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How do you know someone’s a good hire before they’re hired?
Companies have long had ways of evaluating job applicants, from recommendations and portfolio reviews to personality tests or basic assessments of their skills. But Emmy Lucas finds that more companies are expanding their pre-hire assessments at a time when the job market has been cooling in certain sectors, new AI tools are proliferating to help with the process and companies shed degree requirements in job postings. One survey of H.R. professionals by SHL, which makes human resources software that includes assessments, found that 40% of respondents plan to increase the pre-hire tests they expect candidates to take when interviewing for a new job.
For job seekers, it can be an onerous process. Simple tests of basic skills to prove their mettle is one thing, and new AI tools that test applicants’ skills in simulations or hypothetical scenarios—if done fairly—could be a significant boon for weeding out unqualified candidates. But Lucas spoke with job seekers who spent 10 to 15 hours each on pre-hire work for several potential jobs—that’s beyond interviews and prep time—an amount of time that can quickly pile up. As talent leaders—and those driving the hiring process—how do you think about balancing the need to validate employees’ skills with the work potential employees must shoulder? Do you ever pay candidates, as companies like software firm 37Signals say they do?
I’d love to hear from you about either one. Meanwhile, hope it’s a great week.
ECONOMY
Friday’s jobs report provided a somewhat mixed picture, showing a resilient job market with 275,000 added jobs—a figure that exceeded estimates—but the unemployment rate unexpectedly rose to its highest level since early 2022, when the Fed began hiking interest rates, reports Forbes’ Derek Saul. In a prepared statement, Indeed’s economic research director for North America put it this way: “The rate at which currently unemployed workers are finding new work does appear to be slowing, but remains generally robust. For those worried about signs of unwelcome heat in the market after the past few months, this report is a welcome cooling breeze. And if you’re concerned about a labor market on unsteady ground, you shouldn’t be too frightened.”
GENDER EQUITY
Equal Pay Day is Tuesday—the day marking how far into the year women must work to earn what men did in the prior year—coming four days after International Women’s Day on Friday. This year’s milestone came as Alabama legislators passed bills aimed at protecting providers of in vitro fertilization from civil and criminal liability following the state’s Supreme Court ruling that frozen embryos are children. The Alabama court’s move is one reason contributor Amanda Nguyen suggests the U.S. needs a “secretary of women”—a cabinet-level advocate for women’s equality. Meanwhile, contributor Katy McFee looks back at research showing women at the director level are leaving the workforce at a faster rate than they’re being promoted.
LABOR & CAPITAL
A coalition of labor groups ended its proxy campaign to nominate three people to the board of directors for Starbucks, following the company reporting significant progress on negotiations. Workers United and Starbucks last week agreed to “begin discussions on a foundational framework” to achieve collective bargaining agreements, and try to negotiate a resolution of ongoing litigation, and start providing union members certain benefits.
DIVERSITY & INCLUSION
The University of Florida eliminated positions affiliated with Diversity, Equity and Inclusion and closed its office devoted to diversity, an administrative memo said—the latest example of the state’s efforts to curtail DEI initiatives from public institutions. Yet while the news cycle may make it appear that DEI is dying, contributor Julie Kratz argues that companies are actually doubling down on diversity, equity and inclusion efforts, citing a study from employment law giant Littler that finds more than half of U.S. executives say their organizations have expanded their DEI strategies over the past year.
WHAT’S NEXT: SPOTLIGHT ON CHRO PAY
Everyone knows CEO pay has been rising dramatically over the past few decades. But I wrote this week about a new analysis from Stanford researchers Nick Bloom and Mert Akan about how much the pay of chief human resources officers has been growing, too.
The analysis is interesting because it doesn’t just tally the pay of CHROs, who remain predominantly female, but shows how it is finally starting to creep toward the level of other leaders in the C-suite. In 1992, their analysis found, heads of H.R. only made about 40% of what other non-CEO executives in the C-suite earned. Thirty years later, they’re making 70% of the pay of heads of business units or chief financial officers who have long been many organizations’ power brokers. That’s still not parity, but it’s a big improvement.
It’s possible, of course, that some of that gap’s closing is thanks to a growing awareness of pay equity, and more women H.R. chiefs negotiating for higher pay. But in conversations with both Bloom and Larry Emond, a senior partner at talent advisory firm Modern Executive Solutions, they cite the changing nature of the job, and the people filling it, as the bigger factor.
For one, H.R. chiefs have managed increasingly complicated polycrises of the last few years, playing the role of corporate nurse in the pandemic, work psychologist amid mental health challenges and logistics maven and peacemaker during the battle over hybrid work. But the big shift may be equally explained by the rise of non-H.R. executives spending time in the role—a sign of its growing value to the CEO amid labor supply concerns—and the increasing remit these executives have. A growing number don’t just lead H.R., but communications, marketing, legal or (my favorite) corporate “transformations.”
Emond thinks we’re going to see more of those. One thing he shared with me that’s not in the story is that those corporate “transformation” projects, which can mean anything from strategic overhauls to another word for downsizing, have long gone to chief financial officers. He’s working with one company right now that gave it to the CHRO instead, because the people and talent issues were core to the challenges the company faces. “I think you’re going to see a lot more of that,” he says. For more from my story, check out my piece here.
STRATEGIES AND ADVICE
Here’s why so-called ‘soft skills’ are really the hardest to master.
Check out these helpful AI tools for work, writes contributor Rachel Wells.
Here’s the best career and work advice from the celebrities, founders and other power players at the Forbes 30/50 Summit in Abu Dhabi.
FACTS AND COMMENT
If you were laid off in February, or managed job cuts at your company, you’re not alone. February made 2024 the year with the most second-month job cuts since 2009, according to Challenger, Gray & Christmas, Forbes’ Mary Whitfill Roeloffs reported.
84,638: The number of jobs American employers cut in the month of February, according to the report.
28,218: The number of jobs the technology sector is responsible for cutting so far this year—the most in any field—followed by financial firms, which cut 26,856 jobs.
‘Restructuring’: The most-cited reason for job cuts so far this year, according to Challenger. Store, unit or plant closures was next, followed by cost-cutting.
VIDEO
QUIZ
A major grocery chain has announced a $9 billion investment to open 800 new stores in the U.S. over the next four years. What grocery giant made the announcement?
- Kroger
- Aldi
- Costco
- Publix
Check to see if you got it right here.
