Thinking About Retraining? Consider The HR Department

If you’re tempted by the prospect of a dramatic post-pandemic career shift, human resource management could be a rewarding and lucrative way to go.

According to data collected by job site Indeed, recruitment posts advertising for human resource professionals in the U.S. have leapt by almost 47% compared to a pre-Covid-19 base rate, indicating that demand for people working in the profession is scaling a record high.

The trend is likely being fueled by a host of factors. Job openings across all professions have hit a record high as the economy continues to recover from the pandemic, and the need for workplace experts have also never been higher as many employers grapple with the changing demands of individuals.

A recent PwC survey found that the past year has inspired many employees to reconsider their values and make major changes to their personal lives. That in turn has affected how they want to work and what they need in order to be productive. It’s not incumbent upon employers to be able to design and foster a workplace that can meet those needs and requirements.

The latest official data published earlier in June showed that U.S. job openings rocketed by nearly one million to a new record high in April. But it also showed that more people voluntarily left their employment.

Overall, Indeed found that job postings across almost all sectors have now recovered to above the pre-pandemic baseline. Goods-related sectors, including manufacturing, loading and stocking, and construction have seen particularly strong growth, while jobs in sectors like hospitality, tourism, and sports are in some cases still below the baseline from February 2020, before the pandemic began.


Innovation Without Borders

This report is the first in a series that explores the innovative potential arising from the global movement of skilled workers and examines the implications for CEOs and policymakers.

We’re often led to believe migration is a drain on the country’s resources, but Steve Jobs was the son of a Syrian migrant. Apple… only exists because they allowed in a young man from Homs.
– Banksy

Apple’s iPhones, Tesla’s cars, and Pfizer’s RNA-based COVID-19 vaccines are some of the everyday innovations that change our lives for the better. But they carry a greater significance as well. Each one was conceived by a small team of boundary-breaking inventors who share something in common: these innovations were driven by immigrant founders—people who had crossed physical borders before advancing the boundaries of what’s possible for all of us.

Of course, the migration of creative geniuses has been a global phenomenon for centuries. Inventor Galileo Galilei and composer Frédéric Chopin, for instance, moved to Florence during the Renaissance and fin de siècle Paris (respectively) not only because those cities were hubs of commerce but because they were also melting pots of people with bold ideas.

Decoding Global Talent, Onsite and Virtual
Winning the ’20s in an Accelerated Post-COVID World
Decoding Global Talent
Humans cross borders, and humans create boundary-breaking innovations. Could it be that those two events are intricately linked and generate opportunities—in terms of both economic value and human values? We think the answer is yes, which raises the next questions: What if we could develop strategies to tap into and share these opportunities? Which legitimate concerns would we need to address? And which long-held beliefs would we need to reconsider before starting the journey?

Migration Impacts Innovation, Growth, and Culture
Humans crossing borders invariably create global networks. By migrating, people connect the new contacts they form in their destination countries with the ones in their communities of origin. Seen from this vantage point, people do not merely leave one country and arrive at another; they bridge the two. This matters because networks are powerful conduits of capital, knowledge, ideas, and ideals.

The economic and social impacts arising from these global networks have been well established by academics and studied by practitioners, but they are not yet widely known. (See “Definitions.”)

We explore the ripple effects of these impacts, wave by wave, in broad strokes, while keeping in mind that the reality and perception of global migration depend on context and are multifaceted. (See Exhibit 1.)

In the first wave, immigrants drive innovation in both destination and origin countries. The extent to which this happens varies greatly across countries, but it’s fair to say that most places see a gap between the promise of such induced innovation and its realized potential.

Destination Countries. Immigrants drive innovation either directly, through entrepreneurial or inventive activity, or through their close collaboration with native workers in companies of all sizes. As the global leader in attracting skilled foreign talent, the United States provides a good magnifying glass to examine migrants’ entrepreneurial and inventive activity.

On the company level, 45% of all Fortune 500 companies were founded by an immigrant or the child of an immigrant, and 50 out of 91 startup companies worth more than $1 billion had at least one immigrant founder. As of today, more than 3 million immigrants (skilled and unskilled) have become entrepreneurs, creating a total of 8 million jobs.1 Immigrants also contribute significantly to economy-wide innovation: since the 1970s, about 30% of all increases in per capita productivity in the US can be traced back to immigrants innovating closely together with locals.2 Countries in Europe and Asia see similar patterns, though at somewhat lower magnitudes.

Indeed, immigrants tend to increase productivity in most countries around the world, largely because of the diversity of perspectives, experiences, and ideas that they contribute when working closely with locals in companies in their destination countries. These innovation-inducing effects are mostly—if not exclusively—driven by skilled talent.

