Yeah, we talk about this often.
The transparency is key here inbuilding trust.
Francesca (25:59):
Yeah, what is it?
What is it?
Just be clear, just be clear,just be clear.
I know you and I when we firststarted working, you would get
in trouble if you told someonehow much you made.
Mel (26:08):
Oh my gosh.
Yeah, it was like it'sinstilled in us that you should
not ever talk about your salary,and I'm like why?
Francesca (26:15):
Yeah, Like a black hole right, it's a secret.
Yeah, but ideally it's all outin the open and if you are
working towards pay parity, ifyou're working towards fairness,
why would you have to hide?
So?
One the auditing of the totalcompensation, the transparency
around the total compensationfor every employee absolutely
doable, huge Cisco a great usecase for that.
(26:38):
Two is investing in talentmobility, and this happens in a
couple of different ways.
One is making sure your peoplehave things like continuous
upskilling around AI, that theyhave the opportunities to
actually apply those skills.
So, ie, please don't put outlike a everyone has to complete
this AI certification and thengive them no opportunity to
practice that.
Mel (26:57):
You're not having them test it and how they use it for work
?
Francesca (27:00):
Yeah, yes, One of the things is really making sure
that organizations think abouttheir blind spots, of who at the
company will have a harder timeaccessing training and
opportunity, and making sureyou're going into the nooks and
crannies of your organizationand figuring that out.
But when organizations do that,huge gains again in trust and
(27:22):
in fairness.
Yeah, the last one I loved,which I'm going to give
Salesforce as an example talkingcandidly with employees about
the future of AI in theworkplace.
Salesforce is an example ofthis in terms of how they're
going both ways in the future ofAI in the workplace.
One is they did put out acertification program about how
(27:45):
the company was approaching AI,so every employee had the
opportunity to have the literacyand, honestly, the talking
points around.
Where is Salesforce going withAI?
Within two months, 92% of allemployees completed the training
.
So again, this stuff's possible.
That's why I'm pointing thisout, bringing everyone along,
but in turn.
(28:05):
As I was reading this, I'm likedoesn't everyone do this?
Until I read the fine print.
In turn, salesforce employeesparticipate in a 15-minute
survey about their employeeexperience twice a year.
Now, right away, mel, I knowyou're probably thinking doesn't
everybody fucking do this?
What's so special about it?
Here's what's special about it.
No, they don't, no, they don't.
But this is the thing ontransparency that I would love
to see every company doing.
(28:26):
The company makes the surveyresults available to every
employee as part of theircommitment, and employees can
filter by location, leader,survey question and more, so you
can look up a leader and belike what's the feedback on this
particular leader as it relatesto employee engagement?
Mel (28:47):
I think that's excellent.
Yeah, I think that is 100%excellent, especially when you
think of the research that youdo.
Internal is internal talentmobility right Some at some
points there are pros and cons.
If you really love yourorganization and you feel like
you gain a lot from it it's likethe longevity, the opportunity
(29:07):
to learn and grow within acompany that you really believe
in or feel aligned to likethat's a huge positive.
But you and I have seen, likeinternal talent mobility also
has its downsides.
You're not really sure whatthat team is like.
It can be an entirely differentculture from the culture you're
coming from, even though it'sthe same organization.
In terms of clarity on the jobor growth opportunities when you
(29:30):
move to a new team, that's notalways clear either.
No, if that's going to help orhurt your career, even though
you're moving internally like,there's not a lot of insight
into that and typically youdon't get compensated as well as
if you are coming from theoutside.
Francesca (29:45):
No, you don't being internally, you just don't.
Mel (29:48):
Which is.
That's a whole otherconversation.
It's a good thing you justdon't, which is that's a whole
other conversation, but I lovethe idea of, like, full
transparency and equippingemployees with information that
they would normally have whenthey're doing research
externally for certain roles.
Like you get a lot of thisinformation externally.
Francesca (30:05):
Yeah, and the other thing I love about it, too, is
you and I have both led teams,led organizations.
About it, too, is you and Ihave both led teams, led
organizations.
If we had an internal candidatecome onto our team, I can go in
and look at a lot of timestheir performance reviews I have
access to that Just be fullytransparent.
It should be fully transparent,I think, and that's what I
really loved about it the ideaof things going both ways and
(30:27):
making sure that we're allriding on this ship, ship
together, and so it's notcomplex.
