00:00First, I just would love to get your first reaction to this jobs report we had.
00:03Yeah, it's a little bit under expectations for sure.
00:06We expect it better.
00:07I feel like watching the labor market right now is a little bit like watching a World Cup game
00:11where maybe your team's winning.
00:13You're like up 2-1, but you're really bored and a little bit worried.
00:16And that's what's happening with the labor market.
00:19Hiring is up, but attrition's still down.
00:22It's actually been going down for like the past 26 months.
00:25And what that tells us is that workers are just not finding the confidence to make jobs switches just yet.
00:32And I think we're just going to need a little bit of more month of good news for that to
00:38change.
00:39So, yeah, a little bit halted in the enthusiasm after the last couple of months.
00:44It does feel that it's just been so much churn of a good month followed by a bad month.
00:48I mean, the prior three were quite strong.
00:50I wonder what you make of just like the volatility in the data
00:53and what that says about where we are in the economy right now.
00:55Yeah, there's been a lot of back and forth.
00:58And even when you look through to the three big numbers,
01:01so BLS came in at 60, we came in at 250, even ADP at 100.
01:07Those are wide margins.
01:09And it tells you that, you know, there is uncertainty about the exact state of the world.
01:15And it's also a month where these numbers are coming out really early.
01:18But if you go over the past three months, I think the trajectory is upward, like we just heard as
01:24well.
01:26And there is a little bit of thawing.
01:28And employers are looking to rehire again after this very, very long period of really no hiring at all.
01:35There's also been this huge outstanding question, just how much AI is impacting this labor market.
01:40It's something that you and the team at Reveglio have been studying.
01:42What are you seeing in the data in terms of is it actually impacting the labor market?
01:47Is there less hiring because employees are getting replaced with AI?
01:50Is there more?
01:51Where has the data landed you?
01:53Yeah, it's the million-dollar question, isn't it?
01:55And it's really interesting in this jobs report, actually, that we are seeing professional and business services to be up.
02:00So that tells you that maybe the AI story is playing out a little bit differently than the public debate
02:06is currently raging.
02:07We just published a study just this week showing that companies that are adopting AI really heavily are actually some
02:15of the fastest-growing companies.
02:17And they are adding, in particular, entry-level jobs.
02:20And across the boards, across engineering, sales, and marketing roles, really.
02:25So it shows that the companies really that are adopting AI heavily, and by that we mean they're spending a
02:32lot.
02:32We're talking about coding agents here.
02:34We're talking about really like expert use of AI.
02:38And these are the companies that are still growing compared to companies in a similar group but that haven't yet
02:45adopted AI as heavily.
02:46And that just shows you that AI adoption and employment growth can coexist.
02:52I don't think it rules out the fact that, you know, AI might displace some workers here and there.
02:59But it is a very encouraging sign, I think.
03:02I just wonder, because one of the theses that seems to have emerged in recent weeks and months is just
03:06how expensive computers, how expensive it is to run some of these AI systems.
03:10And maybe SAP, obviously not an American company, a German one.
03:14I wonder if this is just something that we might see more of, basically saying we're spending a lot on
03:19AI, so we want to pull back.
03:20They're pulling back on travel spending, on new hiring, basically saying the only hiring we are going to do at
03:25the moment is for AI-related jobs.
03:27I wonder if you are seeing this pivot from companies being like, this stuff is expensive.
03:30It doesn't mean we pull back on hiring, but we're cutting basically everything except things that are additive to AI.
03:36Yeah, it's interesting.
03:36It's like, use AI, but wait, not that much, right?
03:39Exactly.
03:40Yeah, I think that is a pattern that we're seeing.
03:43And it's probably also why we're seeing this counterintuitive result in our data that entry-level hiring is going up.
03:51I think with the technology that it's looking like now, you know, before it was sort of chatbots, now we're
03:56really talking about coding agents and sort of an advanced level.
04:00And for that, you need two things.
04:01You need people that know how to deal with that technology.
04:04And I do think that tends to be the digital natives that are a little bit younger.
04:09But at the same time, these models produce so much output and so much just volume of new things that
04:16you also need people that are really experienced and know what they're doing and sort of are looking through all
04:21of this output.
04:23So I think you're just seeing hiring across the board, both on the expert level and on this entry-level
04:30role that knows how to deal with this.
04:32How does this look when you break it down by industries?
04:34Are there any industries, I mean, I'm assuming like tech, but, you know, software, finance, any ones that kind of
04:40stand out in this trend?
04:41What is really standing out is how uneven adoption is across industries.
04:46So information is just by far the biggest adopter.
04:50I think 60% of companies in our sample adopting.
04:53And then it goes down pretty, pretty steeply, obviously manufacturing some of the lowest generative AI adoption, which makes sense.
05:00And it's just highly correlated with where AI is creating the most value in terms of adoption.
05:07That point you made about entry-level workers, I think, is pretty interesting because a lot of people said those
05:11are the ones that are going to be replaced by AI.
05:15Does the nature of what exactly they're looking from, though, from an entry-level worker, has that changed the profile
05:21of the person that's being hired?
05:22We are seeing that essentially across the board, leadership qualities are being looked for more increasingly.
05:29And empathy and experience and all of these things that are a little bit more uniquely human that perhaps the
05:38current entry-level cohort of students that grew up in COVID had a little bit less opportunity to develop.
05:46So it might just take a little bit longer for this cohort to really settle into the labor market.
05:51But I do think AI is a technology that settles, that levels the playing field in terms of ramping on
05:58people and getting to more of an expert-level worker, essentially.
06:05So I think in another state of the world with a little bit more confidence, we could just see entry
06:11-level hiring actually really, really pick up again.
06:13So I think it's a really good question.
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