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Episode 3: Fear of Becoming Obsolete – Jason Averbook, Senior Partner and Global Leader of HR Strategy at Mercer
197 Plays27 days ago
In this compelling conversation, host Phil Fersht speaks with Jason Averbook—renowned HR leader and Senior Partner at Mercer—about the seismic changes reshaping the modern workforce. They explore the looming “humanistic recession” driven by AI, and how leaders must shift from “change management” to “change leadership.” Averbook warns that organizations failing to integrate human and machine teaming risk irrelevance, stressing that HR must move beyond counting heads to making heads truly count.
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Transcript
Introduction to Podcast and Guest
00:00:12
Speaker
You're listening to From the Horse's Mouth, intrepid conversations with Phil First, ready to meet the disruptors who are guiding us to the new great utopia by reshaping our world and pushing past corporate spin for honest conversations about the future impact of current and emerging technologies. Tune in now.
00:00:36
Speaker
Well, it's a pleasure today to data invite somebody onto this part who I think I've known for 20, 25 years or so in and around the industry. And not a lot of people know that I started out covering a lot of HR technology and HR outsourcing and things. And one of the key voices at the time was a guy called Jason Avenberg.
Jason's Career Journey and Insights
00:00:57
Speaker
This man has developed many startup companies and sold them off and built for real voice himself as one of the the eminent thought leaders in HR technology over the years. So maybe I'll head over to you, Jason. Can you just ah explain a bit to our audience about your background and maybe a little bit about what are the key issues impacting ah HR today that is consuming your time?
00:01:23
Speaker
Yeah, sure. So before I get too deep into the issues, I, you know, as someone, Phil, as you said, have been, uh, spent three decades doing this. I started when I was 19 implementing payroll systems on Dawson mainframe platforms.
00:01:38
Speaker
um you know all the way to you know but building one of the industry's first Windows applications for HR, joining PeopleSoft very early, um and then moving on to really help organizations understand the technology alone is not going to transform them, um but it's going to take a lot of other capabilities within that organization, Mindset, Skillset, and Toolset.
Challenges in HR Tech and Workforce
00:02:03
Speaker
um Today, when we work with HR organizations on a global basis, one of the things but ah about my role at Mercer is leading our capabilities globally, is that we have a lot of organizations that i I like to say have collected the dots and not connected the dots. So they've bought a lot of tech. They've implemented a lot of tech. They've used a lot of SIs to get this tech implemented.
00:02:31
Speaker
They've gone live, but at the end of the day, they're not seeing results. They don't have good data. And where we are from an AI standpoint, they're about to put a layer of frosting on top of a multi-cake. ah And you know what that's about to realize is we've got all this money spent. We've done all of these things, yet we're not seeing the ah ROI and therefore the the value of the investment of what we've done.
00:02:58
Speaker
So if I take that and combine it with HR issues, which are A, upskilling, reskilling, B, huge unlearning aspects needed when it comes to just how do we work and why are we here.
00:03:13
Speaker
And then the third thing is the pace of change and how do I keep up with the fact that I work in a profession that hasn't changed much for the last 30 years yeah and all of a sudden I'm seeing things change by the 32nd. So I've worked for the last five years on putting in place DEI initiatives and all of a sudden they're gone. ah I'm trying to attract a workforce that you know is that's going to stay for 18 months and I'm used to keeping them for 18 years.
00:03:42
Speaker
You know, it all of those things together that I just mentioned is a massive pot of change. Yeah. Wow. I mean, um, uh, you know, we only have to look at what's happened in the last two weeks to understand how much volatile changes going on in the world. But, um, yeah, as we look back at the corporate landscape, um, it's been seismic. I mean, um, what would you pinpoint then as the number one pain points that are hurting enterprises right now when it comes to the workforce issues?