No, but it's not easy to do,but you can do it, and these
companies are doing it in termsof, again, that fairness, that
transparency, piece around comparound telemobility, around
transparency.
(30:47):
I find it interesting, though,that if you don't have that
trust, if you don't have thatsense of fairness in your soil,
right In the environment, in thefirmatera of your company right
now, your AI adoption as acompany is going to suffer.
Mel (31:06):
A hundred percent.
Francesca (31:18):
Hey, friends, this episode of your Work Friends was
hosted by Francesca Ranieri andmyself, mel Plett.
This episode was produced andedited by Mel Plett and myself,
francesca Ranieri.
Mel (31:23):
Our theme music is by Pink Zebra and you can follow us over
on all of our social mediaplatforms Instagram, tiktok,
youtube and, if you're soinclined, join us over on
LinkedIn in our large andgrowing community, and you can
email us at friend at your workfriends dot com, or visit us on
your work friends dot com.
(31:44):
Also, folks, please like,subscribe and leave a review.
If you enjoyed this episode,and if you really enjoyed it,
please share with a work friendor two.
Company recovery time post layoff is now 18 to 24 months.
It used to be six to 12 months,18 to 24 months.
That's only if you hire newemployees to backfill those
essential roles, because thepeople who are staying, the
magic's gone.
How was your weekend?
Francesca (00:32):
Good, my mother-in-law's here and she's
lovely, and so we've been goingaround doing fall things, farm
things.
Mel (00:39):
Oh yeah, what kind of farm things.
Francesca (00:41):
We went to a place called Topaz Farms, which is in
a place called Savvy Island,like right outside of Portland.
This place is just perfectlydesigned for people that live in
Portland but want a farmexperience that feels authentic
and also sells things like $12Frose.
(01:01):
You know I'm a big fan Someonein love with a massive
pot-bellied pig that I secretlywant to take every time I go
there.
Anything fun happen for youthis weekend.
Mel (01:11):
Yeah, For folks who don't know, I'm a huge New Kids on the
Block fan still, and I met upwith a friend who I met on the
cruise a few years ago and wewent to see Drag the Musical
Wait can.
Francesca (01:24):
I just stop your story right now.
Yeah, just real quick.
You said the cruise as in.
Everybody's gonna know whatsaid cruise is.
Can you explain on?
Mel (01:32):
the new kids on the block cruise years ago.
Which was amazing was a delayed40th birthday joint 40th
birthday celebration that gotshut down from covid in 2020.
So it was a do-over and it wassuch a fun experience.
Highly recommend it for folkswho just want to dance party for
four days straight.
So, yeah, we went to drag themusical Joey McIntyre's in it.
(01:55):
So that's the new kidsconnection.
We were like, oh, let's go seethe show and, bonus, we get to
see him.
So it was just phenomenal.
Highly recommend it for anyonelooking for something really fun
.
Francesca (02:07):
If you love broadway, go check out this show yeah, I
imagine that's got to be just afun show joyful and so uplifting
and such a positive story andjust such goodness throughout.
Mel (02:20):
I don't think I stopped cheesing from start to finish.
It's just that entertaining, sogo see it, go see it all right,
good, and it's in new york city.
It's off, like off broadway oron broadway yes, new world stage
, amazing, amazing cast and crewand the whole thing was just
fun.
So, if you're in the area.
Francesca (02:43):
Check it out.
Portland doesn't have that muchof a theater scene.
I shouldn't say that before Iget a ton of hate.
I'm not familiar with thePortland.
Mel (02:50):
There's a difference.
Francesca (02:52):
Jeff's mom loves theater and so.
Jeff took her to Sweeney Todd.
Mel (02:58):
Oh yeah, I love Sweeney Todd.
Do you really it's so dark?
Francesca (03:03):
Yeah, my sister is into musical theater, so I grew
up going to a bunch of theater.
I hate to tell you this.
I hate going to musicals andplays.
I feel like you would like themusical I went to, though I do
like some musicals, like I loved.
Hair Rent was okay.
We went to Cats on Broadwaywhen I was in high school.
I fell asleep in the theater.
Mel (03:24):
I just can't get over.
You just said rents Okay.
Francesca (03:27):
Rent.
Mel (03:28):
I don't know what's wrong with you Like.