In addition to driving innovation, immigrants also trigger innovation by increasing the spectrum of consumer tastes and needs that companies can serve. The story of Richard Montañez, a PepsiCo janitor and the son of a Mexican immigrant, illustrates this nicely. Following the temporary breakdown of a machine that dusted the cheese-flavored snacks the company made, he added flavors inspired by Mexican street food to the bare chips—and instantly realized he was on to something. Recognizing an opportunity to create a product that would appeal to his own demographic, he pitched his idea to the CEO of PepsiCo and thus invented a best-selling snack, Flamin’ Hot Cheetos, which has since grown into a multimillion-dollar franchise for PepsiCo.

Origin Countries. Migrants also generate powerful, yet largely overlooked, innovation effects in origin countries. Leveraging global networks, migrants often reinvest capital in, and transmit productive ideas to, their countries of origin. Migrant diaspora networks can thus drive capital accumulation, innovation, and catch-up growth in origin countries.

The IT industry in India, for instance, owes its existence in no small part to Indian-born talent that returned home after education and work abroad, notably in the US. Consider Faqir Chand Kohli. After obtaining a degree from MIT and working in Boston, New York, and Canada, he took the lead at Tata Consultancy Services, building it into India’s largest IT service company.

India’s universal digital-passport system Aadhaar, a vast digital database powering government and private-sector services, is another example. The system was conceived by a team that returned to India from Silicon Valley under the project leadership of Nandan Nilekani, a cofounder of Infosys. Similar stories abound about the tech industry in other countries as well, including Egypt and Nigeria. They also arise in the automotive industry—in Turkey and Vietnam, for example.

These stories are not just anecdotal. There is clear causal evidence that countries tend to develop new companies and industries as a direct result of having created migration networks with people in places that already possess the latent knowledge required to build such value-creation steps. In other words, a country is much more likely to start producing a certain product from scratch if a destination country of its emigrants excels in producing that product. Especially skilled migrants reduce transaction costs between their host and home countries by creating two types of channels. The first is an information channel that allows for an increased flow of goods and foreign direct investment. The second is a knowledge diffusion channel, whereby emigrants convey such assets as technological knowledge, norms, and know-how, thus fueling homegrown production.

In the second wave, we see broader economic growth effects beyond those achieved directly through innovation.

Destination Countries. Immigrants in destination countries constitute a sizeable work force. They fill labor shortages and, perhaps counter-intuitively, drive up wages for domestic workers. Working for wages many times higher than those in their origin countries, migrants create significant demand for goods and services, thus fueling economic growth in destination countries. Strikingly, migrants also tend to moderately increase the wages of the locals they work with. Because more diverse teams are often more productive, they tend to bump local workers into communication and oversight roles, which are usually better compensated. While there are certainly instances of job competition between native workers and immigrants at the lower end of the skill spectrum, the overall effect on job creation and wage levels tends to be positive.

Origin Countries. Just as in the first wave, positive effects of migration also emerge in origin countries. Direct cash remittances are the most well known: in 2020 alone, migrants sent home $660 billion.3 These remittances, among others, are a highly effective means of supporting investments in education, especially for women, thereby contributing to growth in origin countries.

What’s more, successful skilled emigrants often serve as role models in origin countries—a phenomenon that showcases the value of education. This increased perception of value motivates families and individuals to make deeper investments into education, which leads to a better-educated population—which, in turn, increases economic growth.

In the third wave, migrant networks can be conduits of social norms and values. Yet, while migrants certainly influence the cultures of destination countries, they seem to create a more significant impact on the cultures of origin countries. Consider author and human rights activist Zahra Hankir, for example, born in Lebanon and educated in Beirut, Manchester (England), and New York. Upon the publication of her book Our Women on the Ground: Essays by Arab Women Reporting from the Arab World, she was seen as one of the early proponents of women’s rights, giving a voice to an often-unheard segment of the population. Migrant networks have shown the potential to promote democratic norms in origin countries because destination countries have higher rates of democratic participation and greater gender equality.

A Vision of Prosperity and Peace
So, what would happen if more people crossed borders? Excitingly, this is not only a question of economic value but also one that touches on human values.

We live in a world in which the movement of people is much more tightly restricted than capital and goods are. As a result, the number of people around the world who would like to move and work abroad, if they could, is vast: from 750 million to 2.5 billion people, or about 50% of all people of working age.

From a purely economic point of view, removing a restriction—even one that was introduced with the good intention of protecting local markets—is bound to increase overall economic output. (This is the reason countries agreed to remove many limits to trade and capital flows.) The question then is, by how much would that output increase?