00:04:17
Speaker
filled to me its agility. And I know that's an overused term, but because I've got so much technical debt, because I've got so much process, ah anarchy, and latency,
00:04:33
Speaker
I can't change fast enough and you know I can't change the workforce. I can't change my policies. I can't change my journeys to impact to the know I use this phrase with clients all the time. It's 2025 outside of work. What year does it feel like inside of work? Yeah.
00:04:51
Speaker
And just that, look in the mirror. It's 2025. How do I get stuff done outside of work? Ordering a pizza, ordering an Uber. How do I get stuff done inside of work? Go into a transactional system, hit save, and have no idea what happens next.
00:05:08
Speaker
That it the chasm is so so large and I've got so much debt. That I can't. Respond to the world that's going on outside of work fast enough and therefore I fall into the world of
Impact of Remote Work and 2020
00:05:25
Speaker
a relevance. Yeah and how much of this is exacerbated by remote working who are hybrid working is this is this really making this very very hard to manage or.
00:05:37
Speaker
So, Phil, I didn't even bring that up as to one of the trends because it's one of those things that is such a another. I mean, if I add a couple of trends onto the plate really quickly, that and the value of a college degree, that is also a math. And then, like oh, by the way, let's throw in skills.
00:05:58
Speaker
If I take those three, add it to everything we've just said, that's also on everyone's mind. So for example, return to office. When I've got a group of 20-year-olds who are as lonely as they've ever been before, I happen to hear your great podcast with Scott Galloway, you know who I'm a huge fan of, who talks a lot about male loneliness. um And loneliness is real. It's a real thing.
00:06:24
Speaker
and were return to office, I think we overlook the fact that it can help with loneliness. I think we're like, hey, we've got this real estate and we've got to use it. I mean, I think that's a low scoring game way to approach it versus thinking about the humanity that comes into play when I think about people working together and collaborating together.
00:06:49
Speaker
So, ah you know, 2020 just accelerated all of this stuff. fi It got us bought collecting more dots. It got us saying we can do everything from home. And then all of a sudden the societal and human impact of that we're just starting to see today.
00:07:06
Speaker
Yeah, and um I mean, I guess it's changing the whole concept of what is an employee versus what is a contractor. Like my company, we use some contractors who are fantastic. They behave like ah some of our best workers. and We have employees who on the whole are great performers, but occasionally you get some people who just think because they're an employee, they can redefine how they want to work with your organization. And it doesn't quite fit with where you're trying to go.
00:07:38
Speaker
um So how do companies fix their cultures? Because this to me feels like the core of all the problems here is what is defining an organization today? What is the reason to exist as a employee within a company? And what can leaders do about this? so So Phil, I think that one of the biggest things that we do as leaders in organizations, and I talk about this quite a bit, is we focus on change management and not change leadership.
00:08:08
Speaker
And when I when I say that that, it's not meant to be buzzwordy, but I see us creating these north stars, these visions, these, and let's you know, we ah there's so many phrases, employee value proposition, etc et cetera, et cetera, et cetera. This is what we stand for. This is what we believe in, et cetera, et cetera, et cetera. You know, I'll get a little old school with you, Phil. We put it on a mouse pad, you know, send it out to everyone so they can't forget it. Or we print it on the back of their badge.
00:08:38
Speaker
so they can't forget it but then what do we do we don't act. Like that in how we as leaders treat our people so yeah little example hey guess what i wanna know all your skills fill so that when you grow up i can move you into a job that matches where you're trying to go.
00:09:00
Speaker
All of a sudden the job opens up that matches where you're trying to go. And what do I do? I open a rack and bring someone in new instead of paying attention to you. That right there kills culture faster than almost anything in the world. Or, hey, Phil, go into the system of record and put in your skills.
00:09:21
Speaker
You know, and like, oh, by the way, you're already doing that on LinkedIn, but do it for me also in my system. And then guess what? We'll think about you in the next succession plan. What do I do?