Francesca (03:30):
Miss Saigon.
Les Mis is so fucking long, I'mjust like I'm going to wrap
this up.
Mel (03:34):
Yeah, this is long.
You know what was really reallyfun?
Say it Legally Blonde.
Francesca (03:42):
See I Legally Blonde was awesome.
I think I would get into thatBook of Mormon, one of my
favorites.
Mel (03:49):
I think I like things that are funny or just really well
done, I don't know when you cometo New York, we'll have to go
back, because I will 100% goback to this show 80 times.
Francesca (03:58):
Yes, the way you explain it, that I would go to,
I can't do the melodramatic shit.
I'm sorry I'm surrounded bypeople who melodramatic shit.
I'm sorry, I know I and I'msurrounded by people who love
musicals and I'm just like enjoy.
Back with new week, newheadlines.
Mel, I have no idea what you'retalking about.
We're surprising each other.
So what are you talking abouttoday?
Mel (04:18):
Oh, I hate to even start with this one because I feel
like now it's just an oldie,that's an oldie and it keeps
coming back up.
Hbr just did a research articletalking about the long-term
costs of layoffs and I also readan article in HR Executive also
talking about the dangers ofthe long-term costs of layoffs
(04:39):
for business and HRprofessionals.
Francesca (04:42):
I'm going to talk about that.
I'm very curious.
I'm very curious.
I'm very curious.
Fortune Magazine came out withan article this week.
At 100 best companies in Europe, high levels of trust set the
stage for AI, and theyinterviewed over 26,000 people
and figured out that there's acouple things that really set
the groundwork for AI.
If you have them, fantastic.
(05:03):
If you don't, no bueno.
So I want to talk about that,and I also have two F yes
stories that dropped that.
I want to jam about F yeah Allright, let's do it.
Mel (05:17):
Let's start with the F yeah .
We need some good F yeah news.
Francesca (05:20):
Okay, Now we like to get our news sources from a
variety of different places.
Edm tunes that's where I'mgetting this from, but I loved
it.
Our employees are not children.
A direct quote from the CHRO ofSpotify that will keep remote
working.
Mel (05:37):
Hey, I love to hear that.
I read an article this weekabout how CEOs are saying remote
work will be gone in threeyears.
Yeah, so nice to hear thatthere's some sane companies out
there.
Francesca (05:50):
So the CHRO for Spotify, katrina Berg, just
holding the line over there atSpotify.
Totally love it.
The quote in the article is youcan't spend a lot of time
hiring grownups and then treatthem like children, she argued.
And I just love to see thisbecause all around Spotify
people are saying no, come backto the office.
People are doing selective dataaround.
(06:12):
Oh, you're more productive inthe office, even though the
majorities of studies are sayingnot necessarily or no, not at
all.
Love that they're holding theline here.
Mel (06:22):
Yeah, I do too, I will tell you.
I'm not trying to shamenecessarily, but I recently
watched a video from Workdayabout their flexible work policy
and I think a good example ofsomeone overcomplicating.
They call it the work fromalmost anywhere.
Francesca (06:40):
Okay, what I don't know when you're explaining,
you're losing.
I don't even know what the hellyou mean by that.
Mel (06:44):
So that headline is what caught my attention.
I was like what does that mean?
Because right away, as anemployee, I would be like what
does that mean?
So now I need to look up whatis this?
That's already complicatingthings, and when I listened to
the program, it is essentially aresponse to RTO and them saying
their employees who had flexwork during COVID now are being
(07:06):
required to come into the officeat least 50% of the time
because it builds collaborationand community, but so does
virtual work when you do itappropriately.
So that's whatever bullshitthing, just to call it what it
is, it's selective, it'sselective, yeah, totally
selective.
That's one of their core values.
So addressing the needs of thebusinesses, of meeting those
(07:27):
core values and other employeesfeedback because they post their
employees weekly was that theywant more flexibility, no
kidding.
So now there's this program,but this isn't a perfect example
of overcomplicating things, sokudos to you, spotify.
What they did is they createdan internal app and they call it
(07:48):
this work from almost anywhereprogram, where you have 30 days
over the year that you can useany way you'd like to work,
either from home or anotherlocation.
But now they've created an appto monitor that and you have to
put in a formal request forthese 30 days throughout the
year and how you use them foryour flex time.
