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Workforce Crisis (Revised) 2008
The document discusses the impending workforce crisis driven by aging populations and declining birth rates, highlighting the need for proactive strategies in workforce management. Key points include a significant portion of the workforce nearing retirement and the challenges of engaging younger workers who have different expectations and work styles. Recommendations are provided for attracting and retaining both young and mature workers, emphasizing job matching, open communication, and flexible work arrangements.
Workforce Crisis (Revised) 2008
- 1. Surviving the WorkforceCrisis David Dennard Profiles International
- 2. Source: Barrett,J. “An impending work crisis.” Newsweek. September 20, 2002. David Ellwood, Dean of Harvard University’s Kennedy School of Government “ This is not something that tomorrow, all of a sudden, will show up in the headlines. This is a slow effect of changing demographics that is absolutely predictable but with profound implications… There will never be a moment where there is a massive crisis to call attention to this. If there is a crisis, it will be too late.” “ Future History”
- 3. In 2000, AFairly “Young” World . . . Source: U.S. Census Bureau Percent of Population Age 60+ 2000 Under 5% 5% to 12.4% 12.5% to 20% Above 20%
- 4. . . .Rapidly Aging by 2025 Source: U.S. Census Bureau Percent of Population Age 60+ 2025 Under 5% 5% to 12.4% 12.5% to 20% Above 20%
- 5. Life Expectancy Averageage expectancy throughout human history <18 years 1900: 47 years Today: 77 years US – 100 years ago 4% over 65 Today 14% and rising Pattern duplicated worldwide
- 6. Dramatic Increase inLife Expectancy 1900 1950 1970 1980 1990 2000 1910 1920 1930 1940 1960 75 70 65 60 55 50 45 40 80 Source: U.S. Social Security Administration Average Life Expectancy at Birth in the U.S.
- 7. The Baby BoomPattern Source: U.S. Census Bureau International Data Base 4.5 4.0 3.5 3.0 2.5 2.0 Birth in Millions The Boom Years: 1946-1964 Reason 2: Dramatic Drop in Birth Rates 1930 1940 1950 1960 1970 1980 1990
- 8. Screeching to aHalt: A Growing Shortage of Workers in the U.S . Source: Employment Policy Foundation analysis and projections of Census/BLS and BEA data. Millions of People Expected Labor Force and Labor Force Demand
- 9. Why? DramaticDrop in Birth Rates Source: Age Wave Total Birth Rate Total Birth Rate
- 10. Industrialized nations arecurrently experiencing the leading edge of these population changes 19% of the entire American workforce holding executive, administrative and managerial positions will retire in the next five years Source: Beazley, et. al, Continuity Management, Mackay, Alan. “Mature Age Workers: Sustaining Out Future Labor Force.” An Ageless Workforce - Opportunities for Business' Symposium Conference Paper. August 27, 2003. www.ageing.health.gov.au/ofoa/wllplan/aawpapers.htm , Time to act quickly on aging.” The Japan Times Online. August 23, 2002 www.japantimes.co.jp/cgi-bin/getarticle.pl5?ed20020823a1.htm , A. Paulli, “Pension systems and gradual retirement in Italy”, September 2000, p.17 In the year 2000, there were more people receiving pensions in Italy (22 million) than people working (21 million) Within the next seven years, over 33 million individuals in Japan (26% of the population) are expected to be over 65 years old. By 2016, the number of individuals aged 60-64 in Australia is expected to almost double Just 45% of German 55+ employed - Franz Muenterfering. By 2050 avg age goes from 42 to 50 and workforce shrinks from 50 Million to 39 Million
- 11. Young Workers –The Bad News on Engagement Source: The New Employee/Employer Equation , The Concours Group and Age Wave, 2004 %
- 12. Source: TheNew Employee/Employer Equation, The Concours Group and Age Wave, 2004 Young Workers – The Bad News on Engagement %
