Turmoil and Trends
   in America’s
    Workforce
       Alex Dodd, CEO
     M Squared Consulting
Agenda for today
• Current economic climate
• Talent supply and demand
• Flexible workforce
• Recommendations
Current Economic Climate

• Not likely to lose best talent
• Belt tighten, but not so much that you
  cannot take advantag...
Talent supply & demand

• What’s happening on the demand side?
  – “the work that needs to be done”
• What’s happening on ...
3 Primary Drivers

Demographic trends…
…impacting the workforce supply
Firmagraphic changes…
…impacting the workplace
envi...
Demographic Trends

•   Baby Boomers
•   Post-Boomer generations
•   Women in the workplace
•   “Non-traditional” househol...
Baby Boomers

• Reaching retirement age…
  – Some retiring now
  – Some continuing to work, full-time
  – Some continuing ...
Post-Boomer Generations

• Generation X is not big enough to replace the
  Baby Boomers
• Generation Y is similar in size ...
Our Workforce
                    76.7m
                                                             73.5m



            ...
Women in the Workforce

• A growing segment of the workforce
• Make 83% of all consumer purchase
  decisions
• 60% of new ...
Traditional Households

Non-traditional households (i.e. the vast
majority of households) want / require
(demand!) flexibi...
College Graduates

• College degree is a prerequisite in the
  knowledge economy
• Declining graduates with engineering an...
Immigration

• Highly politicized issue
• H1B visa’s – 2008 lottery closed in first 24
  hours.
• No relief in sight…
Life Expectancy*
Age
80
75

70

65

60
55

50

45

40
      1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

      ...
Birth Rates
Fertility
Rate

                                                                         = 1960               ...
Cost of Living

• Most knowledge jobs are in or near major
  metro areas
• Housing
• Commuting costs
• Education
Workforce Projections…

                                                                              )
                  ...
Our Challenge:
Firmagraphic Drivers

•   The knowledge economy
•   Economic conditions
•   Unemployment
•   Financial constraints of the ...
The Changing
Nature of Work
The Changing Nature of Work
• Knowledge economy is driving the need for
  specialized workers with specialized skills
• Wo...
Psychographics: The
Changing Workforce
4 Generations in 1 Workforce



Traditionalists         Baby Boomers       Generation X           Generation Y
Born: 1925 ...
Outcomes of the Changing
            Workforce
•   Changing definition of retirement
•   Desire for greater work/life bala...
So, the workforce has already radically
changed, the nature of work is changing,
 now the workplace needs to catch up…
The Flexible
  Workforce
The Flexible Workforce is an innovative
human capital strategy that:

• Recognizes the changes that are impacting “work”
•...
Developing a Model for Working
      with Flexible Resources
1. Define the work and desired results
2. Define the skill/ex...
Flexible Workforce Advantages
• Expertise: Brings in targeted expertise
• Execution: Enables leadership to focus on
  exec...
The Time to
 Act is Now
Recommendations

• There is still talent. It has just changed,
  and the supply has gotten tighter.
• Many professionals n...
There is no magic wand…

• Traditional FTE employment
• Greater use of flexible workforce

               …and…

•   Techn...
Embrace the flexible workforce
and make it a foundation of your
    Human Capital strategy

• It demonstrates your commitm...
Issues and Recommendations



                  www.msquared.com/blog

                         Alex Dodd
                ...
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Turmoil and Trends in America's Workforce

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This was presented at San Francisco's Commonwealth Club on October 14th, 2008. Covers the significant trends and turmoil in America's workforce and discusses how the evolving flexible workforce is a viable solution in the war for talent.

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Turmoil and Trends in America's Workforce

