Revised Jobs Data, AI Investments, Remote Work Trends, and Supply Chain Woes

[00:00:01] [SPEAKER_00]: It's Monday, August 26th, 2024, and I'm Dave Solman.

[00:00:05] [SPEAKER_00]: Three things to know today.

[00:00:07] [SPEAKER_00]: Revised US job growth data shows a loss of 818,000 jobs as remote work declines but

[00:00:14] [SPEAKER_00]: stabilizes above pre-pandemic levels.

[00:00:17] [SPEAKER_00]: Small business optimistic about 2024 despite slower MSP revenue growth, and everybody's

[00:00:23] [SPEAKER_00]: eyeing AI investments.

[00:00:25] [SPEAKER_00]: And post-pandemic supply chain woes, the bullwhip effect driving inventory swings as companies

[00:00:32] [SPEAKER_00]: are seeking stability.

[00:00:34] [SPEAKER_00]: This is the Business of Tech.

[00:00:38] [SPEAKER_00]: Revisions to the US job growth data revealed a loss of 818,000 jobs from April 2023 to

[00:00:45] [SPEAKER_00]: March 2024, prompting criticism of the Federal Reserve potentially being late in

[00:00:51] [SPEAKER_00]: cutting interest rates.

[00:00:52] [SPEAKER_00]: Despite the revisions, the unemployment rate remains low and the Biden administration

[00:00:57] [SPEAKER_00]: emphasizes ongoing job recovery.

[00:01:00] [SPEAKER_00]: The revisions, the largest in 15 years, highlight challenges in assessing the labor

[00:01:05] [SPEAKER_00]: market growth post-pandemic.

[00:01:07] [SPEAKER_00]: Economists suggest that slower job growth should influence future rate cuts with

[00:01:12] [SPEAKER_00]: expectations for a September decision from the Fed amid a cooling labor market.

[00:01:18] [SPEAKER_00]: And the share of job listings offering remote or hybrid work has declined from its peak

[00:01:23] [SPEAKER_00]: in 2022 but remains higher than pre-pandemic levels, with 7.6% of listings by July 2024

[00:01:31] [SPEAKER_00]: compared to over 10% during the hiring frenzy.

[00:01:35] [SPEAKER_00]: The decline reflects that weakening job market and indicates remote work is stabilizing

[00:01:40] [SPEAKER_00]: at a new normal.

[00:01:42] [SPEAKER_00]: A survey by Great Place to Work reveals that remote workers are significantly more

[00:01:46] [SPEAKER_00]: satisfied and engaged than those required to return to the office, with RTO mandates

[00:01:52] [SPEAKER_00]: negatively impacting employee retention and morale.

[00:01:56] [SPEAKER_00]: Employees who can choose to work their environment where they want are three times

[00:02:00] [SPEAKER_00]: more likely to stay with their company, with those facing RTO policies 14 times more

[00:02:06] [SPEAKER_00]: likely to consider quitting.

[00:02:09] [SPEAKER_00]: And tech companies are backtracking on return-to-office mandates, with only 3%

[00:02:13] [SPEAKER_00]: enforcing full-time attendance, down from 8% last year.

[00:02:18] [SPEAKER_00]: A majority at 79% now offer flexible working arrangements and over half at 56% have adopted

[00:02:24] [SPEAKER_00]: an employees' choice model.

[00:02:27] [SPEAKER_00]: Notable firms like Dell and Google faced backlash over strict RTO policies, indicating

[00:02:32] [SPEAKER_00]: a shift toward hybrid work models despite previous predictions of a full return to

[00:02:38] [SPEAKER_00]: the office.

[00:02:39] [SPEAKER_00]: And speaking of jobs, AI is predicted to transform over 92% of technology jobs, this

[00:02:46] [SPEAKER_00]: coming from the NAI-enabled ICT Workforce Consortium, which also highlights significant

[00:02:51] [SPEAKER_00]: changes in roles across seven job families, particularly in business management, design

[00:02:57] [SPEAKER_00]: and user experience.

[00:02:59] [SPEAKER_00]: Key skills needed include AI ethics, prompt engineering and machine learning, while

[00:03:04] [SPEAKER_00]: Basic programming and manual tasks are expected to decline in relevance.

[00:03:09] [SPEAKER_00]: European IT professionals express uncertainty about detecting AI misinformation, with 19%

[00:03:15] [SPEAKER_00]: lacking confidence in their own abilities and 20% in their company's capabilities.

[00:03:20] [SPEAKER_00]: From ISACA's recent 2024 AI Pulse poll, 62% believe AI will positively impact audit

[00:03:28] [SPEAKER_00]: roles with concerns about privacy and security persisting.

