03/ 20/ 2008
by Gregory P. Smith
In the movie The Perfect Storm, a small fishing vessel has the misfortune of encountering the worst Mother Nature has to offer. Just like this boat, today's employers are facing a combination of conditions just as threatening as those on the high seas. With a slumping economy, skyrocketing oil prices and a shrinking workforce, businesses must be prepared for the worst--or they could face a similar misfortune.
Over the next decade, the leadership talent pool (ages 35-44) will be reduced by 9 percent. That number will shrink by another 10 percent by 2020 according to the U.S. Census Bureau, International Database.
Tamara J. Erickson, co-author of Workforce Crisis: How to Beat the Coming Shortage of Skills And Talent (Harvard Business School Publishing, 2006) delivered a thought-provoking presentation at the recent Society of Human Resource Management conference in June. Her presentation, titled "New Models of Work: Avoiding the Coming Crisis of the Changing Workforce," points to five issues all employers should be concerned with:
- Not enough bodies. The growth in the working-age population is screeching to a halt.
- The workforce is getting older. The U.S. population 2000-2010 shows a rapid growth in the over-55 workforce. This means the leadership pool is shrinking.
- Inappropriately skilled workers. Over the next decade only 30 percent of 21-year-olds will obtain a college degree, while over 90 percent of the new jobs created in the U.S. will require a college degree.
- A highly diverse workforce. The emerging workforce contains the diverse values of the following generational groups: Traditionalist, Leading-edge Boomer, Trailing-edge Boomer, Generation X and Generation Y.
- Less desire for a leg up. All groups are showing a decline in their desire for greater responsibility.
Some perspective
With a pattern of declining birthrates, skill shortages and an increasingly older population, we see a common pattern affecting the workforce of the industrialized world. In the U.S. we have the added situation of "boomers" and "echo-boomers," which indicates that changes in the workforce are not going away anytime soon.
Compounding the issue, experts say only 30 percent of 20-year-olds will obtain a college degree during the next decade. The bottom line is HR will have to change the "requirements" of job descriptions to "desires," and employers will need to spend more time educating and training their workforce, Erickson says.
Additionally, organizations face increased ethnic, generational and racial diversity. These diverse values and generational differences place a greater demand on managers and leaders. They need to be managed and led in a different manner. Sadly, the educational system is not equipped to prepare Americans for the knowledge economy needed to produce high-performance organizations. Employers will have to fill the gap. They also need to be looking at ways to converge HR and training as a standard practice to keep pace in a highly complex labor market. Organizations need to gear up for this now by asking the following questions:
- Are your managers and leaders able to cultivate the diversity, generational differences and shifting talents of today’s workforce?
- Will they be able to lead teams to increase productivity and high performance?
- Have you put plans in place to increase professional development in your organization?
If your answer to any of these questions is no, or if you are not sure, you may have reason to be concerned about the future of your company.
A solution
Cultivate the potential of each person. Build greater flexibility in your work hours. Discover what satisfies and dissatisfies each generation. I assured a client recently that engaging in a retention plan to address this issue would put her organization in a better position to gain employees rather than lose her workforce to retirement or to her competition. Her organization is already seeing the boomers looking for greater flexibility to take time off for leisure. But at the same time, they want to stay employed. Meanwhile, the 35-45 year olds are looking for more family time and are less willing to take on greater responsibility.
I recommended a plan that combines the following:
- Start with a sound hiring strategy for the best talent that meets or exceeds current and future needs.
- Create a plan for retaining new and identifying existing talent in the organization.
- Examine workplace dimensions such as leadership, communication, training and recognition.
- Create a training program for existing managers and up-and-coming leaders in the 25-34 year-old group that focuses on:
- Maintaining and enhancing team member self-esteem.
- Behavior--what team members do rather than their attitudes or personal characteristics.
- Encouraging team member participation in decisionmaking and problem solving.
Fortunately, there is still time to put your organizational plan in place.
Recognize that the world around you is changing. It includes the new millennium workforce that has totally different needs and expectations. It is about adapting. Prepare now and avoid being caught in the storm.
Greg Smith shows executives and business owners how to reduce employee turnover and build high retention workplaces. He has written seven books and more than 300 articles on business management. He speaks at conferences, conducts management training, and is the president of a management consulting firm, Chart Your Course International, located in Atlanta, Ga. Phone him at 770-860-9464 or send an e-mail to greg@chartcourse.com. More information and articles are available at www.ChartCourse.com and www.HighRetention.com.