The estimated numbers are extraordinarily large. If, theoretically, all restrictions to labor mobility were removed, then the world could see an increase in global economic output of up to $95 trillion per year. 4 (See Exhibit 2.) That staggering number is roughly equivalent to the size of the world economy today and is no doubt a high-end estimate, since it includes the benefits of relaxing restrictions for unskilled, as well as skilled, people. With a number that large, even conservative estimates of the benefit of relaxing restrictions for a subgroup, such as skilled workers, are sizable. For example, even if skilled workers were to drive only 20% of the benefit (it could be much higher), the annual opportunity would become approximately $20 trillion—about the size of the entire US economy. While these figures are based on models, and estimates vary, one thing is clear: potential economic benefits on the order of trillions of dollars per year should be very carefully weighed, and new strategies to achieve them should be designed, before they are dismissed as unattainable.

Is a world that tightly restricts the movement of billions of people a just world? What is clear is that origin matters much more than it used to centuries ago, thanks in large part to the Industrial Revolution. Today, about two-thirds of all economic differences between any two randomly chosen human beings on the planet can be explained simply by asking one question: Where were you born?5
Philosophers may disagree about whether notions of fairness and solidarity that apply on a national level can be extended to a global level. However, the fact that birthplace largely determines a person’s economic life trajectory is—and feels—arguably unjust for those on the losing end of the spectrum. Migration, therefore, reflects the choice of an empowered individual to reject the lottery of life at birth and move to a place that promises opportunity. People who vote with their feet can challenge and put limits on the power of nation states, which are the ultimate actors in the arena of global public policy. This explains in part why countries have been hesitant, unlike on trade, to pursue a global agenda on this matter.

Migration is therefore a direct way to advance equality of opportunity for individuals. But global migrant networks have another intangible benefit on an aggregate level: they build mutual dependency and thus contribute to a more interlinked, peaceful world built on shared interests.

The seemingly inconsequential act of crossing borders thus holds a dual promise that intricately links both economic value and human values: global prosperity and peace.

Challenges and Constraints
Today, this dual promise seems far out of reach. Global migrant networks are relatively small in size, their immediate benefits are unequally distributed, and views on the merits of migration are politically polarized and highly contested.

In what may be a surprise to residents of such metropolises as Berlin, New York, Paris, and Shanghai, global migrant networks are not very large in size. In 2020, only around 3% of the world’s population, or about 200 million people of working age, lived in countries other than where they were born (this figure even includes the millions of post–Soviet Union residents). Of those, only about 50 million people are skilled, which means that one of every four global migrants has at least one year of university-level education.

To put these numbers in context, let’s compare them with global trade. As a share of world GDP, global trade has increased by about 20% since 2000 and remains at high levels: $53 trillion, or about 60% of world GDP, in 2020. In contrast, global migration flows as a share of global population have stagnated since 2000. Despite an increase in absolute numbers (from 25 million in 2000 to 35 million in 2020), even the fastest-growing segment of international migrants—skilled inflows to OECD countries as a share of the skilled population—has declined in relative terms since 2000.

Globally, five countries have attracted more than 50% of all skilled immigrants in the past decade: in descending order, they are the US, the UK, Germany, Canada, and Australia. Meanwhile, skilled emigration is becoming ever more widespread as more people gain digital access and achieve the financial means to move. As a result, about 25 countries have a surplus of skilled talent, while at least 64 have a deficit. Interestingly, some countries—including Brazil, China, Japan, and South Korea—are far less integrated into the global flow of talent than one would expect, given their level of development.

While global migration flows have the potential to generate circular benefits, it’s clear from these numbers that countries and companies start off facing vastly different conditions and a very unequal playing field. (See Exhibit 3.)

Within countries, a similar unequal picture emerges. Skilled talent tends to cluster in large cities (even though the numbers have probably decreased as a result of the pandemic). This is especially true for skilled migrant talent, where the top three largest cities reliably attract more than 50% of skilled inflows.6 Skilled migrant talent also clusters heavily in the software, technology (they constitute about 11% of total employed working-age professionals in science and engineering in the European Union), and health care sectors (about 10%).7 While market forces certainly contribute to these results, such a disproportionate distribution of scarce resources is evidence of corporate-level obstacles that currently constrain wider adoption.

Global migration flows are inherently fragile. This may be surprising because public support for immigration has been steadily increasing in many countries, including Europe and the US, since 2000, reflecting a generational change in a wide set of attitudes. Support for skilled immigration is even higher—at 78% or more—for the top receiving countries: the US, the UK, Germany, Canada, and Australia.8
However, these averages hide considerable polarization along political party lines between the left and the right. As a result, governments can find it politically advantageous to enact immigration policies that do not fully reflect the will of a majority of voters. Over the years, such polarization can lead to wide variations in the development and execution of migration policy, especially in two-party systems, thus driving political uncertainty.

Why does migration polarize voters so much? People’s support or resentment for migration correlates with how they perceive their own economic outlook and social status, and with their level of concern for border security, cultural cohesiveness, and the implications for fiscal balances.