[00:03:31] [SPEAKER_00]: The demand for AI training is evident, as 86% of respondents anticipate needing it within

[00:03:38] [SPEAKER_00]: two years.

[00:03:40] [SPEAKER_00]: Now why do we care?

[00:03:41] [SPEAKER_00]: For providers, this uncertainty translates to a potentially more cautious approach from

[00:03:46] [SPEAKER_00]: clients in terms of investment and spending.

[00:03:49] [SPEAKER_00]: Companies may hesitate to commit to long-term technology investments until more economic

[00:03:54] [SPEAKER_00]: stability exists.

[00:03:56] [SPEAKER_00]: Enterprises and educational institutions must invest in training for AI and update

[00:04:01] [SPEAKER_00]: their curriculum, while workers should pursue lifelong learning to stay competitive.

[00:04:06] [SPEAKER_00]: That said, I'm not dooming loom here.

[00:04:09] [SPEAKER_00]: The data is all pointing as things as level.

[00:04:12] [SPEAKER_00]: The demand for secure, efficient and scalable remote infrastructure will persist, and

[00:04:17] [SPEAKER_00]: providers can differentiate themselves by offering solutions that enhance remote collaboration,

[00:04:22] [SPEAKER_00]: data security and productivity.

[00:04:24] [SPEAKER_00]: Considering how much this continues to be a struggle, there's room for this offering.

[00:04:31] [SPEAKER_00]: Are you and your clients tired of the time-consuming ticket tennis of coordinating meetings and

[00:04:38] [SPEAKER_00]: help desk calls?

[00:04:40] [SPEAKER_00]: Wouldn't it be better to automate this process with a tool that connects directly

[00:04:45] [SPEAKER_00]: to ConnectWise Manage or AutoTask?

[00:04:48] [SPEAKER_00]: TimeZest offers scheduling automation that gives you complete control of your schedule

[00:04:54] [SPEAKER_00]: and eliminates the hassle of calendar ping pong.

[00:04:57] [SPEAKER_00]: As the only service designed specifically for MSPs, it integrates into your workflow

[00:05:03] [SPEAKER_00]: and makes scheduling appointments easy on you and your clients.

[00:05:08] [SPEAKER_00]: Plus, you can try TimeZest for free.

[00:05:11] [SPEAKER_00]: Visit timezest.com slash MSB radio and use the code MSB radio to get 10% off your

[00:05:19] [SPEAKER_00]: first year of TimeZest.

[00:05:23] [SPEAKER_00]: Global spending on artificial intelligence is projected to exceed $632 billion by 2028,

[00:05:31] [SPEAKER_00]: driven by rapid adoption across various industries, including finance and software services

[00:05:37] [SPEAKER_00]: per a new forecast from IDC.

[00:05:39] [SPEAKER_00]: The annual growth rate is expected to be 29%, with software accounting for over

[00:05:45] [SPEAKER_00]: half of the spending.

[00:05:46] [SPEAKER_00]: Despite challenges in implementation, organizations are increasingly recognizing the value of

[00:05:51] [SPEAKER_00]: AI in enhancing business outcomes and customer engagement.

[00:05:56] [SPEAKER_00]: And despite slower revenue growth for managed services providers, 90% of small businesses

[00:06:01] [SPEAKER_00]: are optimistic about achieving their goals this year, with many planning to invest

[00:06:05] [SPEAKER_00]: in marketing and technology.

[00:06:08] [SPEAKER_00]: American Express's Amex Trendex Small Business Edition reports finding that younger

[00:06:14] [SPEAKER_00]: business owners, those Millennial and Gen Zs, are cautious with spending and are

[00:06:18] [SPEAKER_00]: more likely to embrace AI for various applications, believing it provides a competitive edge.

[00:06:24] [SPEAKER_00]: AI usage is prevalent in analyzing customer data and automating tasks, highlighting opportunities

[00:06:30] [SPEAKER_00]: for managed services providers to offer AI-related services to small businesses.

[00:06:36] [SPEAKER_00]: Why do we care?

[00:06:37] [SPEAKER_00]: While the overall revenue growth for providers may currently be sluggish, the shift toward

[00:06:43] [SPEAKER_00]: AI adoption could open up those new revenue streams.

[00:06:45] [SPEAKER_00]: The prevalence of AI in analyzing customer data and automating tasks suggests a growing

[00:06:51] [SPEAKER_00]: demand for AI-driven solutions among small businesses.

[00:06:55] [SPEAKER_00]: The American Express report highlights that many small businesses are investing in marketing

[00:06:59] [SPEAKER_00]: and technology.

