Baby Boomers Then and Now

Before the Millennials, Baby Boomers were the most talked about demographic in the U.S. By virtue of their sheer numbers, 78 million strong, Boomers transformed everything from our housing market to Social Security to our workforce. But Baby Boomers, or those born during the post wartime ‘baby boom’ of 1946 and 1964, have grown up and are now ages 51 to 66. 

social security for baby boomersSince the Boomers have previously driven societal trends for the past 50 years, it is likely the Boomers will continue to exert their influence on the way we live and work. The future that the once-idealistic young adult Baby Boomer envisioned didn’t quite pan out. Many Boomers are experiencing (or will experience) major life changes like caring for an elderly parent, health changes to them or a spouse, careers that begin or end and many more. These changes have financial consequences and of course will impact their quality of life, their goals and spending habits moving forward.

Let’s take a look at where Boomers are now as a group and as individuals.

Some are retired but many are still working

Remember when Baby Boomers were forecast to leave their jobs in mass at their earliest eligibility? The apocalyptic forecast warned us that 8,000 Baby Boomers turned 65 each day … suddenly employers would experience a mass exodus. The reality is that they are staying put. Many are starting second careers and businesses. Sixty one percent reportedly work because they want to, not because they have to. A MetLife Mature Market Institute survey updated those results in 2013, showing that more than half of those boomers born in 1946 have now fully retired—up from 19 percent in 2007 and 45 percent in 2011.

Many Baby Boomers aren’t downsizing their homes

Housing is an area that demonstrates some of the distinctions within the Boomer generation. Only about 21 percent of this group is actively downsizing their living space, the highest percentage of any age bracket. And 25 percent of Boomers want bigger homes, perhaps to house all of the possessions that they accumulated and possibly a teenage dependent. Fanny Mae research also notes that many Boomers currently display no hurry to trade in their houses for retirement condos, much to the surprise of real estate professionals. One reason is that Boomers far outnumber Generation X, the chronological successor generation who traditionally have purchased homes from retirees and older generations. Generation X is also only about half the size of the Baby Boomer generation which means fewer buyers. Finally we have the up-and-coming Millennials who unfortunately are not looking to purchase large homes or are able to afford them.

Boomers are retiring in place, close to their families

Baby Boomers are staying where they are, according to Census Bureau data that shows that just 1.6 percent of retirees from that era moved across states lines in 2010. And those who did move are going all over the country, not necessarily moving to a retirement address in Florida. Many who did relocate have returned “home.” Staying close to the grandchildren, working at home or caring for someone else may factor into that trend. Compared to a generation ago, Florida claims only about half the share of out-of-state retirees.

Their debt levels are declining but still higher than ideal

After 2008, many households radically pulled back on spending and focused on reducing their overall debt. More than half of Boomers have similarly cut back on spending and reduced credit card debt–one-third even paid off their mortgages, according to a 2011 report by Bankers Life and Casualty’s Center for a Secure Retirement. So too did the Baby Boomers, many of whom having been cutting their credit card debt. A recent report from TransUnion found that nearly 1 in 3 Americans at least 60 years old has debt and the average balance is more than $60,000. That’s up sharply from 2005 when only 22% of seniors 60+ had debt and the average balance was $40,000. Unfortunately, older Americans are indeed living with more debt as they reach retirement. 

Many are supporting a grown child and elderly parent—at the same time

Pew Research says 15 percent of people in their 40s and 50s are paying to support a grown child and a parent at the same time. Over the next 5 years, 1 in 5 older workers between 45 and 74 say they may need to leave their jobs to care for an adult family member—with more women than men expected to face this dilemma, according to an AARP study released in January. College expenses are also taking a big bite of boomer budgets, as loans and scholarships cover only 31 percent education expenses according to Sallie Mae’s study, “How America Pays for College.” Nearly 40 percent of the total—is paid by mom and dad.

