MESSAGE FROM OUR CEO’S DESK

If you want to know how far removed the Silicon Valley elite are from the reality of running a team, look no further than Sam Altman’s latest comments on "human energy."

Altman recently argued that we shouldn't worry about the environmental cost of AI because humans also take a lot of energy to "query." His logic? It takes 20 years of life and a mountain of food to make a person "smart," so really, a child’s development is just a long, expensive training run for a biological server.

Sam Altman. This is, quite frankly, the ultimate douchebag take.

When the person in charge of the world’s most powerful AI tool looks at a human being and sees an “inefficient meat computer,” we have a problem. This isn't just a weird analogy; it’s a window into a leadership style that is fundamentally detached from the reality of both the human experience and the people actually doing the work.

We’ve been repeatedly told by the tech gods that AI is a universal force that will replace entry-level talent, automate management, and disrupt hiring beyond recognition. BUT, as more data surfaces, that prophecy is starting to look more like a mirage.

Take IBM, for example. After a year of being the poster child for AI-driven displacement, they just announced they are tripling their entry-level hiring for 2026. Why the 180-degree turn? Because they hit the AI wall, showing that:

• Adoption is Lagging: It turns out that while AI can handle routine tasks (e.g. scheduling and data entry), it can’t handle the human side of the business, like customer interaction or knowing when a chatbot is hallucinating and stepping in to fix it.

• The Talent Pipeline is Hollow: You can't have seasoned directors in five years if you don't have entry-level humans learning the ropes today. Cutting juniors was a short-term stock play that created a long-term leadership crisis.

• AI Needs Supervision: IBM’s HR chief admitted that entry-level staff are now being hired specifically to "intervene" when AI falls short, meaning AI actually created a new need for human judgment.

So, here’s what I think: We cannot look to leaders who are as detached as Sam Altman from the human experience to give us the answers on how to build our cultures or lead our teams. Their reality is a spreadsheet; our reality is the messy, brilliant, "energy-expensive" process of being a HUMAN.

At People Function, we’re embracing the tools while rejecting the philosophy behind them. We use AI to save time, sure. But we lean on our expertise and knowledge to truly add value. No amount of "efficient compute" can replace the energy of a team that actually gives a damn about our clients and about each other.

Don't let the tech-bro narrative make you feel like your humanity is a bug. In this weird, automated world, it’s the only feature that actually matters.

ASK THE EXPERTS 👨🏻‍🏫

Over the next few issues of PFunc Pulse, we’ll tackle the most common compensation and review cycle questions, and share expert insights from our team.

Question: When should salary changes occur? Should they be part of performance reviews?

Answer: While on-the-spot raises are a quick win for morale, predictable, structured review cycles are the only way to scale fairly. Constant, one-off adjustments for role expansion are rarely sustainable; they burden the Comp team and often create accidental pay inequities.

According to the Payscale 2026 Compensation Best Practices Report, 51% of organizations cite balancing employee pay expectations with budget constraints as their top challenge. To manage this, the market is moving toward a median planned base pay increase of 3.5%. By batching these reviews into one or two set windows per year, you ensure that every increase is calibrated against the broader budget.

As for when to discuss raises, we advocate for a dedicated performance review first to focus exclusively on goals and growth. Then, when you discuss compensation later in the meeting or at a later date, explicitly link the numbers to the performance data. (When employees understand the "why" behind the increase, they’re significantly more likely to remain loyal to their employer.)

Navigating 2026 Market Realities

While promotions often justify immediate action, general market adjustments should remain part of your bi-annual audit. With 68% of executive leaders viewing compensation as a strategic lever, you must ensure that pay increases are an investment in your most valuable assets.

Read the Payscale 2026 Compensation Best Practices Report here to learn more.

Have an HR- or operations-related question? Submit your query here, which might be answered in an upcoming issue!

THE BRIEFING 🗞️

HR NEWS TO KNOW

The latest HR headlines and stories, curated with our perspective.

IT employees’ core responsibilities are shifting every 18 months, and traditional training cycles can’t keep up, Info-Tech’s IT Talent Trends 2025 report found.

• ↪️ PFunc’s Perspective:  To stay ahead of skill cycles, HR leaders should transition from static annual training budgets to micro-learning pathways and internal mobility programs that embed skill acquisition into the weekly workflow.

A judge upheld an applicant’s claim that Amazon administered a lie detector test, violating Massachusetts workers’ rights, by disguising it as a “workstyle assessment,” according to HR Dive.

• ↪️ PFunc’s Perspective: Build better-structured interview processes that allow humans to assess character, skill, and aptitude to avoid similar legal risks.