While it’s natural for people to see immigrants as potential rivals in the struggle for jobs or government support programs, the data tends to show that immigrants actually create jobs and—with few exceptions—raise local workers’ wages. Effects on fiscal balances can be positive or negative depending upon the demographics of migrants as well as their employment status. Due to constraints in the availability of data regarding some countries, the facts for North American and a few European countries tend to be much better understood than for other regions, and lessons from one context are not easily applied elsewhere.

But economics isn’t everything. Trade, technology, and the quest for sustainability change the job profiles of millions of local workers and, as a result, profoundly affect our notions of social status and societal appreciation. Therefore, policies on these matters, and on migration, must also address the urgent need for upskilling, economic support, and the social elevation of those who contest these changes.

Three Fresh Perspectives
Let’s zoom out. If the inherent promise of global migrant networks is so big, and the reality so wanting, why is there no action on this front? Why is there no discernible joint agenda, however loosely coordinated or defined, that aims to embrace this potential while respecting voters’ concerns, worries, and fears?

Evidently, formulating such an agenda is difficult—and is made even more difficult because of countries’ different starting positions and values. What’s more, given that there is no globally recognized institution with a mandate to propose a way forward, developing such an agenda will require leadership from within the system. Complicating the creation of a harmonized policy agenda even further, migration involves people with varying levels of education who choose to move because of many reasons: to flee from warfare, to reunite with families abroad, to study, or to work. And that raises perhaps the most striking point: though the group of skilled people who move for work is the least politically polarizing group of migrants, no agenda exists to tap into the potential that they offer.

Why is that so? In the societies and companies that are already most open to skilled migration for work, we often come across three basic common beliefs:

All: “What’s a brain gain for us (destinations) is a brain drain for others (origins).”
Policymakers: “We need skilled immigration to fill labor market shortages.”
CEOs: “We see global talent as a source of advantage, and we celebrate its diversity.”
All three of these statements contain a grain of truth. Yet they are also incomplete because they prevent us from grasping the true strategic potential. We base this view on our own research; on discussions with leading academics in the field, policymakers, and CEOs; and on our experience in building digital solutions that support the bridging of continents by global talent to fuel corporate innovation. (See “For Further Reading.”)


Worries about brain drain are the number-one reason why leaders do not actively embrace the movement of skilled people but take a reactive approach instead.9 Here is why this concern is largely unwarranted.

It’s true that excessive emigration of skilled workers at levels greater than roughly half of the entire population can be harmful to origin countries. Encouragingly, only 12 of 195 countries, typically island states in the Pacific or Atlantic oceans, see such elevated levels of emigration. It’s also true that the emigration of workers in certain occupations, such as medical doctors, is a clear net negative for origin countries—especially if they have a shortage of such workers. Fortunately, these occupations can be precisely defined and are also a small share of all skilled workers.

As a result, the emerging consensus among academics is that skilled migration is rarely a brain drain and can be structured in a way as to become a win for all parties involved. This is mainly because of the previously overlooked large, positive innovation- and growth-stimulating effects of skilled diaspora networks sending capital, knowledge, ideas, and ideals back to their origin countries.

Consequently, we should see skilled migration not as a game of winners and losers, but as one in which all can win—like global trade. This change in perspective would give leaders in both destinations and origins the headspace to shift their approach. They could thus move away from tactical responses and toward strategic approaches to jointly shape the opportunity.

To embark on this agenda, the key question to explore is, What exactly makes border-crossing valuable, and how can the sharing of benefits by both destination and origin countries be ensured?

Many policymakers in OECD countries proclaim that skilled immigration is the answer to labor market shortages. While well intended, this viewpoint is incomplete and thus ineffective. Here’s why.

First, a labor market shortage today may be a surplus tomorrow. Due to technological and social change, jobs that urgently needed to be filled decades ago, such as those in metals and mining in Europe, are now fading away. Today’s labor market shortages in basic digital software engineering may also prove to be temporary, as artificial intelligence and no-code tools slowly but steadily become available to the general public. Second, this view is a purely resource-based, economic one. It fails to resonate with voters on an emotional level, unlike the way matters of justice and geopolitical stability do. In addition, it underappreciates the contribution of skilled immigrants, who do not just fill jobs. Rather, as they work together with native-born teammates, they generate creative surpluses that directly benefit their colleagues, their companies, and society.

Consequently, policymakers would be well advised to see the true contribution of skilled immigrants not in terms of just getting a job done but as contributing to a more dynamic, vital society. This includes immigrants’ entrepreneurial activity, direct and indirect creative contributions, and the effect on economic growth of their own domestic consumption and taxes.

The key question to explore from this perspective is, How can policymakers stimulate broad-based economic vitality, and what new policy practices could be adopted and scaled?