Health-wise, boomers are not in great shape

Even though they have a higher life expectancy, many Baby Boomers are in worse physical shape than their parents. Obesity, disability, blood pressure and chronic illness are more common. The National Health and Nutrition Examination Survey gathered data on those between the ages of 46 and 64 (average age: 54.1) during 2007 and 2010 and then compared them to their elders, who were previously surveyed at same age range, between 1988 and 1994. The results showed that only 13.2% of boomers rated their own health as “excellent,” compared with 32% of those in the older group. Boomers were more likely to have high blood pressure (43% vs. 36.4%), high cholesterol (73.5% vs. 33.8%) and diabetes (15.5% vs. 12%). A full 38.7% of boomers surveyed were obese, compared with 29.4% of their elders. Which means that while they will remain disproportionately in the labor force (compared to estimates of their withdrawal) at some point their health challenges will surely challenge Boomer productivity relative to younger generations anxious to advance

2 Trends Changing the Face of U.S. Jobs

You’ve heard it before!  We’re working the Perfect Labor Storm. But there are two trends impacting U.S. jobs that are often pushed aside. They involve working women and teens.

are you redy?What the future workforce will look like is clear as mud.  Demographic and job market surveys and studies produce contradictory and ambiguous results. But one thing remains sure. The workforce will look and function differently than any previous workforce.  Jobs won’t be tweaked but replaced. New jobs we never imagined are being created.

The only certainty we know is the workforce of today and tomorrow will be continuously evolving. And yet many companies react like they are spectators on the sidelines and not active participants.

A recent report from Career Builder, “The Changing Face of U.S. Jobs,” explores how an increasingly diverse population is affecting the composition of nearly 800 occupations by gender, age, and race/ethnicity.  Two of the most significant trends follow.

More women working but losing ground in high-pay jobs

There are more women in the workforce today than at any point in U.S. history:  4.9 million more female workers since 2001 compared to just 2.2 million additional male workers.

One reason for the increase is that women are less likely than they were in the past to leave the labor force for family or other reasons.  Men, on the other hand, are increasingly more likely to leave a job and opt not to look for another.

But as radio broadcaster Paul Harvey used to tell us, “and now for the rest of the story.”

Despite declining male labor participation since the 1970s, it is men that are gaining a greater share of jobs in 72 percent of all occupations.  While fewer men are working they are getting jobs, and thirty-seven percent of those jobs are in female-majority occupations. Women gained a greater share of employment in just 21 percent of occupations.

How is it women are losing ground in most occupations?  It’s because 76 percent of occupations that lost 10,000 jobs or more since 2001 were male-majority occupations.

Conversely, of the 32 occupations that gained 75,000 jobs or more, 69 percent were female-majority. The largest gains in the workforce for women occurred in a smaller number of occupations, many of them at the lower pay scales such cashiers and clerks.

That leads us to the next chapter in this unfolding story of how our workforce is evolving.

One controversial topic is gender pay gap. But same pay for the same work offers a limited solution to an insidious shift.

A socioeconomic event called “occupational segregation” is in place. Women have lost ground in 48 out of the 50 highest paying occupations including surgeons,  orthodontists, and psychiatrists. Men are gaining in higher paying jobs while women  are gaining mostly in low-paying, male-majority jobs.   Male-majority jobs pay significantly more per hour, on average, than female-majority jobs ($25.49 median hourly earnings for men vs. $20.85 for women).

That trend is perplexing because women now dominate college graduation numbers.  But the degrees that many women receive are just not in top-paying fields, such as STEM jobs. While total male participation and college graduation is down, men continue to lead in programs that typically lead to higher-paying jobs, such as computer science (83 percent of 2013 grads) and law (54 percent).

The aging workforce is felt in virtually all occupations.

In addition to gender shifts in our workforce, we have an increasingly aging workforce  and it is impacting younger generations, even teens.  Part-time and summer jobs like hosts/hostesses, food prep/serving, dishwashers, and ushers/ticket takers have disappeared.

Faced with a tumultuous job market, Millennials (now in their 20s and early 30s) continue to experience high unemployment and underemployment.   At the same time the age 55 and older workforce increased its share of employment in 99 percent of occupations!   There are now 8.3 million more older workers who were supposed to retire but didn’t.  The near-apocalyptic exodus of Baby Boomers from the workforce has not occurred as predicted creating a “gray ceiling.”

That’s good news for employers because the brain drain has been postponed, but it’s bad news for the three succeeding generations (Generation X, Millennials, and Generation Z).

