Tag: skills

Malls and the economic divide

The fate of two shopping malls illustrates the importance of skills and education for communities

Yesterday we posted on how a lack of education is contributing to the decline of America’s middle class. An article on Bloomberg’s Gadfly website illustrates the direct effects of this change in comparing the fortunes of two different shopping malls.

It’s not news that America’s malls are dying in the face of changing demographics, consumer tastes and economics but some centres continue to thrive.

Bloomberg’s Shelly Banjo and Rani Molla put the success of some malls down to the affluence of their customers. A centre that boasts Tesla, Apple and Louis Vuitton stores such as Atlanta’s Lenox Square thrives and charges high rents to its tenants.

Just the presence of an Apple Store boosts a centre’s rents by 13% claim the authors.

Eight miles away from Lenox Square is Northlake Mall which only attracts a quarter of the rents on a per square foot (psf) basis and doesn’t boast the high quality names but rather a range of fading chains and department stores.

Northlake’s woes lie in demographics with its shoppers scoring poorly compared to Lenox Square’s on all measures.

atlanta-mall-comparison

The key points are per capita income and the education level with only just over half of Northlake’s customers having a college degree or better with the result earning only 2/3rds of that of Lenox Square’s shoppers.

Northlake’s lagging educational and income levels isn’t unusual as this is exactly the problem facing most of the lower middle classes as their earnings fall as their skills are left behind by an increasingly technological society.

The decline of Northlake, and most of America’s malls, illustrates the effects of an undereducated workforce on the local economy. Making sure the population has the skills to compete in the 21st Century is more than just a problem for the individuals affected.

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Defining the workplace of the future

Both the jobs and workplaces of the near future are going to look very different to today.

Last week in Sydney recruitment company Indeed sponsored a Future of Work summit to tease out some ideas about the what jobs will look like in the future.

While I wasn’t able to attend, being in Melbourne to deliver the Managing the Data Age presentation, I did manage to attend a lunch where Paul D’Arcy, the head of Indeed’s Hiring Lab, spoke about some of the trends we’re seeing in the workplace.

“One of the things we see is the change in the role of work over time,” says D’Arcy. “There was a period before the industrial revolution where work was where natural resources were. With the industrial revolution there was a shift to where the companies were organised.”

The interesting thing with that view is that the companies of the early industrial revolution gathered where the natural resources were easily accessed and finish products could be shipped as we saw when visiting England’s Ironbridge, one of the birthplaces of modern industry.

D’Arcy sees technology changing the idea that work goes to the companies, “where people with highly in demand skills congregate then that’s where jobs are created.”

The employment centres of the future will be the cities that attract those highly skilled workers, D’Arcy believes.

Spreading the developer love

One of the changes Indeed has seen in the workplace is how coding has now become a widespread skill with three quarters of all software developers around the world being employed by software companies. In the US it’s only 7% of coders are working for pure tech organisations.

Marketing is one field that has seen a dramatic shift says D’Arcy, “marketing has seen an enormous shift from what was predominately a creative industry to one driven by data.”

One of the constant questions confounding those of us writing and speaking about the future of business is ‘what will be the jobs of the future?’ While D’Arcy didn’t really have that answer one of the points is clear that programming and coding will be among the skills in demand over the near future.

In the longer term it’s still not clear exactly what jobs will be in demand in twenty or thirty years time, then again twenty years ago who would have guessed many of the technology jobs in demand today would have even existed.

While we’re still struggling with what roles will define the workplace it’s clear the location of the workplace is changing as well. The worker of the future will be a much more mobile creature than today and that has ramifications for the future.

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Customer service and the internet of things

A Verizon and Harvard Business Review of the Internet of Things market is a useful guide to the sector’s future.

Improved customer service is the main reason for companies investing in the internet of things reports the Harvard Business Review.

Having surveyed 269 businesses for their Internet of Things: Science Fiction or Business Fact?  report commissioned by US telco Verizon, the Harvard Business Review team found 51% of companies expected improved customer service as being the main result from their IoT deployment.

Of those who have deployed IoT technologies, 62% reported they had seen improved customer responsiveness with authors citing jet engine manufacturers, share car services and stock feed companies having benefiting from their investments.

Tying together technologies that until recently have been stand alone is the key part of the returns realised by companies, allowing older monitoring systems to work better together and increase the value of the data they gather.

IoT can enable “an incredible unlocking of information about processes that companies never had before,” said Vernon Turner, senior vice president of research and IoT executive lead at International Data Corp. (IDC). Companies that take the time to review and analyze these workflows will quickly find that there are significant opportunities to be found, such as increased efficiency. But the biggest change IoT brings to consumer companies is the increased contact with customers, Turner said.