Instead of just trusting youremployees.
(08:09):
We'll use that.
There's now a formal product inplace.
They created an app and I justkept thinking, listening to this
like this is not the amazingprogram you think it is.
And how many hours have beenwasted on overcomplicating
something that doesn't need tobe complicated?
Francesca (08:25):
No, it doesn't need to be complicated.
You either trust your employeesor you don't.
People are either producingwhat they need to produce or
they're not, and it's literallythat simple.
It's literally that simple.
Mel (08:36):
And if you're going to give the 30 days, why do you need to
say almost anywhere?
Then it means they can workfrom anywhere.
Yeah, and you trust they'regoing to get the job done.
Spotify, kudos to you.
Francesca (08:47):
All right, so there's Spotify my other ones.
You probably saw this floatingaround LinkedIn, but just wanted
to call it out because Iappreciate the sense of humor.
Xftx CEO's crazy LinkedInupdate starting new job as
prisoner in jail Did you seethis?
Yeah, so Economic Times, we'llpost this on our show notes.
Ryan Salameh, who is an FTXexecutive, is starting his
(09:10):
prison sentence and decided toupdate his LinkedIn profile and
I just thought that was thefunniest, freaking thing on the
face of the planet.
Mel (09:18):
I was like do you create a new banner?
That's like on hold in prison.
Francesca (09:27):
He put his position as inmate at FCI Cumberland and
I'm just here for it, I'mtotally here for it, like it's.
At least you have a sense ofhumor.
Those are my two F.
Yeah, I get those are really sofunny.
Yes, yes, so have to have asense of humor.
I'm curious these long-termimpacts of layoffs.
Mel (09:49):
I'm surprised I have all my shocked faces lately.
I am shocked.
The headline is I'm not goingto really mention anything brand
new that we haven't alreadydiscussed on this podcast for
the past year now.
We've called out these thingssince last November and Now more
of the research is catching upto essentially confirm
everything that we've talkedabout.
Francesca (10:11):
So we're like oracles .
Mel (10:12):
We're like oracles A nice friendly reminder for folks who
may have not heard earlierepisodes of your Work Friends.
Hbr came out with an articlethis past week called the
Long-Term Costs of Layoffs.
It's a research article put outby Didier Elzinga and Amy
Lavoie and it was essentiallyhighlighting the longer term
implications of layoffs andconsiderations that business
(10:33):
leaders need to take intoaccount and HR leaders Some of
the key things.
Right, you and I.
We've seen sweeping layoff news.
We get news alerts in our email.
We get listener alerts aboutlayoffs that are happening
almost daily.
I would say, in the past weekalone, we saw Amazon cutting the
14,000 jobs that you coveredjust last week.
(10:53):
Boeing is going to lay off 10%of its workforce, about 17,000
jobs.
Intel is planning to cut 15,000jobs, pwc is doing layoffs, cvs
, bayer, johnson, johnson, andthe list goes on and on.
By the way, I found somethingpretty cool during my research
there's a new warn trackerreport out there.
Francesca (11:14):
Skuza, skuza.
What do you mean?
What?
Mel (11:17):
Yeah, so you know how we talked about how most states
have a warn report.
It's not required by everystate, but a lot of states have
a warn report which, for anyonewho doesn't know what that is,
it's essentially they requireemployers to submit a warn
report, which, for anyone whodoesn't know what that is, it's
essentially they requireemployers to submit a warn
report, essentially notifyingthat layoffs are going to occur
and where, and all of that.
So there's a new warn report,tracker report that consolidates
(11:42):
every report from every stateinto one database.
Francesca (11:46):
Which is yeah, because if you're working for a
big company and they're inmultiple States, then you'll be,
you don't have to go tomultiple States site, you can
just see it in one place, oh,and it pulls it up for you, so
I'm going to link to that.
Mel (12:03):
Going to that after this bookmark that site friends and
we just covered last week, whenwe discussed the move to remove
managers and flattened orgs, theself-management approach and
long-term implications of that.
With the short-term gains onsavings, but again there's huge
long-term losses on having tocorrect these deep cuts.
So this article discussed howthe industry being hardest hit
(12:25):
right now is tech.
We know this.
Noting 100,000 rules have beencut in 2024 so far, and HBR
studied 146 companies that wentthrough layoffs between March of
2020 and November of 2022.