Leadership, Culture, and AI Integration
00:09:33
Speaker
I don't even pay any attention to that data. I look at it once a year. I don't personalize the employee experience tied to it. And people are like, why am I giving you this data? You know, like it's an HR thing. yeah And by the way, no one trusts their HR department.
00:09:51
Speaker
So if you take all of that stuff together, it's the leaders of a business that are responsible for culture. It's the the the higher management and middle management that are responsible for culture. And Phil, one of the things I'm a little bit worried about, actually I'm a little more than a little bit worried about, is I start to see, and this happened to me three weeks ago when The Guardian put out the latest press release that said Microsoft introduces AI employees.
00:10:20
Speaker
And, you know, I had three CHROs email me that said, chief HR officers, email me and basically said, where do I put these people on the org chart? And how do I get them to understand the values? And I was like, what are you talking about? Like, literally what are you saying?
00:10:40
Speaker
Like your AI employees, they made, you know, first of all, they're not going to understand your employee. They're, they're not part of your culture, but they're going to impact your culture. If you don't talk to the workforce about how do I focus on what we think of as human machine teaming? Because all of a sudden your workforce is going to see them as threats and what's the workforce going to do? We're not going to use them.
00:11:08
Speaker
I'm sorry, I talk about the employees, the agents as them in this particular case, but I think that the AI world is going to threaten culture even more. So your question is so valid. It has to be delivered in every single message. What do we stand for? what are we What do we mean? And I'm going to show you, it's more than just talk, but it's action.
00:11:30
Speaker
That's right. and I mean, it was one thing 15, 20 years ago, talking to your employees about transitioning work, some of your work to people offshore or nearshore or whatever, that's human to human. Asking your staff to rewrite parts of their jobs and transfer them into a piece of software, I mean, it's unheard of. And if you start talking about bots and agencies, employees and humans,
00:12:00
Speaker
You're going to destroy your company very, very quickly. I mean, this is very much ah how do you build agentic systems where you have bots doing people's jobs for them, freeing them up to do more intelligent things without creating in terrible insecurity, anxiety, and I don't know, almost like anger against the employer. I mean, I'm her i'm hearing about revenge quitting is the as the thought of the year right now for what's going on in many organizations.
00:12:29
Speaker
Well, and and Phil, that's why when I was ah you know part of the Davos event in at the World Economic Forum, we talked a lot about this phobo, fear of becoming obsolete. And I think that it's so important that we, I use the term educate, not train, whether we educate people on the value that these tools can add if used. Now notice what I did.
00:12:58
Speaker
can add if used properly, not that are guaranteed to add by just buying them from Microsoft or pick your vendor, putting it in and saying, guess what, now we're done. So we that concept of human machine teaming is not just work design, it's also culture design.
00:13:21
Speaker
And it's making people feel comfortable that the purpose of these agentic systems, or let's not even get so technical in the way we say it, AI, is not to replace you, but to amplify you. And we're going to value you based on how you use these tools, not penalize you because, you know, we're going to get rid of half the workforce.
00:13:45
Speaker
Now, really quickly, Phil, I think we're gonna get rid of half the workforce. like i'm not you know I'm not Pollyanna like this and say, oh yeah, it's just like spell check. We're not gonna have any workforce reductions. Those people, once again, I'll go back to Galloway. He says it all the time. you know AI is not gonna replace people. It's gonna replace people that don't know how to use AI. yeah i yeah I agree with that, but I also think that the organizations have a responsibility to say how do I design work to leverage my people based on who I have and who I want in the best possible way.
Education and Employment Dynamics
00:14:21
Speaker
yeah you right so As we look at the next wave of talent coming into companies, is this where the change occurs? Because i mean what we're hearing about Harvard MBAs are getting rehired at the lowest rate ever right now. i mean You mentioned college degrees earlier, but are we producing people who are relevant for this corporate environment right now, or is there a growing disconnect that's happening?