The idea that global talent is a source of tactical advantage is already fully embraced in the digital and tech world. It’s also becoming more popular with established companies seeking to transform digitally. The view has clear merits, but it may overlook the broader strategic opportunity. Here is why it is incomplete.

Some leading companies today, such as e-commerce player Zalando, hire and relocate globally. Others, such as General Electric and Samsung, also engage through more flexible, virtual setups. Both practices evidently work well for companies seeking to populate hard-to-fill positions. But does this tactical advantage also work as a long-term strategy? In our experience, global talent is often more mobile than homegrown talent, so any advantages gained through availability or lower cost could prove to be only temporary.

Instead, CEOs may wonder whether there could be a much bigger, durable strategic advantage in building teams composed of talent from various countries of origin. BCG research shows that such teams produce more functional diversity, and that functional diversity not only correlates with innovation but actually causes it.

Some iconic corporate innovators today owe their inception and a share of their enduring success to their foundational embrace of a broader social purpose. Think of Patagonia, for example, which was established in 1973 with the clear intent to protect the environment. Or Tesla, a company that, through its own investments and boundary-shifting storytelling, is credited for advancing the electrification of mobility by two to three years. Is it conceivable that one day we will see companies strategically embracing the cause of global equality?

The key question to explore is, Why does it matter for CEOs, for which businesses in particular can it become a source of strategic advantage, and what can leaders do now?

We propose that CEOs and policymakers take four actions now, in order to tap into the large potential created by humans crossing borders:

Start from the top. Begin by focusing on migrants who have either a university education or vocational training—even though it’s not easy to do, in practice, and it limits the overall promise. Because this agenda will affect at least 1.9 billion skilled people in 2050, it is both globally inclusive and one that respects legitimate concerns among vulnerable groups in destination countries.10 In parallel, continue the urgent political and operational efforts to safeguard the livelihoods and dignity of refugees and undocumented migrants.
Create win-wins. Close the innovation and growth loops between countries of origin and destination countries by designing multilateral policies, firm engagement, and technology to digitally accelerate the circular flow of ideas, capital, and ideals.
Strive for vitality. As a policymaker, keep an eye on today’s and tomorrow’s local labor market needs, but make sure to recognize immigrants and your own diaspora of emigrants as sources of dynamism and vitality. The diversity of immigrant inflows and of emigrant outflows then becomes a key lever to increase the innovative potential inherent in both in a politically sustainable way.
Innovate to lead. As a business leader, recognize and act on the immediate talent advantage inherent in global talent pools—but do not stop there. Embrace cultural diversity and the functional diversity it brings to jointly solve hard problems of discovery in innovation. And if you believe that talent is universal, but opportunity is not, ask yourself whether this is a cause that you, as a business leader, would want to lead.
Time to Elevate the Agenda
The movement of people across borders is as intricately linked with human existence as is the movement of goods—trade. Yet until now, people crossing borders have received less strategic attention from the business community than the movement of goods.

As we show, people crossing borders create vast global networks that already drive innovation and growth in both destination countries and origin countries. Yet these networks remain comparatively small in size; they’re not equally distributed around the world; and voters’ support for more open migration policies remains fragile and highly contested. As a result, the latent potential to drive shared economic value and create a more balanced world based on human values remains unfulfilled.

The world needs a new engine of growth and geopolitical stability more than ever. We think it’s time to elevate the potential of people crossing borders and to explore fresh ways for governments and business to work together for the benefit of all.


Five Ways to Empower Managers to Lead Compensation Discussions

At any stage of the employee lifecycle—from talent acquisition to performance management—compensation is always top of mind. While exciting perks garner initial excitement, the key to engaging and retaining talent begins with greater transparency and understanding around compensation.

Research shows that many employees lack a clear understanding of their total compensation package. In fact,’s 2020 Pay Practices and Compensation Survey revealed that more than 74% of respondents said that the managers at their organizations are not formally trained to talk with employees about how their compensation is determined.

We already know that managers are the key to employee retention and development—particularly when it comes to ongoing performance management—but without trust and communication, there is a higher risk of churn and disenchantment. In this article, we’ll share five tips to help you empower managers with the tools and knowledge to engage in meaningful compensation conversations.

Why managers are the key
HR professionals don’t have the time or bandwidth to have individual compensation conversations with every employee in their organization. As a result, managers are critical in cascading this information throughout the company. However, most managers don’t feel equipped to speak to their organization’s compensation strategy—let alone unpack the particularities with each of their team members.

Further, their lack of confidence makes these discussions awkward and uncertain, often leaving employees more confused than before. Without manager buy-in, the compensation process remains a black box. When employees are told no with avoidant explanations like, “I wanted to give you more but HR told me I couldn’t,” this builds distrust and increases the likelihood of turnover.