Of the IoT investments, the main area nominated for companies in the next year is asset tracking with 36% of respondents saying that will be their main focus. Combined with the 19% looking at fleet management, it shows that sector will probably the most lucrative for businesses servicing the IoT market.

Risks in the IoT

While tying together these technologies brings a lot of opportunities there’s no shortage of risks as devices that were never intended to be connected to the net are suddenly part of the global network. The survey shows some managers are aware of the risks that the IoT presents to their businesses with 46 percent citing privacy and regulatory compliance as being risks.

Another challenge facing IoT deployments is a lack of skills with two out of five respondents flagging they can’t find workers with the skillsets needed to leverage IoT data. The task of managing the volumes of data also worries a third of the managers surveyed.

The Verizon and HBR survey shows that managers and businesses are still in the early days of understanding the tasks and challenges presented by the internet of things — one suspects that were managers fully across the privacy and security implications the number of respondents flagging concerns would be close to one hundred percent.

For companies like Verizon who are catering to the M2M and IoT marketplaces this survey is a handy roadmap that lays out the market opportunities for the next two years.

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Reskilling the workforce

The 1980s management aim of reducing training costs is now affecting business, the next generation of leaders will be finding opportunities in today’s skills shortages.

One of the core objectives 1980s management philosophy is to shift costs and risks onto others. Staff training is one area that caught the brunt of the drive to slash expenses for short term gain, as a consequence we have a skills crisis with offers opportunities for savvy entrerpreneurs.

In Why Good People Can’t Get Jobs: Chasing After the ‘Purple Squirrel Wharton management professor Peter Cappelli discusses his recent book that looks at this problem.

Cappelli’s argument is that companies aren’t offering enough for the skills they desire, they often ask too much of candidates and they won’t train staff.

In Cappelli’s book, he claims that staff training has plummeted;

One of your chapters in the book is called “A Training Gap, Not a Skills Gap.” You have some figures showing that in 1979, young workers received an average of two and a half weeks of training per year. By 1991, only 17% of young employees reported getting any training during the previous year, and by last year, only 21% said they received training during the previous five years.

The predictable consequence of neglecting training for the last thirty years is we now face skills shortages and those responsible – the managers and business owners who refuse to train workers – are now demanding governments do something about it.

In many ways today’s skills shortages epitomise the short termism of 1980s thinking and how we now find society, and business, is struggling with the long term effects and costs.

Wherever there’s a problem there is opportunity and there’s a breed of businesses, training companies and workers who will be taking advantage of the failures of the previous generation of managers.

For those stuck in the 1980s mindset that training, like most staff expenses, is a cost and not an investment they are going to struggle in a world where adding value is more profitable than being the lowest cost provider.

 

The photo THE BEAD MAKER — Apprentice Watches the Master — A Rosary Shop in Old Meiji-Era Japan was posted to Flickr by Okinawa Soba.

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Undoing the untrained workforce

The era of skimping on staff training is over

One of the notable things about the 1980s way of doing business was how front line workers weren’t valued for their skills and knowledge.

In call centres, shopping malls and government departments, those who dealt with customers were seen as an unnecessary expense who should be outsourced at the first opportunity or, if it wasn’t possible to hive them off, then encourage them to get more money out of the customer while providing less service.

An example of this was at electronic superstores where sales staff with little product knowledge were given rudimentary training and then encouraged to sell easy payment plans and expensive acccessories – the HDMI cable scam where connectors of dubious quality earned more profit and commission than the HiFi systems or plasma TVs they plugged into illustrated how lousy a deal this way of doing business for the customer.

Much of that mentality has been inherited by web2.0 companies that think customer service is an optional extra.

Some of those companies can’t even be bothered protecting their clients’ data properly, such is their unwillingness to provide service.

The stack ’em high, sell ’em cheap self service culture of the 1950s and 60s reached its limits in the 1980s and was only given a reprieve by the easy credit boom of the 1990s. With the end of the credit boom, electronic or household goods stores that simply sell cheap tat on interest free terms at a fat mark up without adding value now struggle.

Gerry Harvey is getting out of electronics partly for this reason – his business model is dead and it’s been difficult for a decade to make the fat profits on consumer computers or electricals without hooking the customers with interest free deals or expensive and pointless accessories or software.

One of the conceits of management through the last part of the Twentieth Century was the mantra “our greatest asset are our people”, today business have to start valuing the skills, knowledge and corporate memory of their workforces.

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