And what they looked at wereemployee engagement surveys
before and after layoffs, andthey also leveraged data that
(12:46):
they pulled from the layoffs FYI, which you know is the master
list of all layoffs happening.
The research shows that whilelayoffs do achieve those
short-term gains for thebusiness things like some
short-term financial benefits wetalk about this often, the
right size burn to ensurecontinued economic stability,
for example some of thosebenefits happen right, but the
(13:08):
cost of these decisions theyfound include long-term impacts
like loss of employee morale,engagement and loyalty, and they
noted that on average, afterlayoffs, company confidence
drops by 16.9%, belief in careeropportunities drop by 12.1% and
confidence in leadership dropsby 10.5%.
(13:31):
That's the average of whathappens and those are for folks
like employee engagement.
Those are like three keydetermining factors on what's
going to happen in terms ofturnover, attrition rates,
retention problems.
Those are big signals that arelike you're going to have
problems.
Francesca (13:51):
Yeah, and those are significant drops.
Those are drops that you'd belike whoa, there's something in
this stew here that ain't good.
Oh yeah, yeah, huge.
Not surprising, though.
After layoffs you're just likeeveryone's flipping out.
If you don't have a goodcontrolled narrative, if you
don't have leaders that arereally guiding people through,
(14:11):
that, honestly, a lot of timesit becomes like Lord of the
Flies.
I'm not kidding 100%.
Mel (14:16):
They also learned, which I thought was interesting having
high employee engagement numbersbefore layoffs won't protect a
company from long-term negativeimpacts of doing the actual
layoffs.
They even note that the higheryour employee engagement is to
start, the more likely it is tofall off after layoffs occur.
(14:38):
They saw the largest decline inemployee engagement with
companies who were scoring inthe top 10% prior to the layoffs
taking place.
Francesca (14:47):
So I can see that though, because here's the deal
If you're doing all the reallygood stuff and people believe,
oh, it's an amazing place towork.
Mel (14:54):
We have all these perks.
Francesca (14:56):
Potentially.
You're doing well, so you'regetting bonused out.
People are investing in all ofyour development, et cetera, and
they haven't had rounds oflayoffs in a very long time.
You start believing that yourcompany is the shit, and then
you realize it is not yeah, it'sa huge Ooh.
Mel (15:13):
Yeah, I get it.
Francesca (15:14):
It's a fall from grace right.
Mel (15:15):
Okay, yep, and we covered this in the pod before a couple
months ago.
Actually, what they're findingand it's all their research is
reiterating earlier stuff we'vetalked about.
Company recovery time.
Post layoff is now 18 to 24months.
It used to be a six to 12months.
(15:35):
18 to 24 months.
That's only if you hire newemployees to backfill those
essential roles, because thepeople who are saying the
magic's gone.
Francesca (15:46):
Yeah, we calculated this last week because last week
we talked about flattening oforganizations, which is just
pulling manager levels out.
So if you had a manager to asenior manager, to a director,
and you said no more seniormanagers, we're just doing
manager to director, right,that's.
That's what's happening inthese orgs For instance, amazon
cutting 14,000 manager levelswhat happens is when we pulled
(16:09):
the data, like when you look atthe 90s we had talked about this
, had a suspicion and thenactually just pulled the data.
In the 90s, the average amountof direct reports a manager
would have or a leader wouldhave would be around one to four
.
One to four and we know thatyou never want more than seven
for great coaching, greatmentoring to have, and you know
(16:29):
what it is now.
The average right now is it'sone to eight, sometimes one to
12.
When you flatten out and if youlook at everything else that's
been on the plate, we're askingpeople to manage more people and
do more.
Nothing's come off of anybody'splate.
Mel (16:42):
Nothing.
I was just trying to dive intoone of the orgs who recently
conducted these layoffs withinthe last year to see if anyone's
getting some of that longerterm impact.
And, lucky for me, there was anarticle published in HR
Executive from Peter Capelli.
He's a talent managementcolumnist for HRE.
He's also the director of theCenter for HR at the Wharton
(17:04):
School of Business, theUniversity of Pennsylvania.
His article is called CuttingToo Much when HR Needs to Pump
the Brakes on Layoffs.
This felt like more of a callto action from HR to have
courage, which reminded me ofour conversation with Mike Ohata
about the call to courage withleaders and decision-making.