00:14:48
Speaker
I think that the disconnect is huge, Phil. I have two boys, they're 20 and 17, and I'm scared to death. I cannot tell you that my first piece of advice is, you should go to college. and okay I mean, I think you should go to college to learn how to learn. I think you should go to college to learn how to become an adult, et cetera, et cetera, et cetera. But from a knowledge standpoint, it is impossible.
00:15:16
Speaker
It is impossible. And by the way, I teach at three universities and the tenured profs, they're teaching stuff that's irrelevant already. So, I mean, we have to think, we have it's a big hairy statement, but we have to rethink.
00:15:33
Speaker
education. We have to rethink education um because, you know, when you saw you saw the latest study, I think it came out a couple of weeks ago that 35 to 40 percent of people would rather hire a robot than a college grad.
00:15:47
Speaker
I mean, when you start to say that, you're like, it's not because they don't want people. It's not because they're trying to save money. It's because in this case, a robot, you know, with a little bit of knowledge, knows more and is ready to more ready to work than that college grad, based on how the college grad is coming out. And Phil, when I do teach,
00:16:09
Speaker
Last week, class I taught, every college grad that's looking for a job, it's, I mean, people say AI is going to impact the workforce. AI has already impacted the workforce because these college grads aren't finding jobs. Do you see that? I'm curious. I mean, tell me your thoughts on that because ah i't I hate to say this, but I think it's an elephant in the room that no one wants to see that the fact that the elephant's in there.
00:16:35
Speaker
What I'm seeing is companies right now, on the whole, are looking to do more with the people they've got and certainly not add more and more bodies into the mix. There's this sort of appetizer that's become more productive and scalable without adding oodles of additional people onto our needs, whether it's back office, front office.
00:16:59
Speaker
um there's a There's a big drop-off in hiring of college grads. We're seeing that everywhere. and The other thing I'm seeing is certain people past mid-career levels coming onto the workforce. and This has been a trend for a year now and I feel it's starting to accelerate where um people are very expensive and companies are seriously questioning the ah ROI of people.
00:17:25
Speaker
and the owners is now really moving on to employees to prove their value to the company. So, some people are going back into the office, getting their face in front of their bosses, trying to get more engaged um to drive innovation. um I'm seeing a lot of the under 30s going back to the office because they are lonely and they would rather get out of the house and meet other people.
00:17:49
Speaker
um And we are starting to see, I think, distinct trends in how companies are operating and how people are starting to operate. But I do worry for a large sector of the workforce of people sitting at home, they sit behind a keyboard all day, they get in angry, that they're not very engaged anymore with their companies.
00:18:10
Speaker
um you know Travel is up more than ever in the United States at it and it's people going on vacations. People are focusing much more on themselves, their own lives. I think work is taking a less important role in what they're doing in general.
Global Investment and Workforce Adaptation
00:18:27
Speaker
And this is why I think we're not just rethinking education. I think everyone's rethinking work. Like what do we generally need? How do we move forward?
00:18:35
Speaker
There's a huge appetite, for example, to invest in India, like I've never seen. You've seen these global capability centers growing at 20% a year um because you're buying talent in at a quarter of the cost and they're motivated. They have a work ethic and they're in an office and they're working together. And there's some big trends happening with the workforce and you're absolutely right. AI is already having its impact and it's exacerbating every generation um in many, many different ways. and How do we get ahead of it is the is the big challenge, big question. you know Phil, one other thing I just want to throw out, and I wrote a blog or a sub-stack piece about this ah you know on February 2nd, and it was about what I called retiring. I phrased it as, there are people in the workforce that are ready to retire and there's the need to retire the workforce.
00:19:28
Speaker
And I think that it's, mad I think this is a massive discussion because I'm running into 45 to 55 year olds who are like, this isn't going to affect me. i It's not going to affect how I work. It's fine.