What’s my point? Waiting to see what happens is no longer an option.  Any company that expects to grow (or even survive) must recognize that the labor and job markets are evolving and how they recruit, hire, manage, and retain workers will need to evolve too.

Millennials’ Lack of Financial Literacy Costs Employers Too

Previously (in 9 Workplace Trends Worth Knowing,) Ira Wolfe wrote about the troubling statistic between recent graduates (Millennials) and their preparedness for professional environments. Specifically it was stated that four out of five CEOs worry about the availability of key skills, and that only 45 percent of young people believe they’re prepared to enter the workforce.

Millennial financial literacyFor the most part, these pieces of data are referring directly to young people’s often inadequate preparation for jobs and career growth, and this is something that CEOs and senior employees can help with to some extent. That is to say, programs can be implemented and Millennials can be coached so that they may catch up and succeed in their careers. However, the idea that young people aren’t always ready for the workforce doesn’t solely concern performance in the office. The same problem exists on a more personal level for many young employees in that many simply aren’t ready for the financial management that comes with securing a job and salary.

If that doesn’t sound like a problem that could negatively impact a workplace, think again. According to a 2012 survey conducted by Fidelity Investments, 78 percent of employers say “concerns over financial problems can have a negative impact on employee productivity.” That statistic comes on the heels of a number of troubling findings about the financial literacy of American employees in general, though it’s only natural that the problems are more concerning with younger employees.

So how can small business owners and managers help ensure a young employee’s financial future instead of unfortunate fate?

Well, the best solution may be to set up some sort of course or training to educate employees on the basic financial skill sets and understanding they’ll need to succeed. Here are a few ideas that can make for a good start.

  • Confirm the advantages of savings vs. paying off debts. One of the biggest challenges facing Millennials entering the job market these days is the mountain of student loan debt so many are buried beneath. Debt can be a constant source of stress, and in ways it becomes even trickier to deal with once you have income, because a new problem arises: how much money should you save, and how much should you allocate for paying off debts? S. News & World Report provided a very helpful worksheet for addressing these questions. It’s a helpful resource for young professionals struggling with all this.
  • Discuss the very basics of investment. For the young and even many more mature employees, investment can be confusing and complex. It may be a difficult concept to understand and implement especially for many young people coming right out of college and joining the workforce for the first time,. Providing a basic guide to how the market works and how investments are conducted can make a world of difference to a young employee. FXCM offers an outline of the New York Stock Exchange’s history and functionality that can be a terrific starting point while serving as the foundation for more specific financial strategy.
  • Provide a simplified explanation of how employment will affect the employee financially. For young employees not used to filling out forms with information on everything from health insurance to retirement funds, the whole process can be a bit overwhelming. Also, the forms themselves sometimes seem almost as if they’re designed to confuse. The fine print is necessary, but to help any employee – regardless of age – fully grasp and embrace financial commitments and benefits associated with a new job, providing a simplified explanation can be extraordinarily helpful. This allows the employee to understand where he or she stands with income and investment, so as to better address personal financial decisions.

In the end, a small business owner or CEO can only go so far in helping new and young employees to become more financially literate. Unfortunately, though, it’s a reality in much of America that Millennials are often unprepared not just for the workforce but for their own financial planning. Helping them to get off on the right foot in this regard can go a long way toward improving productivity and promoting ease of mind in the workplace.

Special thanks to Jenna Batten, a freelance writer based just outside of Baltimore, for submitting this post. She enjoys covering topics related to financial management and investing.

The Truth, Myth, and Consequences of Skilled Worker Shortages

The combination of an improving but fickle economy, the accelerating integration of advanced automation into our daily life, and a seismic demographic shift in the workforce have all but pushed traditional recruiting strategies into obsolescence. Aside from all the economic and social disruptive changes, it’s created a tug-of-war between employers’ anguish about widening worker skill gaps and workers’ distress about the lack of opportunity to get jobs or move up the career ladder.

Tug of war - internal recruiting vs outsourcingFor those people looking for a paycheck, what they see is smoke and mirrors.  If you stand in their shoes, a shortage of workers is pure myth – a crafty message concocted by employers to keep the flow of cheaper, imported labor open and wages low.

