Posted: Andy Marken 02.14.18
|“You were stupid enough to get yourself into this mess! And we're the only ones crazy enough to get you out of it!” – Lee Christmas, “The Expendables 3,” Lionsgate, 2014|
What I like about government economic analysis is well … not much.
In the U.S., the Fed considers an unemployed rate under five percent as full employment.
Government labor officials also like to wave around the number of new jobs being “created.”
The big problem is businesses are more focused on:
- Finding qualified, experienced people for new positions
- Replacement of staff churn (fire, retire, whatever)
- Balancing diversity (sex, race, etc.)
And it’s not a pond you can go to and dip out what you want when you need it.
Global Growth – As the global population steadily moves to 10B souls, Millennials and early Boomers will be the major representatives in the workforce; but with people living longer and with better health, there will be a need to take advantage of experience as we move forward.
And, according to McKinsey, the situation is going to get worse. By 2030 we’ll see:
- 3.5 B global labor force
- 1.1 B non-farm jobs created, 84 percent in developing countries
- 245 M increase of college graduates
- 38-40M shortage of college grad workers
- 45M shortage of workers with secondary education
- 100 M unemployed young workers (15-24)
- 360M additional older people not part of the labor force
|Weeding Out – The global population isn’t all equal--especially when it comes to the technology industry. As you drill down, you suddenly discover why it takes so long to locate individuals with the right skills, aptitude and interests your firm needs to grow.|
Approximately seven years into the global economic expansion, the U.S. and most industrialized countries are finding it difficult to find people who want jobs and are qualified for openings both in highly skilled positions and those requiring less skills.
- In the U.S., Kelly Services (staffing company) is already finding it tougher to fill beginning positions in warehouses, call centers.
- In the U.S., 30,000 – 35,000 trucking jobs are open and the industry says the shortage could rise to 240,000 by 2022. Of course, by then, we’ll have connected trucks so … no problem.
- In California, Bay Area Rapid Transit (BART) reported that it has more than 1,500 unfilled maintenance staff positions.
To offset the trend, firms are lowering job requirements, overlooking gaps in resumes, beefing up internal education/training programs and encouraging/assisting long-term (read older) employees to remain with the company.
Governments and businesses have to increase their efforts to encourage and help young people earn college degrees, especially in the STEM (science, technology, engineering, math) and to retrain mid-career workers in job-specific skills. And, firms need to step up their efforts to shape education and training systems that build a constant flow of workers with the right skills for the 21st century, including so-called blue collar jobs (welders, mechanics, carpenters, technicians) who are vital to keeping the wheels on the economy. They aren’t the cushy, glitzy jobs; but they produce results that are much more tangible to the company’s and country’s economy than lawyers or sociology/philosophy instructors.
According to Boston Consulting Group (BCG), most countries will face labor shortages by 2030.
|Coming Up Short – While searching for the most qualified people for your firm may be difficult right now; by 2030, it will be even tougher. By then, Gen Zers will be the people your firm will want to hire and they will be more scarce, more expensive to hire.|
Even economies with a surplus in key skills in 2020 will face what BCG projects will be massive shortfalls by 2030.
The dollar value of the labor gap will be about 10 percent of today's total GDP or $10T.
While there is no quick fix to the long-term challenge, there is a selfish solution firms can take to ensure their continued growth in the near-term (10 plus years) … encouraging their senior experienced people (men and women) to stay onboard.
According to a study by Harvard University and Rand Corp., retirement deprives firms of critical experience and knowledge which undermines organizational productivity and profits.
|Boomer Potential – The most experienced and knowledgeable members of the workforce are approaching boomer status (50-plus), even as the new employees struggle to become proficient and effective in the work place.|
The report noted, “An older worker’s experience increases not only his own productivity but also the productivity of those who work with him.”
All things being equal, experienced workers are more productive because they have accumulated knowledge and expertise—not just from their formal education, but from years in the trenches.
Basic skills can be learned through training but experience can only be gained by doing the work.
Or, think in terms of a slight interpretation of Darwin’s Origin of the Species – “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
It is true in both line/staff positions as well as the trades.
As an official of a hydraulic fittings firm said, “As your employees who have been working in manufacturing start to retire, you’re not just losing people, but that knowledge and experience is walking out the door,”
To fill the experience gap, firms are encouraging boomers to stay on because up until last year, their generation accounted for the largest portion of the working population and a wealth of business-critical expertise.
Fortunately, more boomers have chosen to continue to work because they want to, and feel they can continue to make meaningful contributions to firms.
On an unadjusted basis, the U.S. Labor Department recently found that the unemployment rate for those 60 and older was 4.1 percent--below the overall national rate of 5.1 percent.
|Staying Productive – Today’s employees are continuing to work – some because they need to, but more because they want to. Because people are healthier and living longer, men and women are finding it rewarding to contribute to their firm’s growth and prosperity.|
Fortunately for business, the rise in boomers continuing to work has steadily increased over the last decade and is part of a long-term trend. Economists note that the participation rate for the 65-plus age group began climbing in the mid-1980s.
They attribute the trend to better health as a major driver. Also, jobs are more mental and less physical. According to a Pew Center analysis of labor department data, more boomers are refusing to slow down and are eager to continue full-time and part-time work. According to the Harvard University/Rand report, this is an important benefit to companies because, “Many employers say they aren’t short of skills but experience.”
Some analysts like to categorize people into age groups to define their wants/needs, why they stay/leave and whether they are committed or simply occupying space.
The common (and easy) breakdown is:
- Young Millennials (age 18-26)
- Older Millennials (27-34)
- Gen Xers (35-50)
- Baby Boomers (51-69)
Each, in their own way, has been praised and condemned for their work ethic and company commitment.
Yes, even boomers.
Life Experiences – Today’s boomers have gained a lot of experience – good and bad – over the years and work to stay abreast of the latest technology and its use. The balance of younger and older employees can enable firms to grow while making fewer mistakes along the way.
As Strategy& noted in their report, it is tougher to attract and retain great employees … at any level and of any age. Addressing this by focusing strictly on recruiting a specific age, sex or race group is shortsighted.
The key is to develop a strong, cohesive, performance-driven team.
|Blending of Talent – Regardless of the age or experience level, the key for senior management is that they have a team of people that is working toward the same goal – what’s best for the company’s growth. People who think only in terms of what’s good for them ultimately hurt the success and profitability of the entire organization.|
Business success must be a team effort.
It requires a team with a common purpose, clear performance goals, mutual accountability, complimentary skills and a strong emotional commitment to the team’s purpose and success.
Generation-specific strategies and programs often do more harm than good for organizations.
Instead, management needs to make certain everyone on the team is committed, engaged and on the same page. The attributes management needs today are:
- People who make it happen
- High achievers
- Driven to perform
- People are not workaholics, but stick with the task until it’s done
- Respond promptly to email, voicemail
- Show the same courtesy to the janitor they do to the CEO
- Offer to help
- Stand up for members of the team
That is a helluva’ team … regardless of age, sex or race!
All of that backed by a boss who agreed with Conrad Stonebanks who said, “Come on, lay it out. I'm a good listener.”