00:19:44
Speaker
And then I'm running into another group of people who are, and and by the way, leaders and companies saying, we have to retire. Because guess what? We just got a foot of snow and the summer tires aren't going to work. We're going to have to put on the snow tires. And guess what? I have no one in the company that has snow tires.
00:20:02
Speaker
A lot of that is driven by AI and a lot of that is driven by mindset is, are we thinking about transformation or are we thinking about just kind of a status quo? And I think that inertia, I think it's a blockbuster video. I hate to call out a company. I probably shouldn't have done that. But I think it's a blockbuster video moment where we're we're going to watch. I think in the next five to 10 years, we're going to watch more companies go out of business or sell off.
00:20:32
Speaker
whatever they can and take the people into companies with the right mindsets. um You know, they're not going to sell off their hard asset. They're going to sell off their brains and move those brains into organizations that have cultures and that do have the right mindset to think about how to balance human machine teaming.
00:20:52
Speaker
Yeah, you're absolutely spot on, ah Jason. I think um i think i think the changes underway, companies who want to survive are getting smarter about their workforce. I, as a manager of a company of 75 people, we spend more time than ever dealing with people issues, and a lot of it's exacerbated by technology, remoteness, loneliness, motivation, these types of things. And there's always a point where it's like, um who is adding value? Who's adding the right attitude? And who is not? And and so much of his data attitude now, Jason. It's like, who do you want to work with? like you You want people around you who are collaborative.
00:21:34
Speaker
who aren't just working in this little silo, um who actually want to work with anyone that's changing in the world, who are doing ah boot camps to show how we're using tools like AI tools to be more effective in our jobs. so ah We're in the research business, so we've got all sorts of cool shit that we can use to get access to data better, produce charts better.
00:21:55
Speaker
um summarize and distill inside all types of things. But yeah it the collaboration is so important and what I worry about is exactly what Scott Galloway said, loneliness, people getting behind, hiding behind a keyboard on a screen all day. Like when does the manager become like a mentor for someone's mental health? But that's literally what's happening. It's like how do you get people in the right mindset?
00:22:20
Speaker
Yeah, and i and I hate to say, I mean, I saw, you you know, from a leadership standpoint, and not to go too deep into this field, I use three words, team, trust, and passion.
Leadership Principles and Economic Change
00:22:30
Speaker
I mean, always my whole career, I've used these themes these things. We are a team. The minute you're not on the team, you don't belong here.
00:22:39
Speaker
Trust. We have to trust each other. The minute there's trust broken, you shouldn't be here. you know and i have And then passion, the grit and the passion is so important because there's no way that I, as an organization of 85,000 people now, am ever going to teach people fast enough, all 85,000, the ability to pivot the way they need to. Impossible. Impossible.
00:23:07
Speaker
So if the passion's not there to be able to learn on your own, okay and if i'm not and ah as a company, if I'm not giving the the right fence or the right playpen in order to help me learn on my own, like I have a problem.
00:23:25
Speaker
you know And that problem is it the speed in which I laugh, Phil, that everything moves so fast, yet we're like, oh, well, we're not going to see the results of any of that stuff at work for 10, 15, 20 years. mean Anyone that thinks that is smoking something bad, because it's not going to work. like we we are We are very, very close to a point.
00:23:52
Speaker
where that transformation moment is going to set in, and it's going to be either really good or it's going to be really ugly. And you can take geopolitical things into account tied to this as well. I mean, when you start to add all of these variables together, like we are at a, you know, powder keg moment here, where you either are on board, or you should get off board.
00:24:17
Speaker
yeah Powder kick moment. You're absolutely right. And I've always viewed um economic recessions as times for real change. We haven't had one of those since 08 really. And one suspects with everything going on in the world right now, we could hit some global economic event in the next few months or a couple of years. And that will really change how companies operate. I think if you get some major economic force,
00:24:48
Speaker
companies are ready to make big changes and it might take something like that to drive some more severe changes in the organizations that that I worry about.