The view from the boardroom and production floors is apparently different. It’s like someone flipped a switch and scripted a completely different story line.

From management’s window, worker shortages are painfully real; so much so that strategies are altered and growth plans slowed to accommodate the frustrating inability to attract and retain qualified skilled workers.

So who is right? Is one of the parties blinded by bias and even greed while the other lives in a fog of naiveté and denial?   Or are both parties correct because it just depends on the region you live and on industries in which you work?

The answer is yes.  It’s all of the above. Shortages of skilled labor are not homogenous across 50 states and all industries. They are not even consistent between countries and continents. Shortages of workers concurrent with unemployment and underemployment this time around aren’t based on quantity alone. The popular formulas used for full employment and productivity are outdated. Most metrics only see through the rear view mirror. Government agencies report lagging indicators when business requires leading ones. Data is collected based on numbers of job and numbers of workers without regard to the skills, knowledge, experience, or sophistication required.  And with a dynamically changing and often volatile environment, near real-time data for employment and productivity is essential.

Here are a few examples of trends and changes that are disrupting how our workforce works today…or doesn’t work. It seems these shifts are often ignored or lost when the volume of bureaucratic and political noise increases. And equally if not more impactful is the fact that these trends are not isolated incidents but concurrent events – a Perfect Labor Storm, creating changes that are complex and far-reaching yet subtle. The end result is a continuously evolving labor market that is structurally different than anything anyone of us imagined.

As Yogi Berra once said, “The future ain’t what it used to be,” which is an apt description of the current and future state of our workforce.

86 percent of US jobs today involve offering services instead of making things.

Since the 60s when many Baby Boomers entered the workforce, our economy has shifted. Fifty years ago, just 60 percent of the workforce was employed in service jobs.  Today it’s almost 84 percent, a 40 percent increase.  Simultaneously goods-producing jobs were cut in half, dropped to less than 1 out of 8.  Many workplace policies and mindsets still ignore how the very definition of work and jobs has changed.

Skilled jobs grew 2-times faster than unskilled jobs.

Unfortunately for many of the workers educated and trained in the 20th century, they focused on technical skills required for routine jobs. Today it’s cognitive skills plus expertise and knowledge in a given skill that is in high demand.  The demand for high skilled, non-routine cognitive workers is 2 times more than just 30 years ago while the demand for all other jobs is stagnant. It is estimated that by 2019, 17 percent of workers will only use mobile devices to do their jobs (Cisco).

People are working longer, and working after they retire from their main careers.

For many reasons, including the near extinction of defined benefit retirement plans and a significant drop in employer sponsored plans, people are not leaving the workforce. Many baby boomers, forecast to leave jobs at their earliest eligibility, are staying put…or starting second careers.  Between 2006 and 2016, the 65 and older workforce grew nearly 84 percent; 55 to 64 year olds grew over 36 percent. The core of the workforce (at least the workforce we knew since the Industrial Revolution, 25 to 54 year olds grew only 2.4 percent.

Millennials have become the biggest population of workers, starting this year.

For many employers, “doomsday” has arrived.  Millennials (age 15-35) now make up 35 percent of the workforce. With both Baby Boomers and Gen X holding down about 31 percent each, that officially makes the Millennial Generation a force to be reckoned with.  Compare that to just 5 years ago when the Millennials made up only 25 percent and 10 years ago at 15 percent. That’s a problem for companies who are still trying to figure out how to attract, manage, and retain a younger generation with very different values than the Baby Boomer who re-wrote many of the workforce rules 50 years earlier.

What Would You Do If Your Candidate Refused To…

The war for talent is hot.  Last week I wrote about a company who recently lost many of its top sales producers to a competitor.  This week a client called me in a panic after 3 key skilled workers left – at the start of his busiest season. Employee turnover is climbing and several surveys recently reported that the time to fill vacancies has increased since the beginning of the year.  (It has been steadily rising before then!)

Confused workerWith skilled workers hard to find, it is tempting to compromise hiring requirements and standard practices and to make exceptions for some candidates.