When managers are equipped to have these conversations and deliver a clear response to employee questions, not only will the broader workforce feel a greater sense of alignment with the process, but it will be easier to coach them toward their ultimate performance goals.

5 ways to support manager compensation discussions
Managers have their plates full. Balancing coaching with their own work, many don’t have the time or desire to unravel the intricacies of their organization’s compensation practices. Consider the following five ways HR teams can help reduce the learning curve and empower managers to have meaningful compensation conversations with their direct reports.

Increase transparency and communication
If you haven’t already, it’s critical to document your organization’s compensation philosophy or strategy. This could include equity within team, competitive market data, clear position leveling, and how promotion decisions are made in relation to performance.

If it’s challenging to document it, it’s no surprise that your managers and employees alike have a hard time understanding it. It’s imperative to create concise and digestible resources that clearly articulate your compensation strategy. Then, make yourself available to answer questions as managers cascade this information out to their teams—whether through training, info sessions, or easy-to-use tools.

Share more data at every level
Employees can’t buy into your compensation strategy if they lack visibility. Compensation planning software puts the data directly into the hands of your employees. Both employees and managers should have clear visibility into market data, compensation ratios, turnover risk, performance data, compliance flags, and salary history. This levels the playing field and ensures that no one feels misinformed about their compensation or the decision-making process.

Make the conversation year-round
As organizations move toward a more continuous performance management model, compensation should be a part of that discussion. Regularly touch base on compensation bands, changes in market data, and career growth opportunities to ensure your team stays informed.

Provide a breakdown of total rewards
Many employees are unaware of the planning and resourcing that goes into crafting a compensation package. Compensation extends far beyond just salary, so it’s critical to clearly break down the full value of each benefit. Tools like Compright make it simple to visualize and understand the specific components that make up each unique compensation package, so employees can see the full value of their rewards.

Share the reasoning behind decisions and opportunities for growth
Managers should be empowered to answer tough questions about why their reports make the amount they do and how to progress in their roles. This includes honest conversations about the path to promotion, merit increases, and bonus payouts. Honesty and transparency are key—be honest if someone is close to maxing out their pay in their range so you can work together to take steps toward a promotion. When you show your employees you truly care about their development and compensation growth, they will be more motivated to do better.

Compensation conversations build trust
With the right training and enablement, managers are well-positioned to confidently explain and take ownership of compensation decisions. Instead of a one-way conversation, democratizing compensation data enables more meaningful discussions between managers and their direct reports, which ultimately builds trust. With this approach, teams experience improvements in engagement, performance, and retention.


What’s the true cost of conflict?

Recent research, however, suggests that they probably should. A report published by Acas, ‘Estimating the Cost of Conflict’, suggests the UK’s conflict bill adds up to a staggering £28.5bn per year; that’s an average cost of £1,000 per employee.

Of course, it’s not just the pure financial cost of conflict (legal fees, compensation awards, settlement agreements) that need to be taken into account. There are a significant organisational and human costs too.

Managers spend an inordinate amount of time dealing with issues, but to what ends? Productivity within warring teams takes a nose-dive, customer service suffers and corporate reputations are damaged. The management norms of extensive inaction or expensive overreaction are being highlighted to be woefully ineffective, costly, and damaging.

For every pound spent dealing with workplace disputes, you will also find a broken person, and a broken relationship. Employees, who are often dragged through damaging and divisive disciplinary and grievance procedures, become stressed and distressed, and often end up going off sick. The ACAS report suggests 900,000 people took time of work last year due to a workplace conflict.

There’s a wider impact on the whole team too. Colleagues may merely be bystanders to a dispute or a falling-out between peers, but they are also affected by it, often feeling upset on behalf of their team-mates and losing motivation.

Good people leave, because they can’t face another day in a toxic atmosphere. ACAS suggests that the cost of replacing staff who have been impacted by conflict adds up to £2.6bn per year.

So why don’t we pay more attention to what conflict is costing the business – and what is the best way to go about measuring the impact?

Ignorance is (n’t) bliss

There are a number of reasons why organisations don’t attempt to put a price on workplace conflict. Sometimes, it’s because the leadership team is disonnected from the reality of what it’s really like to work in the business and aren’t aware of the disputes that are bubbling beneath the surface, stealing management time and affecting productivity.

Often, it’s because it all feels a bit too difficult. Despite a growing emphasis on evidence-based HR, people practitioners often lack the skills to extract and analyse relevant data, much of which may already be sitting in their HR systems, ripe for the taking.

My experience suggests that there is also sometimes a reluctance within organisations to scratch too deep beneath the surface, for fear of what they might find. Shoving a toxic environment under the carpet is, however, rarely a helpful approach. As many employers have found, issues have a nasty tendency to rise to the surface and spread themselves over the pages of the press.