  1. 1. Turmoil and Trends in America’s Workforce Alex Dodd, CEO M Squared Consulting
  2. 2. Agenda for today • Current economic climate • Talent supply and demand • Flexible workforce • Recommendations
  3. 3. Current Economic Climate • Not likely to lose best talent • Belt tighten, but not so much that you cannot take advantage of upturn • It’s tough, but use this opportunity to address under performers • Do something different – embrace the flexible workforce…
  4. 4. Talent supply & demand • What’s happening on the demand side? – “the work that needs to be done” • What’s happening on the supply side? – “the people that will do the work” • Long-term relationship between supply and demand
  5. 5. 3 Primary Drivers Demographic trends… …impacting the workforce supply Firmagraphic changes… …impacting the workplace environment and the nature of work itself Psychographic evolution… …creating a “new” workforce
  6. 6. Demographic Trends • Baby Boomers • Post-Boomer generations • Women in the workplace • “Non-traditional” households • College graduates • Immigration • Life expectancy • Birthrates • Cost of living
  7. 7. Baby Boomers • Reaching retirement age… – Some retiring now – Some continuing to work, full-time – Some continuing to work, on their own terms! • Health benefits… • Financial ability to retire…
  8. 8. Post-Boomer Generations • Generation X is not big enough to replace the Baby Boomers • Generation Y is similar in size to the Boomers, but is not experienced (yet!) • Gen X & Y are radically different in viewpoint than Boomers
  9. 9. Our Workforce 76.7m 73.5m 49.1m 28.5m Traditionalists Boomers Generation X Generation Y (1925-1945) (1946-1964) (1965-1980) (1981-2000) Source: 2005 U.S. Census
  10. 10. Women in the Workforce • A growing segment of the workforce • Make 83% of all consumer purchase decisions • 60% of new college graduates • 60% of working age women work • Driving the creation of new career paths and workplace flexibility
  11. 11. Traditional Households Non-traditional households (i.e. the vast majority of households) want / require (demand!) flexibility
  12. 12. College Graduates • College degree is a prerequisite in the knowledge economy • Declining graduates with engineering and professional degrees • Many foreign nationals are returning home
  13. 13. Immigration • Highly politicized issue • H1B visa’s – 2008 lottery closed in first 24 hours. • No relief in sight…
  14. 14. Life Expectancy* Age 80 75 70 65 60 55 50 45 40 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 *Average, at birth, in the U.S. (Source: U.S. Social Security Administration)
  15. 15. Birth Rates Fertility Rate = 1960 5.9 6 = 2000 5 4.0 4 3.6 3.3 2.0 3.1 3 2.9 2.8 2.5 2.5 2.0 2 1.7 1.7 1.6 1.8 1.4 1.3 1.2 1 0 US France UK Canada Japan Germany Italy China India (Source: Age Wave)
  16. 16. Cost of Living • Most knowledge jobs are in or near major metro areas • Housing • Commuting costs • Education
  17. 17. Workforce Projections… ) m and e (De forc ork U.S. Workforce nW Workforce w th i Gap! Gro ed j ect Pro ply) kforc e (Sup wth in Wor Projec ted Gro 1980 1990 2000 2010 2020 Year
  18. 18. Our Challenge:
  19. 19. Firmagraphic Drivers • The knowledge economy • Economic conditions • Unemployment • Financial constraints of the firm • Change & Complexity • Outsourcing / Offshoring / Globalization • Employer loyalty
  20. 20. The Changing Nature of Work
  21. 21. The Changing Nature of Work • Knowledge economy is driving the need for specialized workers with specialized skills • Work is becoming more team based • Work is becoming more project based • Technology intensive and enabled work can be done from anywhere • New organizational structures, leadership and management styles are emerging
  22. 22. Psychographics: The Changing Workforce
  23. 23. 4 Generations in 1 Workforce Traditionalists Baby Boomers Generation X Generation Y Born: 1925 -1945 Born: 1946 -1964 Born: 1965 -1980 Born: 1981 - 2000 Respectful of Anti- Self-reliant (latch- Confident and full authority authoritarian key kids) of self-esteem Hierarchical Idealistic Anti-institution Impatient and eager to live life Loyal to institutions Motivated by Rule-morphing “now”. FUN! changing the Rule makers and world Tribal Socially conscious conformists Competitive Information-rich Highly tolerant Plugged-in Family-centric
  24. 24. Outcomes of the Changing Workforce • Changing definition of retirement • Desire for greater work/life balance • More career flexibility/control • Looking for greater meaning in work • View work as a “series” of engagements • Diminished employee loyalty
  25. 25. So, the workforce has already radically changed, the nature of work is changing, now the workplace needs to catch up…
  26. 26. The Flexible Workforce
  27. 27. The Flexible Workforce is an innovative human capital strategy that: • Recognizes the changes that are impacting “work” • Leverages the strengths of all 4 generations in the workforce • Incorporates workplace flexibility, allowing people to balance work/family/life • Provides greater flexibility and resiliency for the organization
  28. 28. Developing a Model for Working with Flexible Resources 1. Define the work and desired results 2. Define the skill/experience level required to do the work 3. Define the relationship between the worker and the organization 4. Select the resources to do the work 5. Manage the work 6. Capture and retain knowledge 7. Measure results and satisfaction levels
  29. 29. Flexible Workforce Advantages • Expertise: Brings in targeted expertise • Execution: Enables leadership to focus on execution, accelerates time to market • Cost Control: Buy the expertise you need, as you need it, where you need it. • Flexibility: Manage business peaks and valleys • Perspective: Objective outside experience • Recruiting: Broadens reach, “try before you buy” • Retention: Demonstrates commitment to core FTEs
  30. 30. The Time to Act is Now
  31. 31. Recommendations • There is still talent. It has just changed, and the supply has gotten tighter. • Many professionals no longer want a 9-5 job for life. Their definition of a “career” has evolved to being a “Free Agent”. • You must now play on their terms to get their help.
  32. 32. There is no magic wand… • Traditional FTE employment • Greater use of flexible workforce …and… • Technology • Productivity improvements • Outsourcing/offshoring • Enlightened employment policies • Management practices
  33. 33. Embrace the flexible workforce and make it a foundation of your Human Capital strategy • It demonstrates your commitment to innovation, supporting your staff, and getting work done • It shows you care about success! • It enables you to get the best available talent
  34. 34. Issues and Recommendations www.msquared.com/blog Alex Dodd Chief Executive Officer adodd@msquared.com 415-391-1038

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