So how far would you (and your company) go to make an exception for that hard-to-find skilled applicant who tries to circumvent your process or refuses to comply with your selection process?

I hope you will take just a minute to respond to the 5-question survey at the end of the article.  I plan to report back the results (if we have enough participation) at the end of the month.

Let’s begin by asking you to imagine this scenario. For many of you, you don’t have to think too hard – the situation is very real.

You have a job opening for a very key position in your company.  After exhaustive sourcing and recruiting for several months, a colleague calls you with the name and contact information of a candidate who appears to meet all your qualifications and more. You immediately contact her but are met with one or more of the following objections. What would you do? Would you stick to your process or make exceptions?

She submitted a resume directly to you via your email or LinkedIn account but refused to complete one through your online system.She refused to complete parts of the application until after she was granted an interview.

She refused to answer certain interview questions because she considered them too personal (even if they were legal, job relevant, and important to your hiring process.)

She refused to complete a personality test (or other types of testing) because she believes her personality should have nothing to do with her job qualifications.

She refuses to join you and a few co-workers for lunch because she “keeps her personal and business lives separate.

We’d love to hear your opinions. Please click here and take a minute to complete the anonymous 5-question survey. We will post results at the end of the month.

9 Workforce Trends Worth Knowing

In 1999 I coined the term “Perfect Labor Storm” to describe the multiple factors working in concert to create a critical shortage of workers.  At that time the situation was a bit different – more jobs were being created than we had available working age adults.

Well 16 years later, the Perfect Labor Storm is still alive and growing. While its consequences are still the same- employers struggling to find enough qualified workers. Today we have enough “bodies” but the quality and quantity of skills required is much more advanced. Today we have enough workers to fill every job and still have a surplus. The problem is that not every worker has the skills for the jobs being created.

What follows is a list of trends that every employer (and job seeker) should know. While the exact number or percentage of jobs is off a few digits or the timing is not exact, the trends are real. They are changing the future of work and the workplace as you read this. While the exact timing of the Perfect Labor Storm is always a work in progress, the path on which we are headed is inevitable.

1. Cheaper, better robots will replace human workers in the world’s factories at a faster pace over the next decade. Only 10 percent of jobs that can be automated have been taken by robots. By 2025, machines will take over 23 percent of jobs.

Source: Boston Consulting Group

 

2. Sophisticated algorithms could substitute for approximately 140 million full-time knowledge workers worldwide.

Source: The Future of Employment: How Susceptible are Jobs to Computerisation,  Frey and Osborne

 

3. Jobs employing up to 47 percent of today’s workers are likely to disappear by 2033.

Source: Trends Magazine, November 2013

 

4. Workers aged 55 and older will make up approximately 26 percent of the labor force by 2022; up from 14 percent in 2002 and 21 percent in 2012.

Source: Bureau of Labor Statistics

 

5. Four out of 5 CEOs worry about availability of key skills

Source: PricewaterhouseCoopers LLP

 

6. Only 42 percent of executives believe that students entering the workforce are prepared for the available jobs; even worse, only 45 percent of these young people think that they are prepared. Maybe worst of all, 72 percent of education providers believe the young people are prepared.6.

Source: McKinsey and Company

 

7. Thirteen (13) percent projected increase in STEM jobs from 2012 to 2022

Six (6) percent projected increase in STEM graduates 2011-2019

Source: PricewaterhouseCoopers LLP

 

8. More than 80% of manufacturers report a moderate to severe shortage in highly skilled resources.

Source: Manufacturing Institute

 

9. In 2015 the business community must face the reality that there is little slack in the U.S. labor market. As skills shortages grow, businesses will need to begin raising wages to attract and keep workers for the long term.

Source: Edward Gordon, Imperial Consulting Group

More Under Skilled Job Applicants Coming Your Way

The last thing that employers who are seeking skilled workers needs is job hunting advice like this:

4 Steps to Getting Hired When You Aren’t Completely Qualified

That is the headline of a recent Fast Company article. The subtitle continues:

Don’t meet all the requirements for the next move in your career? No matter!