00:24:59
Speaker
You know, Phil, I think that you know one of the things I just wanted – I actually think that it it may not be an economic depression, but it might be a humanistic depression. And I think that the humanistic depression is tied to change. I think the humanistic depression is tied to technology. I think the humanistic ah depression takes into account.
00:25:21
Speaker
financial depression, but I don't think we just, or excuse me, recession, but I don't think we take all, we just look, I get really frustrated when the financial analysts say we're in a recession.
00:25:34
Speaker
Yes or no. what we had but what We've been waiting for a few years for a recession and one could argue whether we hit that point. ah I think that we are in a humanistic recession where people are scared for their jobs. They're scared around politics. They're scared about what's going to happen with technology and they're scared both upside about their parents. God bless if we still have them and downside about their kids and what their kids are going to do.
00:26:04
Speaker
And if we don't take that all into account when we think about this human at the center approach for work, I think we're leaving a lot on the table. Yeah. I think that's a fantastic way to look at it. um So um when we talked about HR 20 years ago, you probably remember a famous article. What was it? HR is Dead, a fast company article. um That had a lot of impact on the industry at the time. I think there was a lot of outsourcing going on in HR.
00:26:32
Speaker
um Just to sort of sum up our conversation, how has HR changed and um how healthy would you say the HR function is in organizations today as a result?
Future HR Focus Areas
00:26:44
Speaker
You know, Phil, i I and we break it down into three camps. The first camp is the HR function, which is a function that's really good at counting heads.
00:26:56
Speaker
The second camp is an ah HR function that's really good at making heads count. And the third camp, and it's a new camp, is really good at thinking about what the workforce of the future looks like, which is the concept of human machine teaming. So counting heads, making heads count, and then thinking about work design, which is human machine teaming. Most organizations, from a health standpoint, are beyond the head count stage.
00:27:25
Speaker
and in the early innings of making heads count. okay Now, you have to do all three, by the way. This isn't like a sequential thing. So when I say that, I think we're in the late innings of being able to get a head count report. Thank God, Phil, that I might know how many people I have compared to how many laptops I have. um Second, making people count.
00:27:50
Speaker
I think we're in the early innings, unfortunately. What skills do people have? How do I leverage them? How do I drive productivity, et cetera, et cetera? And then this new camp, which is human machine teaming, I think it's like the game hasn't started yet. So from an HR agenda standpoint, I think we've got massive opportunity.
00:28:13
Speaker
um you know And back to the we hate HR or is HR dead? yeah I can tell you at least with the last one, human machine teaming and the, am I making people count? If HR doesn't do it, the business is going to have to do it or the business goes out of business. ah Exactly. Well, on that note, I think ah we can walk away and think a bit more deeply about ah human machine teaming and the fear of becoming obsolete, Jason. and This has been a phenomenal conversation and it's been great catching up with you after all these years.
00:28:48
Speaker
And Phil, I just have to say I'm not blowing smoke. You do amazing work in the space. Love what you guys do. Love how you keep the whole industry on its transformation edge of the seat. And the one thing wherever I think about your firm, I call it relevant. Relevance. And I think that's the most important thing that any of us as humans or firms can be in 2025. So thanks for having me.
00:29:14
Speaker
Well, that's great. That's great. I'll take rev relevant as a great compliment. I appreciate it and look forward to the next time. Thank you, Jason. Sounds good. Thanks, Phil. Cheers.
00:29:27
Speaker
Thanks for tuning in to From the Horse's Mouth. Intrepid conversations with Phil first. Remember to follow Phil on LinkedIn and subscribe and like on YouTube, Apple Podcasts, Spotify, or your favourite platform for no-nonsense takes on the intricate dance between technology, business and ideological systems. Got something to add to the discussion? Let's have it. Drop us a line at From the Horse's Mouth at hfsresearch dot.com or connect with Phil on LinkedIn.