It all adds up to a situation where UK leadership fails to treat conflict as a strategic priority and to put the necessary steps in place to prevent, resolve and transform conflict at work. Relying on outdated HR policies and failed management systems is not good enough.

I have seen better strategies for ordering paperclips than I have for managing this complex and costly issue. If organisations are going to get the issue of conflict resolved, our leaders must begin treating it as a strategic priority.

Making conflict a strategic priority

If organisations make the effort to understand the nature, extent and impact of workplace conflict, it will help them develop meaningful strategies to deal with it – and to make the business case for any HR or L&D interventions that may be needed to tackle it.

Valuable baseline data will also allow them to evaluate the ROI of those interventions – which might include anything from training in conflict management for line managers through to establishment of an internal mediation scheme or use of external mediators.

Identifying what to measure is the first step. Costs associated with conflict tend to fall into three categories – visible costs, hidden costs and intangible costs.

Visible costs: These are easier to measure and will deliver quantitative data. You may have access to much of this information already, as part of existing processes. We’re talking here about issues like how much management time is spent wading through formal procedures – and the associated opportunity cost (i.e. what they could have been doing instead). Sickness absence levels and costs associated with staff turnover (cover, hiring replacements) also come under this category. And of course there are the legal and tribunal fees, if situations have been allowed to escalate to this level.
Hidden costs: These are often harder to measure and call for a range of approaches. The impact of conflict on employee engagement/staff satisfaction comes under this heading, as well issues like reduced productivity and impact on the overall customer experience.
Intangible costs: These are often the human costs of conflict and they can be hard to quantify. I am a huge fan of using storytelling to help gather this data. Gathering employees ‘stories of conflict’ can be a useful way of demonstrating the intangible impact. Presenteeism, insomnia, stress, reduced morale and reputational damage all come under this heading.
Capturing the data

There are five distinct ways of gathering the relevant data. Each of them involves listening to what your people are saying:

Desktop research will help you unearth statistics around the level of grievances, disciplinaries, or bullying and harassment allegations. Stress audits and employee engagement surveys are also useful sources of information. You might also want to look at data gathered from appraisals, exit interviews, or customer complaints processes.
Surveys will allow you to get feedback on the experiences of those who have been part of grievance, bullying or discrimination processes. These often produce more valuable data if they are conducted anonymously. Depending on the size of the organization, you could opt to survey a sample, or the full workforce.
In-depth interviews with senior leaders and front-line roles from across the business will help you assess the extent of the conflict issue. It’s worth also including union reps, occupational health professionals and representatives of equality or diversity groups if you have them.
Focus groups, involving a wide cross section of stakeholders can generate valuable data – and will also send a message to employees about your commitment to listening to them and valuing their views and experiences.
TCM’s highly acclaimed Conflict Calculator™ allows organisations to analyse a sample of their complaints, grievances or team conflicts and come up with a mean cost. The tool can be modified to suit the needs, circumstances and context of the business.
Putting it all together

Once equipped with all the information, you will be able to look at any trends or patterns that are emerging, identify any gaps in the data and begin to think about a strategy for managing conflict more effectively going forward.

Many of the organisations we work with have found that taking this approach, and understanding the true cost of conflict, has acted as a catalyst for shifting away from formal procedures and towards more informal, ‘resolution first’ approaches.

As Peter Drucker famously said: “If you can’t measure it, you can’t improve it.”


Why Do Board Directors And CEOs Need To Value UN Sustainability Goal five? – Achieve Gender Equality And Empower All Women And Girls

Gender Equality as defined by WorldVision is “Girls are born with the same God-given rights as boys, and that needs to matter – everywhere. Societies with greater gender equality enjoy more sustainable development, faster economic growth and better prospects for their children. Yet in many places, discrimination and violence against girls and women is still rampant.”

Despite decades of progress, gender equality has not been achieved. Women continue to be marginalized on many levels, pay gaps, equal opportunities for promotion, and imbalances in society.

While progress has been made, the numbers from groups like UN Women research has over a billion women don’t have the same employment options as men. At the current rate, it will take about a century to close the global pay gap.

There are so many reasons why we need to get this right.

When women receive the same education and job opportunities as men, they can improve any organization they join.

There is no end of progressive research studies that show that diversity and inclusiveness of all types (gender, race, sexual identity, etc) increases an organization’s productivity and innovation. One University of California study looked at big companies in the state with some women in the top leadership positions. They found that they performed with more women in senior leadership positions than the companies with mostly men at the top.

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The McKinsey Gender and Diversity research completed in 2019 analysis found that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile—up from 21 percent in 2017 and 15 percent in 2014.

The most important point however is that accelerating more diversity and inclusive and equity for women drives a bottom line improvement in economic performance. In OECD countries, if the female employment rates were raised to match Sweden, it would lead to a GDP increase equivalent to $6 trillion. Gender pay gaps end up costing the economy.