Candidate Sourcing Resu-mess,Applicant ProcessingPosting a job and receiving applications from enough qualified candidates is driving managers crazy. In a recent survey conducted by PeopleMatter, 89 percent of the companies surveyed are having a difficult time recruiting enough qualified workers.  Seventy percent do not find it easy to identify the best candidates quickly. The problem is compounded by high turnover rates and costs (70 percent).

With jobs requiring more skills, often specialized, advice to fake it until you make it sounds like nails screeching on a blackboard to the frustrated hiring manager.

The article then opens with these pearls of wisdom:

… if you’re in the market for a career move, you don’t have to limit your search to positions you totally qualify for.

WOW!  (That advice might even warrant a WTF!)

The truth is the finding skilled workers is getting harder.  There are simply more skilled jobs than there are people who can do the work.  The problem is exacerbated when companies “upcredential,” the process of requiring college degrees for jobs currently performed by high school grads. And as long as we discussing things employers don’ t want to hear – companies are only seeing the tip of the iceberg when it comes to finding enough skilled workers.

As Boomers retire and technological disruptions mount, skill gaps will widen and shortages will mount. Finding qualified workers will become more difficult and the time to hire will increase. Receiving more unqualified applicants without a plan and process to screen out high-risk and poorly qualified applicants is like dumping more hay on the stack, burying the prize deeper. Advice like that suggested in this article only creates more work and requires more resources to sift through all the noise to find that one-of-a-kind diamond employee.

But to be fair, the advice offered in the article is not totally off the wall. There are good reasons for managers to look outside traditional credentials and experience when hiring.  When focused on competencies like innovative capacity, customer service, managing people, planning and organizing – these skills are transferable from one job to another, from one industry to another.  For sure, some jobs require technical skills and/or a level of proficiency.  But many positions don’t.  And even when they do, technical and administrative skills can be training and developed.  If the candidate has the potential, abilities, and motivation, then hiring a candidate who doesn’t fit the traditional mold makes sense.

But that requires a high functioning screening and selection process. And most companies don’t have the systems, the technologies, or the processes in place to quickly screen out poor fits and identify high potentials accurately.  In many organizations, screening and selection is still a people-intensive fly-by-the-seat-of-your-pants crap shoot.

So even when a company thinks they have figured out how to manage the flow of candidates, someone comes a long and throws a wrench into the works – like suggesting that candidates reach for the stars even if they don’t have the qualifications.

Is The MBA and Other Graduate School Degrees Worth It?

(Thanks to Patti Connor for revisiting this topic and writing this guest post.)

In recent years, it has become difficult to defend the costs of graduate school degrees, specifically the MBA. We wrote an article in 2012 titled MBA Tuition Doubles; Salaries Flat – Is The MBA Worth It?, in which we explored this issue with an eye on the numbers. At the time, the picture was quite clear: MBA tuition was growing increasingly more expensive, and the degree was doing less and less to guarantee any type of career boost. Strictly from a financial perspective, the idea of paying for MBA education seemed foolish.

Career ladderBut have things changed since 2012? Inc addressed this issue in the fall of 2014 with an updated infographic analyzing the benefits of an MBA from a top-10 program. It’s tricky to address the question specifically from an ROI standpoint while looking only at top programs, but it’s fair to say that the overall picture is at least slightly more positive. According to the infographic, 2014 forecasted a 16% growth in MBA hiring rates. Even more encouragingly, the article looked at “the 5-year MBA gain”: essentially, the net cumulative amount an MBA graduate would earn in five years compared to what he or she would have made with a previous career path. The lowest amount for a top-10 program was just under $60,000, with the highest just under $100,000.

Keep in mind these aren’t total income numbers; they’re the differences between MBA career earnings and pre-MBA career earnings. Those are pretty significant differences, and they make the idea of paying back tuition loans, at least for top programs (where it’s often been toughest in the past), seem more feasible than in previous years.

It’s also worth addressing that the bulk of these numbers, and this conversation in general, comes with consideration of the job market. We’re inclined to measure the value of an MBA by how many graduates are hired and what their career paths offer. But in 2015, that’s not the whole story, as many also seek advanced business degrees for purposes of personal entrepreneurship. Some may argue that a path to personal entrepreneurship makes an MBA even less necessary—why pay $100,000 or more for a degree when you’re trying to start your own company and don’t need to impress anyone with your resume? But for entrepreneurship, it’s important to measure the potential benefits of an MBA from a perspective of personal growth and direction.