[00:07:00] [SPEAKER_00]: For providers, it suggests that marketing AI-related services should be a priority.

[00:07:05] [SPEAKER_00]: Educating small business owners on the practical benefits of AI, such as improved

[00:07:10] [SPEAKER_00]: efficiency, enhanced customer insights, and better decision making, can drive adoption.

[00:07:14] [SPEAKER_00]: And despite the optimism around AI, the reality of implementation can be complex.

[00:07:20] [SPEAKER_00]: Organizations often face challenges related to integration, data quality, and understanding

[00:07:25] [SPEAKER_00]: AI's full capabilities.

[00:07:27] [SPEAKER_00]: Providers can differentiate themselves by selling AI-based solutions and offering

[00:07:32] [SPEAKER_00]: end-to-end support, from planning and deployment to ongoing management and optimization.

[00:07:36] [SPEAKER_00]: And it all starts with AI governance.

[00:07:41] [SPEAKER_00]: I want to highlight the Axios MacBro newsletter, which discusses the ongoing economic challenges

[00:07:47] [SPEAKER_00]: stemming from the pandemic, highlighting the bullwhip effect in supply chains that's

[00:07:52] [SPEAKER_00]: led to significant fluctuations in output and inventory.

[00:07:56] [SPEAKER_00]: It notes that companies are still adjusting to new demand levels, with recent layoffs

[00:08:00] [SPEAKER_00]: not necessarily indicating a recession.

[00:08:03] [SPEAKER_00]: Here's a quote from the article.

[00:08:05] [SPEAKER_00]: In the aforementioned beer game, often used in business school operations classes, sometimes

[00:08:11] [SPEAKER_00]: substituting a less intoxicating product like candy, different teams represent different

[00:08:16] [SPEAKER_00]: points in the beer supply chain – retailers, distributors, manufacturers, and so on.

[00:08:22] [SPEAKER_00]: The upshot is that because each node on the chain seeks to maintain adequate inventories

[00:08:27] [SPEAKER_00]: and has limited information on what is going on at other points in the chain,

[00:08:31] [SPEAKER_00]: huge swings in supply occur until the teams figure out how to find a steady equilibrium.

[00:08:39] [SPEAKER_00]: In the real-life economy, companies have spent decades learning those lessons and

[00:08:43] [SPEAKER_00]: adopting technologies and practices to mitigate the bullwhip effect, but the pandemic blew

[00:08:48] [SPEAKER_00]: them up.

[00:08:50] [SPEAKER_00]: Why do we care?

[00:08:52] [SPEAKER_00]: I'm giving you a mini-MBA lesson today.

[00:08:54] [SPEAKER_00]: How often do we talk about the supply chain?

[00:08:57] [SPEAKER_00]: But maybe you don't quite understand the problem.

[00:08:59] [SPEAKER_00]: The balance of the supply chain is what's so critically important, and notably those

[00:09:04] [SPEAKER_00]: in IT have that supply chain too.

[00:09:07] [SPEAKER_00]: We have it on both hardware and software.

[00:09:09] [SPEAKER_00]: There's only so much AI capability right now in capacity, particularly when we consider

[00:09:14] [SPEAKER_00]: GPUs on the backend.

[00:09:16] [SPEAKER_00]: I wanted to share this for those like me who didn't go to business school.

[00:09:20] [SPEAKER_00]: This is a very tangible, understandable way to consider the supply chain in miniature.

[00:09:27] [SPEAKER_00]: With as many breaches and security concerns as I report in this show, it should be obvious

[00:09:33] [SPEAKER_00]: that cybersecurity is not just about technology, but also the human expertise needed to interpret

[00:09:39] [SPEAKER_00]: and respond to complex threats.

[00:09:42] [SPEAKER_00]: Huntress is focused on elevating SMBs and MSPs around the world.

[00:09:47] [SPEAKER_00]: Huntress has a suite of fully managed cybersecurity solutions powered by a 24x7

[00:09:52] [SPEAKER_00]: human-led SOC dedicated to continuous monitoring, expert investigation and rapid response.

[00:09:59] [SPEAKER_00]: And the proof is the execution.

[00:10:02] [SPEAKER_00]: Huntress is the number one rated EDR for SMBs on G2.

[00:10:07] [SPEAKER_00]: Want to know more about the platform?

[00:10:09] [SPEAKER_00]: Visit huntress.com slash MSP radio to learn more.

[00:10:15] [SPEAKER_00]: Thanks for listening.

[00:10:17] [SPEAKER_00]: It's National Dog Day and also National Cherry Popsicle Day.

[00:10:21] [SPEAKER_00]: Oh, and it's National Toilet Paper Day, but most importantly, Women's Equity Day.

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