- 13. Source: TheNew Employee/Employer Equation, The Concours Group and Age Wave, 2004 Young Workers – The Bad News on Engagement %
- 14. Average tenure forUS workers <35 Average time in a job is 3 years (the “3 year hump”) 80% stay less than five years One third of all under 35 year olds are in the first year with their employer Source: The New Employee/Employer Equation Survey
- 15. What Matters toYoung Workers Comprehensive benefits package (19%) Workplace that is enjoyable (13%) Work that enables me to learn and grow (12%) Comprehensive retirement package (10%) Work that is personally stimulating (10%) Flexible work schedule (10%) 10 percent more in total compensation (8%) Two additional weeks of paid vacation (7%) Work that is worthwhile to society (6%) Flexible workplace (5%) Source: The New Employee/Employer Equation Survey
- 16. Things to rememberabout young workers… Independent – many ‘raised themselves’ Situational vs. structured – so they feel free to ignore rules, policies and procedures that they find restrictive Digital communicators – vs. ‘interpersonal’ Comfortable with diversity – unhappy with ‘one size fits all’ policies and management methods Differences older counterparts often perceive as “poor work ethic” Source: The New Employee/Employer Equation Survey
- 17. Select candidates whohave a strong fit to the job. In other words, put the right person in the right job – the first time. Remember that statistics show dramatically higher productivity for job-matched workers , and that job fit is a major contributor to employee engagement. 7 Steps to Attract and Retain More Young Workers – Step 1
- 18. “… persons whohad been matched outperformed to a statistically significant degree, those who had not been matched…” 14 Months After Hire: “Moreover, the differences widened after 14 months” Source: Herbert M. Greenberg and Jeanne Greenberg, “Job Matching for Better Sales Performance,” Harvard Business Review, Vol. 58, No. 5. Six Months After Hire…
- 19. Create opportunities thatreduce turnover and increase the retention of top performers. Reduced turnover and increased retention are also results of Job Match. 7 Steps to Attract and Retain More Young Workers – Step 2
- 20. Source: Herbert M.Greenberg and Jeanne Greenberg, “Job Matching for Better Sales Performance,” Harvard Business Review, Vol. 58, No. 5. Without Job Match Job matched candidates stay longer Low Turnover Industry High Turnover Industry % left / fired after 6 months 46% % left / fired after 14 months 57% % left / fired after 6 months 25% % left / fired after 14 months 34% With Job Match 24% 28% 5% 8%
- 21. 3. Maximizeproductivity and employee engagement through well developed training and coaching strategies and instruments. Get the most out of what you’ve got! 7 Steps to Attract and Retain More Young Workers – Step 3
- 22. 4. Insureagainst future retention challenges - use succession planning and job matching systems to plan individual career paths that take people beyond the ‘three year hump’. 7 Steps to Attract and Retain More Young Workers – Step 4
- 23. Use 360° multi-raterfeedback systems to consistently monitor ‘the pulse’ of the employee / manager relationship. Young workers DEMAND and DESERVE to be lead individually and professionally. 7 Steps to Attract and Retain More Young Workers – Step 5
- 24. Provide opportunities foropen communication and dialog. 360° multi-rater feedback systems are a great place to start. Younger employees EXPECT to have a forum for providing input & feedback. 7 Steps to Attract and Retain More Young Workers – Step 6
- 25. Determine the behavioraland working-style relationships of young workers and their managers, and use that information to create winning teams. Working styles and team dynamics vary dramatically in today’s diverse workforce. 7 Steps to Attract and Retain More Young Workers – Step 7
- 26. What if Istill do not have enough people?
