Newsletter #12 (December 16, 2024)
US household debt levels are scary, skills-based organizations like Canva, is HR a tough job, and 3d printing concrete Legos for the US Army
1. The amount of household debt in the United States is downright terrifying.
28% of US households are still paying off holiday gifts from 2023. Total debt levels for the American consumer are up $3.8 trillion since 2019 (pre-COVID, of course), and has more than doubled in twenty years. The latest Fed report showed total household debt has hit a record $17.94 trillion as of Q3 2024, with 3.5% of that debt in some stage of delinquency (or $627 billion). Yes, that’s billion with a B.
Inflation information and news has been everywhere since 2021. And we all have lived it since 2021. I mean, lived IN it. Groceries are off-the-charts expensive. Household costs are ridiculous (by every measure and meaning). Auto insurance has more than doubled. Vehicle costs have been up (and down in some cases) to the point where most people just cannot afford a brand-new vehicle.
While some people continue to borrow and spend like there is no tomorrow, other people are just trying to make do. In both cases, money is coming in and going out in a disproportionate amount, with more people using their credit cards to do their excess spending.
In fact, the average credit card debt is up about $1,500 per card since 2021, with the total amount of credit card debt hitting a record $1.16 trillion in Q3 2024. With this much total debt, one cannot help but be concerned that the amount of income needed to live (and splurge, occasionally) is becoming too much to bear. The amount of lift needed to pay down that debt at a time when incomes could be cut, or disappear entirely, should cause everyone to take a pause and look at their personal balance sheets. The spending of the COVID era may be coming to a halt, but in a disproportionate way.
2. Which brings us to this second point: our economy is out of whack.
SDH Services, United Language Group, John Deere, Cargill, and Tyson are among the latest companies announcing they are trimming back their workforce.
Job postings for many ‘white collar’ job functions appear to be down, per LinkedIn, while other industries literally cannot buy talent to fill long-vacant roles, such as auto mechanics.
So, what to make of this? The effects of AI (both real and imagined), overhiring during the COVID era, continued demographic degradation of skilled trades, the burden of college debt, and a number of other possible factors are all beginning to weigh on the once-roaring economy (which was at least partially fueled by record governmental stimulus). Simply put, it will take time for us to find out what is really happening. Is it time to sound the alarm?
3. Per a post on LinkedIn, HR is one of the toughest jobs that looks easy.
Horseshit. The post was, of course, savaged by the masses on Reddit. Had the post said HR is one of the mentally toughest jobs that looks easy, I could get there. Is HR tough? Yes. But give me a break: HR is NOT one of the toughest jobs out there (that looks easy).
Every job has its ups and downs, and yes, some jobs are tougher than others. But HR is NOT tougher than having to work in construction on a jobsite, NOT tougher than working on a fishing boat in Alaska in winter, and absolutely NOT tougher than working cattle on a ranch. Some people may look at those jobs and say they look easy, but I think most people would agree nothing about them looks easy to do.
HR likely looks easy to other people because HR has unfortunately engineered it to look that way. HR usually operates in the shadows, talks in corporate lingo, befuddles employees with insurance gibberish, and lacks the in-depth experience in the company they work at to convey to employees what they do. Face it: unless an employee asks for help from HR, they simply see someone who sits at a desk behind a computer and it is a mystery what they do.
If you want people to understand what you do in HR, tell them, show them, and do not sit behind a desk all the time. And for gosh sakes, don’t insult people by telling them HR is so much tougher than other jobs.
4. Not one to waste the skills of their employees, Canva has embraced being a skills-first company.
And they are reaping the rewards of doing so. Similar to a writeup I did in a previous newsletter, Canva recently featured in an article on HR Dive, talking about their Pathways program and their “skills passports”, which unlock their ability to move to new positions based on the skills they have, rather than the positions they’ve held. Embracing the thought that someone’s career moves around like a spaghetti noodle, rather than a straight line, is a different way of thinking about how to do business, but it is better way.
5. Oppositely, performance improvement plans (PIPs) are a terrible way of doing business.
I came across this recent Wall Street Journal podcast episode talking about the increasing use of PIPs in industry and how they are perceived by everyone, but more notedly, why they seem to be in use more now than ever.
Putting another excuse for layoffs aside (when PIPs are used en masse), I’ve written several PIPs over the years, and while some employees are successful in ‘surviving’ them, truth be told, the damage is done. There is a lot of pressure on the manager of the employee to ramp up the expectations during the administration of a PIP. The employee obviously has a lot of pressure on them to suddenly become successful.
With all due respect, if someone has not been properly managed, and the idea for a PIP comes up, do everyone a favor and just fire the employee with dignity and respect, or at the very least, have the courage to tell them it’s just not working out and let them explore a transfer (assuming other caveats are met). PIPs are just terrible for everyone involved. Retire the use of them, like Netflix did with a certain other company:
6. The Department of Labor does not know when to quit.
See what I did there?! In all seriousness, the DOL decided to appeal the overtime decision handed down by a judge in Texas. With a new administration being sworn in to the White House in January, this seems like a case of too little, too late. The DOL will likely swing the pendulum back the other direction in just a few short weeks, so I’m not sure what there is to gain here with this appeal.
I suppose continuing to fight is better than what Ohio State University decided to do after the November 15th ruling: Ohio State rescinds raises for hundreds of employees after judge overturns federal overtime rule | WYSO.
7. Kudos to Werner Enterprises for facing down their insurance costs in a different manner.
Werner Enterprises, a trucking company, recently announced it was going to be taking matters into its own hands after seeing their insurance costs more than double a few years ago, despite record low incidents at their company. The company is launching itself into a grassroots lobbying program to tackle insurance and lawsuit reform across the nation, having grown tired of the ever-growing costs of insurance and lawsuit awards.
I’m certainly not saying that companies who cause accidents who are proven negligible, or criminal, should not be held accountable, but there are absolutely frivolous court cases and insurance claims which should never be paid out or make their way to court. Caps to damage awards are necessary when it can be shown companies did everything right.
8. Jeff Bezos likes messy meetings.
I get what he is trying to say here. Scripted, staid meetings are boring, silly and inorganic. If you are meeting about, well, anything, there is a significant investment of time, money and gray matter being devoted to whatever the discussion is about, so make that investment worth it. Scripting out meetings, or the dreaded pre-meetings before the meetings, can limit the creativity needed to run a business and stifle innovation, which is basically what Bezos is saying. I can support this, when the situation calls for it. Sometimes, a little chaos can be good.
9. LinkedInLunatic of the Newsletter belongs to…..
……someone giving poor financial advice.
10. This group of incredibly smart people are building super-huge Legos® for the US Army.
I just thought this was super badass. Superstructure concrete Legos® that are 3D printed on the battlefield just seems very interesting to me, as while this project is focused on aiding the military, many such projects end up finding their way to the private sector.
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That’s it for now. I’ll be back in two weeks!
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© December 2024 Brandon Caldwell, all rights reserved. Hyperlinks are used frequently for proper credit to source material on respective websites, news articles, social media or other sources. Images are used with and in credit to rights reserved to their respective owner(s). While it can be a useful tool, no ChatGPT or other generative AI was used in the production of this newsletter. Opinions are mine and do not reflect the opinion or policy of others including employers past or present.