(17:25):
So in the article he'shighlighting the company
Stellantis.
Have you heard of Stellantis?
Francesca (17:30):
Oh, stellantis, they make a Jeep right and Chrysler.
They're actually one of thebiggest car manufacturers in the
world.
Mel (17:36):
Yeah, they're the holding company for Fiat Chrysler,
Maserati, Alfa Romeo, and theywere once the largest auto
manufacturer in the world.
Francesca (17:46):
But not anymore.
Who's it?
Gm?
Who is the largest you know?
Does it?
I don't know, it doesn't matter, sorry.
Mel (17:51):
It doesn't matter, but now I need to know.
Someone look that up and tellus my trivia is wrong.
Anyway, sorry, go ahead, don'ttake me to trivia night.
I suck, all right.
What's happened recently?
Their share prices have fallenby 50% since March.
They're bleeding executives, alot of executives have left.
He notes in the article thatindustry analysts looking into
(18:13):
why, have called out that theCEO has made Stellantis quote
more efficient than competitive,calling out the fact that
Stellantis is employed byinvestment companies who are
pushing relentlessly to cutcosts.
And three of the big issueswere they're fighting suppliers
(18:35):
on contracts, they're fightingtrade unions representing
employees.
So already bad for your brand.
Reuters reported last week thatStellantis filed new lawsuits
against the United Auto WorkersUnion, for example, just I think
on October 7th.
But they've also staged roundafter round of layoffs to get
(18:56):
leaner, to cut costs and they'rerelying on layoffs to do it.
And one article an employeenoted that they feel like they
make the vehicles but they can'teven afford them and they
called out a specific perk thatwas received by employees where
they could lease cars throughthe org as a perk as being an
(19:16):
employee.
But for workers who got a leasethrough that program that then
lost their jobs through theselayoffs.
They received a letter tellingthem they needed to send the
vehicle back.
So employee sentiment that'sjust one example of something
that's occurred through thatlayoff.
Employee sentiment is now thatthey don't care about them, and
(19:36):
just the business bottom line.
But Stellantis is a lessonright.
What Peter is saying in thisarticle is hey, other businesses
who are going through layoffs,lessons learned here.
The outcome Stellantis has carsthat people don't want.
They don't have the employeesthat work on the innovation.
They have had a huge hit toemployee engagement and morale
(19:57):
and they've cut so much that ithas damaged the company's
ability to succeed.
Keep cutting until things stopworking.
But it's not irrational ifcutting is your ultimate goal.
(20:18):
And what he highlighted and whatyou touched on last week was
Jack Welch and GE.
What was the workout model?
Where essentially they justtook staff out and left
remaining staff to figure it out, which led to a whole other
list of business issues andchallenges which we just talked
about what it means to pull outall these employees.
So the big takeaway here, inline with HBR research, was
rebuilding is never as fast ascutting.
(20:39):
And Stellantis, they're nowstuck with these cars they can't
sell, and Peter noted it'sgoing to take them years to
innovate, to even get to thosebetter cars, because they don't
have the staff to do it, theydon't have the talent to do it
and it's going to even takelonger to repair the damage
that's now been done to theiroverall brand.
Francesca (20:57):
That's a huge hit.
It's a huge hit.
And I think the thing, thechoice points on that and not
that I know Solanta is that well, but like you think about,
there's always choice points onthe board.
Right, you can cut people, youcan cut products.
For instance, is Fiat reallywhat you really want to be doing
right now?
Do you need 55 different typesof Jeeps?
(21:19):
Maserati really Are we reallydoing this?
Is Alfa Romeo really working inthe US?
Maybe not.
For me, it always begs thesechoice points around.
There's always this pull forefficiency, and especially when
I freaking hate this guy.
But when Elon Musk walked intoTwitter and cut everybody and
anybody and quote unquotesupposedly proved that you could
(21:42):
run the organization with 30%of the people that were there,
I'd argue, did he really?
Because it's not even the sameproduct.
It's not the same product.
So you're making a decision ofto me, like you're running, yeah
, you're running, you'reoperating, but are you operating
well?
And there's a very starkdifference, and I would argue
(22:04):
from what you're saying is thatwhen you're doing these really
deep cuts, you're going to beoperating leaner, but you're not
going to be operating well, ahundred percent.