How AI can help close the Gender Equality Gap?

1.Using AI to detect and analyze unconscious bias in unstructured text.

AI change maker, The Text IQ Unconscious Bias Detector uses advanced capabilities for understanding, categorizing and analyzing unstructured information to detect patterns of bias in performance appraisal documents. The machine learning model identifies potential bias in categories such as race, gender, ethnic origin and age and provides detailed reporting on the types of language used by reviewers within different populations. Organizations can then mitigate this hidden bias through education, coaching and redesigned processes based on rigorous assessments and easy-to-understand examples.

2. Applicant Tracking Systems that Value Diversity and Equity

Ideal’s DEI Intelligence product has the ability to use AI and machine learning to enrich and infer demographic data from existing systems of record (payroll, applicant tracking and other human capital management systems) to reveal actionable insights throughout the talent lifecycle. HR professionals can use these insights to uncover potential inequities in talent decisions such as job hires, promotions, career paths, and more. Also essential is Ideal’s ability to report on DEI performance and progress at the organization-level, which will be beneficial for C-level executives.

3.Ryerson University – Diversity Institute Builds Robust Survey Tools and provides Gender Equity Gap Closure Solutions

The Diversity Institute, founded by Dr. Wendy Cukier, has a track record for innovating and developing solutions to support businesses to close the gender equity gap. Stories told by employees form a rich base for applying different machine learning methods to mine for sentiment, analyze text to form a cultural risk assessment are all powerful ways to help close the gender equity gap. You will want to follow Dr. Wendy Cukier’s research and practical gender equity solutions to help companies crack the UN sustainability goal #5 challenge.

4.AI Algorithms risk reinforcing cultural biases

Below is an excerpt from Stanford University Research paper discussing When good Algorithms Go Sexist (March, 2021)which is one of the best summaries I have found highlighting the risks of AI in perpetuating gender bias from large gender bias datasets.

For example, some 300 million fewer women than men access the Internet on a mobile phone, and women in low- and middle-income countries are 20 percent less likely than men to own a smartphone. These technologies generate data about their users, so the fact that women have less access to them inherently skews datasets. Even when data is generated, humans collecting data decide what to collect and how. No industry better illustrates this than health care (another industry with gender imbalance among leadership): Men and male bodies have long been the standard for medical testing. Women are missing from medical trials, with female bodies deemed too complex and variable. Females aren’t even included in animal studies on female-prevalent diseases. This gap is reflected in medical data.

Data that isn’t disaggregated by sex and gender (as well as other identities) presents another problem. It paints an inaccurate picture, concealing important differences between people of different gender identities, and hides potential overrepresentation or underrepresentation. For example, few urban datasets track and analyze data on gender, so infrastructure programs don’t often factor in women’s needs.

Even when representative data points do exist, they may have prejudice built-in and reflect inequities in society. Returning to the consumer credit industry, early processes used marital status and gender to determine creditworthiness. Eventually, these discriminatory practices were replaced by ones considered more neutral. But by then, women had less formal financial history and suffered from discrimination, impacting their ability to get credit. Data points tracking individuals’ credit limits capture these discriminatory trends.

Labeling of data can be subjective and embed harmful biases and perspectives too. For instance, most demographic data end up labeled on the basis of simplistic, binary female-male categories. When gender classification collapses gender in this way, it reduces the potential for AI to reflect gender fluidity and self-held gender identity.

Relatedly, the Gender Shades research project found that commercial facial-recognition systems used image data sets that lack diverse and representative samples. These systems misclassified women far more often than men. In particular, darker-skinned women were misclassified at an error rate of 35 percent, compared to an error rate of .8 percent for lighter-skinned men.


Board directors and CEOs need to accelerate their knowledge of AI and appreciate how AI can be used to solve the number five sustainability challenge of closing the gap on gender equity. AI solutions can help detect unconscious bias, but AI can also pose a major risk to gender equity advancement, unless all companies designing and developing AI models audit carefully for data bias in their data sets. This is an area of major ethical and equity concern as more skilled data assembly experts to validate and even audit the data sets will increasingly be needed.

As board directors and CEO’s look to modernize their organizations, and much progress has been made on gender equity in many industries, there still requires a vigilant and progressive leadership priority of all companies, irrespective of their size.

More Information:

The United Nations developed in 2015 the Sustainable Development Goals as an universal call to action to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere. The 17 Goals were adopted by all UN Member States in 2015, as part of the 2030 Agenda for Sustainable Development which set out a 15-year plan to achieve the Goals.

To see the full AI Brain Trust Framework introduced in the first blog, reference here.

To learn more about Artificial Intelligence, and the challenges, both positive and negative, refer to my new book, The AI Dilemma, to guide leaders foreword.