The United States is in the middle of a talent crisis. For those skeptics who feel all the commotion about worker shortages is mostly hype, essentially given the deluge of layoffs resulting from the recent financial crisis, there is just too much wind in the Perfect Labor Storm sails to ignore what is happening. The numbers speak for themselves.
Copyright (c) 2008 Success Performance Solutions
The United States is in the middle of a talent crisis. Not a day goes by that we are not reminded about our aging workforce and the imminent departure of millions of retiring baby boomers from the workforce with critical knowledge and skills. The 500 largest companies are expected to lose 50 percent of their senior management in five years and the average tenure for U.S. employees is only three years.
For those skeptics who feel all the commotion about worker shortages is mostly hype, essentially given the deluge of layoffs resulting from the recent financial crisis, there is just too much wind in the Perfect Labor Storm sails to ignore what is happening. The numbers speak for themselves.
Every hour nearly 330 baby boomers turn 60. That's 7,920 every day. Baby boomers, who in 2006 ranged in age from 42 to 60, currently represent one-half of the U.S. workforce. By 2015 all of the baby boomers will be 51 to 70 years old. This represents 50 percent of all managers and 45 percent of all professionals (doctors, accountants, lawyers).
The number of people in the U.S. over 55 years old will increase 73 percent by 2020. The number of workers age 55 and over is growing four times faster than the workforce as a whole while the number of young replacement workers between 35 and 45 years old will increase only 5 percent. The population is aging. Jobs are changing. The result is a growing mismatch between available jobs and skilled workers.
Skills workers. A well-run business needs a strong, talented workforce. Despite recent layoffs and the highest unemployment rate in 5 years, nearly every business is still unable to fiill at least one key position due to the scarcity of talented workers. These shortages are stifling business plans resulting in delayed or cancelled implementations.
The shortage of workers has shifted from a lack of available "bodies" to a serious shortage of workers with needed skills. As recently as the early 2000s, the U.S. Bureau Labor Statistics estimated a shortage of over 10 million workers by 2010 to fill available jobs. I suspect this number is now a bit high due to a combination of automation and job exportation. But this doesn't make the problem any less serious. As our economy shifts from an industrial basis to one of service and knowledge, the basic requirements to qualify for a job have gone up - way up.
Jobs requiring only a GED or High School degree are disappearing. Jobs requiring at least a 2-year certificate or degree are nearly doubling. The dearth of managers prepared to move up into leadership roles is both eye-opening and mouth-dropping. As recently as 1991, fewer than 50% of U.S. jobs required skilled workers. By 2015, it is estimated that 76% of U.S. jobs will demand highly skilled employees.
Ultimately, sixty percent of all new jobs in the 21st century will require skills that are possessed by only 20 percent of the current workforce. According to former Secretary of Education Richard Riley, we are currently preparing students for jobs that don't yet exist, using technologies that haven't yet been invented, in order to solve problems we don't even know are problems yet.
Jobs today require special skills. They require some technical knowledge and experience but that's not enough. Trade skills and education merely give a candidate the right to apply. It no longer means they are the best fit. It's the equivalent of being invited to attend the Super Bowl. A ticket allows you to see the game, but not play in it. The skilled worker today must have the ability to work independently but collaboratively, to not just troubleshoot problems but find permanent solutions, to work hard but smart, and to be assertive but personable. Finding skilled workers is becoming more competitive and increasingly more difficult. Unfortunately, these are also the employees that can make-or-break a company. And the shortages only get worse the higher up in an organization you go.
This is a good time to dispel a myth. As I travel around the country and speak with executives and managers in small towns and big cities from coast-to-coast, they are claiming to be the red-haired stepchild when it comes to worker shortages. Skilled worker shortages are NOT - I repeat, are NOT - limited to specific industries or regions of the country. Yes, there are some industries and regions that are more acutely affected than others, but even in areas with unemployment in double digits, recruitment is still going on ... and recruiters and hiring managers are not declaring victory in this war for talent.
In reality, almost every industry claims some ownership in the problem, most notably healthcare, technology, and manufacturing. No industry is left behind because skilled workers are just not being "grown" fast enough to fill all the available jobs requiring the ability to deal with ambiguity, to solve complex problems, to collaborate effectively and to communicate across generations. That means vacancies for skilled jobs are filled by employees moving from competitor to competitor and increasingly from one industry to another. In other words, open positions are being filled by "poaching" competitors, not putting the unemployed to work. To add fuel to the fire, when a hiring manager is finally fortunate to find the right employee, wage and benefits demands are out of sight...and going higher.
As a result of changing economic conditions, globalization, and demographic changes, business owners and management alike face a range of unprecedented human resources challenges, from competition for top talent to spiraling benefits costs. Globalization is increasing the competitive pressures on businesses while rapid advances in technology require new skills and accelerated development of the workforce. The changing business environment is putting more pressure on management to address human resources as a key part of the strategic competitive plan. This will take a team of managers with the capacity to think innovatively about meeting these workforce trends head-on. A failure to do so will impede or implode strategic plans.
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