Mel (22:15):
Peter's call to action is to pay attention to your orgs
check engine light and his askto HR leaders is to have the
courage to pull and present thenumbers to leadership when
measurements are showing thingshave been cut too deep.
So that's a call to action forHR leaders.
I would say that's a call toaction for any leader have the
(22:35):
courage to have a conversation.
Hbr's call to action is fororgs to humanize the layoff
experience.
You and I talk about this a lotand it's something that we
shared extensive tips on in ourlayoff playbook from last year,
so we can link back to that forfolks who are interested, and
then for decision makers.
Considering the lever of layoffs, you should ask yourselves is
the short-term win worth thelong-term damage?
(22:57):
And also if the decision ismaking you more efficient or is
it making you more competitivein the long-term.
And which one do you care moreabout?
Vr article pulled out a reallygreat quote from a Pixar
director, brad Bird, who said ifyou have low morale, for every
dollar you spend you get 25cents value.
But if you have high morale,for every dollar you spend you
(23:19):
get $3 worth of value.
Francesca (23:22):
So keep that in mind, yeah.
Mel (23:26):
Is it efficient or is it competitive?
Francesca (23:33):
Fortune and the 100 best companies to work for did
this survey of Europeancompanies, and they found that
trust is a key factor for AIadoption.
There's a couple of things thatare really important here, and,
yes, this is a European study.
It absolutely holds true forany other country with a big
selection of knowledge workers,and we know that knowledge
workers' jobs are probably goingto have some of the biggest
(23:54):
impacts in terms of how AI willchange, shape their role and
their career.
And what they mentioned is that34% of the workforce is
actually excited to use AI tools, but only 25% feel their
organization is makingmeaningful investments in their
ability to use AI, so there'salready a little bit of a
(24:14):
discrepancy.
We covered a little bit ago,around the idea of bring your
own AI to work, that almost 80%of employees, linkedin and
Microsoft did a study that saidmost people are bringing their
own AI to work, while they'rewaiting for their organization
to figure this out.
Most people are excited, theywant to play, they want to test
it out, and so, whether or notyou're making an investment as a
(24:40):
company or not, or putting theprocesses into place, your
employees are using AI.
They're going to be bringing AI, but how you can really benefit
as a company is if you createthis environment of trust.
And the biggest difference theytalked about was fairness, and
when they looked at how thesetop 100 companies actually build
trust and build fairness, therewere three key ways that I
wanted to share.
One is they audit their totalcompensation to ensure every
(25:04):
employee gets their fair share.
So this is things like stockbonus programs, making sure that
people feel like they'regetting a percentage of the pie.
This is stuff like transparencyaround pay.
This is like making big stridesaround pay equity as well and
the transparency around that,that idea of fairness being
(25:27):
there in the system and alsothat transparency that would
build the trust that fairnessexists.
Specifically, aroundcompensation, right Makes sense,
and they talked about how Cisco, which is their fifth ranked
multinational company on thelist, regularly reviews
compensation.
They move very quickly to fixproblems and they have a very
big pay parity program going on.
(25:48):
So, again, employees feel likethey can trust the system and
that the system is as fair aspossible.
Mel (25:54):
Yeah, we talk about this often.
The transparency is key here inbuilding trust.
Francesca (25:59):
Yeah, what is it?
What is it?
Just be clear, just be clear,just be clear.
I know you and I when we firststarted working, you would get
in trouble if you told someonehow much you made.
Mel (26:08):
Oh my gosh.
Yeah, it was like it'sinstilled in us that you should
not ever talk about your salary,and I'm like why?
Francesca (26:15):
Yeah, Like a black hole right, it's a secret.
Yeah, but ideally it's all outin the open and if you are
working towards pay parity, ifyou're working towards fairness,
why would you have to hide?
So?
One the auditing of the totalcompensation, the transparency
around the total compensationfor every employee absolutely
doable, huge Cisco a great usecase for that.
(26:38):
Two is investing in talentmobility, and this happens in a
couple of different ways.
One is making sure your peoplehave things like continuous
upskilling around AI, that theyhave the opportunities to
actually apply those skills.
So, ie, please don't put outlike a everyone has to complete
this AI certification and thengive them no opportunity to
practice that.
Mel (26:57):
You're not having them test it and how they use it for work
?