A couple other HR stories to check out:

• Pressley.House.gov: A group of lawmakers introduced the BE HEARD Act to prevent workplace harassment after the Trump administration eliminated EEOC guidance, which we covered in Issue #22.

• HR Executive: Trader Joe’s, Google, and Stanford University named top employers in the U.S., Forbes reported.

WHAT’S HAPPENING IN AI

Here’s the latest AI news to know and why it’s important to HR.

Employees spend up to six hours a week fixing “workslop,” aka poorly generated AI output, according to Zety.

• ↪️ PFunc’s Perspective: By accepting subpar AI output, leaders are corroding long-term trust and employee morale just to meet deadlines (yikes). Two ways to mitigate this:

  • 1. Never allow AI-generated content to be the final version of any internal or external deliverable without a named human owner.

  • 2. Make it clear when content is AI-generated. For example, by adding an internal tag.

COMPLIANCE CHECK

Stay ahead of HR compliance as these latest updates take effect.

• Federal (effective 3/1/26) - Employers operating a MEWA that provides medical benefits must file Form M-1 with the EBSA, reporting the arrangement’s structure and federal compliance.

• Federal (effective 3/2/26) - Employers that physically file ACA information returns must submit Form 1094-B (under 50 FTEs) or Form 1094-C (50+ FTEs). (The deadline for electronic filers is March 31.)

• Colorado (effective 3/2/26) - Employers must individually provide Form 0995 to each new hire and all employees annually, in paper or electronic form.

THE OPPORTUNITY EXCHANGE 📈

ROLES ON OUR RADAR

The PFunc job board is packed with open roles across our client companies, making it easier than ever to tap into our network.

This week, we’re highlighting three roles at Inspiren, a senior living care platform and longtime People Function client.

• Principal Perception Hardware Engineer - Lead the design and execution of Inspiren’s camera-based sensing systems.

• Product Marketing Manager - Translate market insights into compelling product positioning.

• VP of Security, IT & AI Enablement - Own end-to-end platform security while building and scaling a high-performing security team.

See a role you’re interested in? Reply to this email and we’ll try to connect you with the hiring team. Hiring for an open role yourself? Reply to have your job featured in an upcoming PFunc Pulse issue.

TALENT SPOTLIGHT

A warm introduction to a hiring manager can make all the difference between landing your next role and continuing the search. As an HR consulting firm, we’re committed to helping our community get hired and grow their careers. That’s why we created a PFunc Talent Network, and we’d love for you to be part of it!

Join the Talent Network here (it’s free!). Whether you’re actively exploring new opportunities or happily employed but open to the right fit, becoming part of our network ensures your profile is shared with recruiters when roles align with your experience, skills, and career goals.

If you’re interested in being featured in a future “Talent Spotlight,” be sure to sign up to be a part of the Talent Network and reply to this email to let us know.

RECOMMENDED RESOURCE💡

Check out this resource, vetted and recommended by us.

HubCap Solutions - This HubSpot support partner offers hands-on execution and strategic guidance to maximize your HubSpot investment, and because People Function is working with them, we’re confident recommending them to fellow HR leaders.

INSIDE PFUNC HQ ⋒

CLIENT CORNER

We’re pumped to welcome a new wave of companies across industries, stages, and cities to the PFunc Family.

• Coder - People Function and Coder reunite as the open-source platform goes global.

• Erthwrks, Inc. - Erthwrks is an Austin-based environmental services company providing nationwide and international on-site air emissions testing.

• Taylor & Miller Architecture and Design - This architecture firm embraces “whimsy and rigor” for its design projects that span residential and commercial work.

WHERE TO NEXT?

Our team is always on the move, popping up at the HR events, conferences, and summits we actually love.

CHRONICALLY ONLINE📱

For your enjoyment, our team answers an “insane” HR question. 😬

@peoplefunction

You’d be surprised by how often this question is asked! 😅😭🙄 #humanresources #hr #corporatelife #manager

Join 100,000+ followers across PFunc’s Instagram, TikTok, and LinkedIn, hailed as “the best HR social accounts online today.” 😉

STAY IN TOUCH 💌

If you’re interested in fractional HR support for your team, reply to this email or contact us to learn more about our offerings, pricing, and how we can support your growing company.

🗣️ Thoughts, feedback, requests? Let us know! 🗣️

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Every Tuesday, the PFunc Pulse drops the HR news and compliance updates you actually need. Emma also shares her unfiltered brain-dump on the trends keeping CEOs awake at night, served with the practical wisdom of a founder who’s seen it all. Real talk for better people decisions, week by week. (P.S. Do your work bestie a favor and forward this!)