In some ways, this aspect of the MBA experience begins even with the application and continues throughout the process of earning the degree. Menlo Coaching, an online service meant to help with the MBA application and school selection process, makes it clear that one of the most significant parts of pursuing a business degree is determining one’s own professional goals and ambitions. The site’s testimonials reveal a number of clients who are grateful for the assistance they receive in realizing and clarifying these goals and ambitions, and many find that this personal exploration ultimately becomes the beginning of a career in business or entrepreneurship. In short, the process of earning an MBA can give students the nudge they need to figure out what it is they truly want to do, and how best to accomplish it. Particularly for hopeful entrepreneurs, this benefit can outweigh any financial concerns.

Similarly, many young people find a benefit in pursuing an MBA simply out of a desire to change course or switch careers. This may sound somewhat flippant to those for whom an MBA is an oppressive financial burden. However, for those who have solid careers and are looking for something different, it’s a valid perspective from which to determine the value of an MBA. In its own analysis of the value of an MBA, Bloomberg addressed this perspective, stating that “many go to business school less for the potential financial return than from a twenty-something desire to change course.” This is a common reason for graduate school in general. Many graduate college, start respectable careers, and find in their mid- or late-twenties that they want to change course. Graduate school, and for the sake of this discussion an MBA, can serve as a valuable catalyst in such cases.

None of this is to completely defend the cost of an MBA. There are certainly many people for whom the wiser course of action is to continue in a career and never bother with the cost of even more education. But the outlook is somewhat better than when we last addressed this topic in 2012, so don’t discount the MBA’s benefits completely.

Work Trends in 2015 Are Anything but Routine

The future of work (and life in general) is not what it used to be. Nor is the future what many of us were told it would be. 

 

This is true for every company and every person.  But it seems even more relevant for those of us involved in human resources.

 

paradigmaHuman resources professionals find themselves working harder and running faster. It’s no wonder why because they are really running two races simultaneously.  First of all many are trying to close the gap between the needs of the past and demands of the present.  Progress has been slow due to the diminutive endorsement given it by management and the failure of HR to adapt and respond fast enough. Concurrently many are attempting to respond to a very different looking future. Whether it is recruiting candidates, complying with new regulations, or managing what is now a 5-generational workforce (Yes – the oldest Gen Z is graduating college this year!), the workplace and business environment are in a constant state of flux. Policies, tools, and strategies that seemed to work well yesterday have almost no effect and relevance today.  

 

Depending upon your attitude, all this change is either daunting or exciting. It sets a cascade of emotions in place that leads a person to believe in economic apocalypse or entrepreneur-driven optimism. It’s your choice how you respond to these changes.  But regardless of which option you choose, the following mega-trends will shape your workplace, your workforce, and your outlook in the coming months. 

 

With that I offer my list of disruptive mega trends for 2015. Using the proverbial forest and trees idiom, here’s a view of the forest:

 

#1 – Average is over. Tom Friedman hit the proverbial nail on the head with this one: “In the past, workers with average skills, doing an average job, could earn an average lifestyle. But, today, average is officially over. Being average just won’t earn you what it used to. It can’t when so many more employers have so much more access to so much more above average cheap foreign labor, cheap robotics, cheap software, cheap automation and cheap genius…Average is over.”

 

#2 Change is happening faster. Change has always made some jobs obsolete but created new jobs, new products, and new services. But this time it’s different. It’s happening at an unprecedented rate. What once took several decades and even a century or more to play out, now evolves in a few years. With each advance in globalization and the technology revolution, the best jobs will require workers to have more skills and different education to make them merely average.