- 27. It’s not ALL bad news – Many Employees Plan Not to Retire… At what age do you plan to retire? Source: The New Employee/Employer Equation , The Concours Group and Age Wave, 2004
- 28. Cutting Back HasNew Meaning: Cyclic – or Project-Based – Work Preference for working after “retirement” Source: The New Employee/Employer Equation , The Concours Group and Age Wave, 2004
- 29. What Matters toMature Workers Comprehensive retirement package (16%) Comprehensive benefits package (14%) Work that enables me to learn and grow (13%) Work that is personally stimulating (12%) Workplace that is enjoyable (11%) 10 percent more in total compensation (8%) Flexible work schedule (8%) Work that is worthwhile to society (7%) Flexible workplace (6%) Two additional weeks of paid vacation (5%) Source: The New Employee/Employer Equation Survey
- 30. Mature Workers –The Good News on Engagement Source: The New Employee/Employer Equation , The Concours Group and Age Wave, 2004 %
- 31. Source: TheNew Employee/Employer Equation, The Concours Group and Age Wave, 2004 Mature Workers – The Good News on Engagement %
- 32. Source: TheNew Employee/Employer Equation, The Concours Group and Age Wave, 2004 Mature Workers – The Good News on Engagement %
- 33. ‘ Retire Retirement’ – create bell-shaped career curves Six Steps to Become More Attractive to Experienced Mature Workers – Step 1
- 34. The Shape ofCareers to Come: “Down Shifting” for Continued Contribution 20s 30s 40s 50s 60s 70s 80s Career Development Career Deceleration Source: Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent by Dychtwald, Erickson, and Morison, April 2006
- 35. 2. Usesuccession, redeployment, and job matching systems well in advance to take a wider view of potential assignments for returning or downshifting workers. Six Steps to Become More Attractive to Experienced Mature Workers – Step 2
- 36. Align the matureworker with the position, which may include new responsibilities and new management styles. You will be exploring placing people in unfamiliar roles – job matching is essential for success. Six Steps to Become More Attractive to Experienced Mature Workers – Step 3
- 37. Tap into theexperience and management potential in mature workers. Maturity is invaluable. Be careful not to rely on out-dated and subjective practices. Source: Beazley, et. al, Continuity Management, Mackay, Alan. “Mature Age Workers: Sustaining Out Future Labor Force.” “ 19% of the entire American workforce holding executive, administrative & managerial positions will retire in the next five years” Six Steps to Become More Attractive to Experienced Mature Workers – Step 4
- 38. 5. Ensuremanagers are ‘age blind’ – reaching out to all age groups in the new blended workforce. Six Steps to Become More Attractive to Experienced Mature Workers – Step 5
- 39. Use all availableresources to understand how to communicate and relate to the future’s highly diverse workforces. Mature workers have a strong need to better understand their younger counterparts. Assessments provide much of this needed information. Six Steps to Become More Attractive to Experienced Mature Workers – Step 6
- 40. The question isnot, “ Is my organization facing an aging workforce crisis?” The real question is, “ Am I ready for it?”
- 41. Timothy Butler &James Waldroop “ Job Sculpting” Harvard Business Review September-October 1999 “ In these days of Talent Wars, the best way to keep your stars is to know them better than they know themselves - and then use that information to customize the career of their dreams”
- 42. For more informationContact: David Dennard 972-701-0222
Editor's Notes
- #2 I would like to welcome you, to today’s session , “Surviving the Workforce Crisis”. The fact that you took time out of your busy schedule, confirms you concerned about the Workforce Crisis. Today we are prepared to shared with you, information that is critical to your company’s ability to survive and thrive in the challenging times that lie ahead.
- #4 In 2000, we see a “Fairly Young World”. At that time 12.5% of the U.S. working population was age sixty or higher. Twenty Percent of the European Workforce was over 60 years old. Many of the worlds emerging economies has a group of workers that are extremely young.
- #5 Now lets fast forward to 2025. Our world is turning blue with an aging population. The US and Canada will need to find creative ways to tap the talents of the over 60 age worker to sustain the growth they have been experiencing.
- #7 So why is it that we have such a high percentage of older workers? The answer is simple, with the improvements in health care and various medical breakthroughs we see the life expectancy of US workers increasing. At the beginning of the twentieth century our life expectancy was 47.5 years. Now we are living, on average, to 75 years or even greater.
- #8 Here we can see the impact caused by that 3.3 children per family unit. A significant spike takes place between 1946 and 1965. How many of you in this room was born during this period? Raise your hand? What I previously called a significant spike was a wave that washed over every aspect of our economy. More food was needed, with economic success came the need for bigger homes, with bigger homes came the need for more schools and teachers, and this wave just shifted year after year. So now we see that wave about to crest as these workers prepare for whatever comes next! Can’t bring these people back with the same deal. At 55 in Texas a person can retire and begin to draw their retirement. In addition they can be rehired in that same position after 30 days, usually with lower pay
- #9 Over the next thirty years labor demands may outstrip the supply by 35 million workers. You’re going to find that most of the unfilled jobs are likely to be in the highly demanded and highly paid managerial and professional occupations. Employers will need to know who their super performers are because if your don’t your competitors will . Our clients have told us that they are experiencing increased levels of poaching of top performing employees at all levels of the organization. Every unfilled job could directly cost our economy $100,000 per year in lost output – ultimately $3.5 trillion in annual output . Every business gets to pay for the loss. Note – Background Information: This projection reflects labor demand based on continuation 1980-2000 trend in output per capita adjusted for labor productivity improvement based on 1980-2000 trend applied to Census middle case estimates of total population in future years and continuation of 2000 labor force participation rates and 2000 level of immigration and guest worker entry. Closing the gap requires some combination of higher productivity growth, higher immigration or guest worker levels, and higher full-time equivalent labor force participation. Requirement includes irreducible minimum unemployment at 4%
- #10 So what happened to that supply of workers that we have had for years? In 1960 the average US family had 3.3 kids per family unit. With the onslaught of the need for working Mom’s we now see the average family unit having two kids. This is a significant cut back for the US labor supply. You add that with the current education challenge in this country, not only do we not have enough supply, but those who are coming into the labor market lack the basic skills needed.