Francesca (27:00):
Yeah, yes, One of the things is really making sure
that organizations think abouttheir blind spots, of who at the
company will have a harder timeaccessing training and
opportunity, and making sureyou're going into the nooks and
crannies of your organizationand figuring that out.
But when organizations do that,huge gains again in trust and
(27:22):
in fairness.
Yeah, the last one I loved,which I'm going to give
Salesforce as an example talkingcandidly with employees about
the future of AI in theworkplace.
Salesforce is an example ofthis in terms of how they're
going both ways in the future ofAI in the workplace.
One is they did put out acertification program about how
(27:45):
the company was approaching AI,so every employee had the
opportunity to have the literacyand, honestly, the talking
points around.
Where is Salesforce going withAI?
Within two months, 92% of allemployees completed the training
.
So again, this stuff's possible.
That's why I'm pointing thisout, bringing everyone along,
but in turn.
(28:05):
As I was reading this, I'm likedoesn't everyone do this?
Until I read the fine print.
In turn, salesforce employeesparticipate in a 15-minute
survey about their employeeexperience twice a year.
Now, right away, mel, I knowyou're probably thinking doesn't
everybody fucking do this?
What's so special about it?
Here's what's special about it.
No, they don't, no, they don't.
But this is the thing ontransparency that I would love
to see every company doing.
(28:26):
The company makes the surveyresults available to every
employee as part of theircommitment, and employees can
filter by location, leader,survey question and more, so you
can look up a leader and belike what's the feedback on this
particular leader as it relatesto employee engagement?
Mel (28:47):
I think that's excellent.
Yeah, I think that is 100%excellent, especially when you
think of the research that youdo.
Internal is internal talentmobility right Some at some
points there are pros and cons.
If you really love yourorganization and you feel like
you gain a lot from it it's likethe longevity, the opportunity
(29:07):
to learn and grow within acompany that you really believe
in or feel aligned to likethat's a huge positive.
But you and I have seen, likeinternal talent mobility also
has its downsides.
You're not really sure whatthat team is like.
It can be an entirely differentculture from the culture you're
coming from, even though it'sthe same organization.
In terms of clarity on the jobor growth opportunities when you
(29:30):
move to a new team, that's notalways clear either.
No, if that's going to help orhurt your career, even though
you're moving internally like,there's not a lot of insight
into that and typically youdon't get compensated as well as
if you are coming from theoutside.
Francesca (29:45):
No, you don't being internally, you just don't.
Mel (29:48):
Which is.
That's a whole otherconversation.
It's a good thing you justdon't, which is that's a whole
other conversation, but I lovethe idea of, like, full
transparency and equippingemployees with information that
they would normally have whenthey're doing research
externally for certain roles.
Like you get a lot of thisinformation externally.
Francesca (30:05):
Yeah, and the other thing I love about it, too, is
you and I have both led teams,led organizations.
About it, too, is you and Ihave both led teams, led
organizations.
If we had an internal candidatecome onto our team, I can go in
and look at a lot of timestheir performance reviews I have
access to that Just be fullytransparent.
It should be fully transparent,I think, and that's what I
really loved about it the ideaof things going both ways and
(30:27):
making sure that we're allriding on this ship, ship
together, and so it's notcomplex.
No, but it's not easy to do,but you can do it, and these
companies are doing it in termsof, again, that fairness, that
transparency, piece around comparound telemobility, around
transparency.
(30:47):
I find it interesting, though,that if you don't have that
trust, if you don't have thatsense of fairness in your soil,
right In the environment, in thefirmatera of your company right
now, your AI adoption as acompany is going to suffer.
Mel (31:06):
A hundred percent.
Francesca (31:18):
Hey, friends, this episode of your Work Friends was
hosted by Francesca Ranieri andmyself, mel Plett.
This episode was produced andedited by Mel Plett and myself,
francesca Ranieri.
Mel (31:23):
Our theme music is by Pink Zebra and you can follow us over
on all of our social mediaplatforms Instagram, tiktok,
youtube and, if you're soinclined, join us over on
LinkedIn in our large andgrowing community, and you can
email us at friend at your workfriends dot com, or visit us on
your work friends dot com.
(31:44):
Also, folks, please like,subscribe and leave a review.
If you enjoyed this episode,and if you really enjoyed it,
please share with a work friendor two.
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