 

#3 Productivity and worker’s pay gap widens. It’s inevitable. Technology and global competition will continue to force companies to compete by increasing productivity. This will continue to push the demand for skilled workers higher. For this skilled worker group, wages will rise significantly. But let’s be clear.  Wage stagnation will continue for most average skilled and under-skilled workers – just like as it has since 1973. The writing has been on the wall for over 40 years. Yes, that’s correct – for over 40 years. Wage stagnation compared to productivity gains has essentially been ignored. While focused on an impressive productivity increase of 74 percent, the hourly wages of middle-wage workers were stagnant, rising just 6 percent-less than 0.2 percent per year (Economic Policy Institute). And most of that increase is thanks to a brief burst in wages during the late 1990s. The wages of low-wage workers fared even worse, falling 5 percent.  Those trends will continue for at least the near future.

 

#4 Non-degree credentials will begin to replace traditional educational requirements for jobs. Traditional college education has missed the boat. The attempt to put everything into a 2-year or 4-year framework has left businesses struggling to fill jobs and students gasping under the weight of debt. While the academic and government bureaucrats propose ways to make traditional education more affordable (and effective), the “micro college” will begin to emerge. As Michelle Weise so eloquently described in a recent Wall Street Journal op-ed, “The call for more education compensates for the imprecise signaling power of a college degree.”

 

 creates a need for new skills and more training. Every time a business automates a process, upgrades software, or purchases new equipment, workers need to learn new skills and retire some old ones. Whether the skills are for more basic jobs like data entry and driving a truck or advanced skills for virtual reality, specialized 3D scanning, 3D printing, mobile apps, Internet of Things, flying drones, or reputation management, the need for tech-savvy fast-to-adapt talent pools is growing. It’s growing quickly. And the supply is dwindling – or at the very least not growing fast enough.

7 Trends That Will Change the Way You Hire, Manage, and Retain in 2015

“Average is over,” according to Tom Friedman and the pace of change is accelerating.  These trends spell both doom and opportunity to the world of human resources. Beneath the cloud of these megatrends lies a groundswell of trends likely to change the way companies hire, manage, and motivate employees.

What are these trends that will pop-up during the year that will disrupt and potentially derail many company strategic and business plans?  What do these trends mean for companies that plan to grow with more skilled workers.

New Skills#1 – Skills gaps will widen and worsen. Increasing productivity is the key to remaining competitive. As a result, the competition for workers with the right skills and temperament will increase dramatically.

#2 – Skilled worker wages will rise.  The price to attract and retain a skilled worker will rise. In some industries and/or geographies the increases may be substantial.  Wages for the “typical” worker with average- or low-skills will continue to stagnate – unless of course it is artificially propped up by minimum wage legislation.

#3 – Flying by the seat of your HR pants is dead. HR analytics if available at all has been abysmal. Traditional means of recruiting, screening, and selection are becoming increasingly ineffective. Hunches and gut instinct have no place in talent management. The need to manage talent with the scrutiny and precision companies use for cash flow, inventory, logistics, and supply chain is here and now.

#4 – Source wider and mine deeper. To find talent companies will need to throw out a wide net. That means the quantity of applicants will increase. The diamond in the rough will be buried deeper. Recruiters will need to mine more data faster and more accurately, requiring the use of technology.

#5 – One HR hat does not fill all.  Managing compensation, benefits, and compliance is overwhelming.  Recruiting and retention becomes an after-thought. Like most other jobs, the skill requirements for HR positions are changing. The sooner those companies realize that sourcing, recruiting, selection, and retention require specialized skills and dedicated responsibilities, the more effectively they will compete in the war for talent.

#6 – The employee turnover door will revolve faster. With rising demand comes increased employee turnover. A recent ADP report revealed that turnover is on the rise. But so far the change has been largely industry and/or geography specific. Turnover is not universal – yet. But that should not lull companies into complacency. The competition for key skilled workers is just heating up.  With wage growth for a worker who changes jobs nearly 500 percent more than those who stay (ADP Workforce Vitality Index 2014), companies will need to improve employee engagement significantly and compensate competitively and aggressively.

#7 – Company-led training and development is overdue. As business models evolve and get cannibalized by new technologies, employees need to stay employable and job ready. Waiting for the government and academia to fix the skills gap is foolish. As the comedian Ron White says, “you can’t fix stupid.” Re-skilling America won’t happen over-night. For the time being, companies that expect to have an ample supply of skilled workers need to provide the training and resources to upgrade skills and the opportunity to re-train for new jobs.