- #11 Many developed nations from around the globe are wrestling with this issue. From the US to Italy to Australia and Japan, each country is facing an increasingly older population
- #12 One of the most dramatic findings of the research conducted by The Concours Group and Age Wave was the impact employee engagement has on productivity and retention. Generation Y is a term that designates the group of people born immediately after &quot; Generation X .&quot; There is much dispute as to the exact range of birth years that constitutes &quot;Generation Y&quot; and whether this term is specific to North America , the Anglo world, or people worldwide. The only consensus, by way of its relation to the term &quot;Generation X,&quot; is that those born in Generation Y must follow Generation X. Generation X is a term used to describe generations in many countries around the world. The exact demographic boundaries of Generation X are not well defined, depending on who is using the term, where and when. According to generation researchers Neil Howe and William Strauss , Generation X includes anyone born from 1961 to 1981 in North America A baby boomer is a person born between 1946 and 1964 in Australia, Canada or the United States. Following World War II , the United States experienced an unusual spike in birth rates , a phenomenon commonly known as the baby boom . Traditionalist include anyone born prior to the 1946 baby boom.
- #16 What do younger workers look for in their employment relationships? Quite a lot. A cynic might say that young workers have not yet learned to lower their expectations. A progressive might counter that employers have net yet learned to meet their expectations, which eventually they must do. A realist might point out that there are simply many ways for employers to fail in the eyes of young workers, and failure spells turnover. This table lists young workers relative preferences among ten basic elements of the employment package. As with all workers, a comprehensive benefits package, with heavy emphasis on health-care coverage, tops the list. Young workers may be healthy, but they still value a benefits package, especially if they are starting families. Second, young workers value an enjoyable workplace more than mature workers do, and they even value it above “work that enables me to learn and grow.” They emphasize retirement packages least, perhaps because retirement seems far off, or perhaps because they doubt whether any retirement package will exist when they retire. Young workers place the highest relative weight on three items – flexible work schedule, additional compensation, and additional paid vacation.
- #18 – use the ProfileXT to hire for fit.
- #19 Not only did they find that those who were job-matched to their positions outperformed their non job-matched peers in their first six months in their jobs – but they also found that the performance gap had widened significantly after fourteen months.
- #20 use Profile XT to place the right person in each job first time
- #21 Those who are job-matched to their positions tend to stay in their jobs much longer – significantly reducing employee turnover and the many costs associated with turnover – advertising costs, agency costs, management time, down time, morale and so on. Look at the numbers – in the high turnover industries people stayed twice as long when they were matched to their jobs; while in low turnover industries they stayed as much as five times longer!
- #30 Employees of all ages want meaningful work and responsibility, opportunities to learn, a congenial and respectful workplace, fair pay and adequate benefits, but to varying degrees. Mature workers expect the mix, especially such elements as pension accumulation and payout options, to reflect the value of their experience and their retirement preferences. This table shows what mature workers want among ten basic elements of the employment package. Not surprisingly, a comprehensive retirement package tops the list, followed by a comprehensive benefits package (with emphasis on health-care coverage). The next several elements entail the work experience. Mature workers value the conditions for personal contribution, enjoyment and growth more highly than work arrangements (flexible schedule and location) and more than significant increases in compensation and vacation. Note that more money and vacation matter least to mature workers partly because they are probably well paid already and have earned longer vacations.
- #35 The downshifting trajectory completes a bell-shaped curve with a “deceleration” phase on the latter end that can be as carefully planned as one’s career “development” at the early end. In terms of economic productivity and individual well-being, “retiring” makes the least sense. We suspect that most employees will prefer – and employers must institutionalize – this downshifting model. Employers must accommodate these evolving needs of mature workers to maximize their productivity.