Workforce and hiring trends amd demographics
R.I.P. to the the way it was. An epic shift is underway. From social media to the Internet of Things, digital fabrication to robotics, virtual reality to synthetic biology, new technologies are rewriting the playbook for managing people and leading organizations. Is your business future proof?
For some this shift is the light at the end of the tunnel following years of anticipation. Hope and opportunity await.
For others it’s the feared smack-down as the oncoming locomotive’s light accelerates toward them. Today is the future that was forecast for decades, but ignored in the hope these predictions were just were just hype and hot air. Time has run out. Reality is ready to crush those clinging to the status quo and reward those who see possibilities.
I’ve been tracking this shift for nearly two decades, beginning with my forecast of The Perfect Labor Storm as early as 1999. Few surprises revealed themselves other than a Great Recession and unprecedented acceleration in technology that only disrupted the traditional ways we work and live faster and deeper. For employers and employees alike, this convergence of globalization, demographics, and technology isn’t just transforming fundamental employer-employee relationships. It’s blowing them up.
There is no going back.
We live in a world with changing labor markets, changing workforce, and even changes in the very nature of work. Events are unfolding in plain sight. The default presumption that employers offer jobs that are long-term, full-time, and on-site with longitudinal career paths are history. Employment relationships will be increasingly short-term, transactional, and variable.
Anything can become obsolete at any time.
The pace of technological advances and disruption is unprecedented…and it’s just not in computing. Every aspect of our lives and business can be impacted without notice. Think communication, transportation, entertainment, medicine, education. Companies continually restructure, reengineer, downsize, merge or acquire. Everything and everyone is vulnerable. Who ever imagined that venerable institutions including governments could run out of money?
Loyalty – Part 1
Continual employment is dead. Job security is history. Responding to both disruptions and possibilities, organizations eliminate jobs regardless of employees’ length of service. They implement technology to replace jobs. They hire fewer full-time employees and more contingent workers. Employers will work hard to optimize human resources: having the right people in the right place at the right time, moving away from offering long-term stable employment and toward a more efficient supply-chain management approach.
Loyalty – Part 2
The free agent mindset rules. Without credible long-term promises and job security from employers, employees are learning to live one day at a time. Free agency is no longer a stigma – it’s a career strategy. Baby Boomers seek free-agency as they expect to be active and work long after traditional retirement. Millennials and Generation Z have never known the world any other way. Employees are not dumb, deaf, and blind. Not only do most employees worry about wages and benefits but they live under a veil of uncertainty their jobs will be automated or eliminated. They see how susceptible their organization is to uncontrollable events – from global economics to terrorism. They worry if their company’s management is resilient and smart enough to compete in the marketplace. And to put the final nail in the traditional employment coffin, turnover is increasing among supervisors and managers. Thanks to better job opportunities and the rising tide of Baby Boomer retirements, the loss of direct supervisors has a subtle but profound impact on productivity and retention. These supervisors are the people within the company who know employees best. Without them, anxiety skyrockets and ties to the organization are cut.
These are just a few of the factors creating this epic shift. How will they affect your company?
Managing people will only get harder.
It’s always been hard to manage people. There have always been people of all types and generations working side by side in the workplace. But today there are as many as six generations. Generational gaps merely skim the surface of how different the workforce is and will be. Diversity, gender equality, sexual preference, and skill gaps exponentially increase the number of issues confronting managers every day, not to mention run-of-the mill interpersonal differences. It’s like the potential for disruption has been injected with steroids. It’s no wonder that people management has become a thriving and growing industry!
Beware the “youth bubble.”
Millennials and Generation Z are bringing a whole new set of expectations and behavior.Organizations that rely on young workers will face the challenge of an increasingly high-maintenance workforce. Compensation, benefits, work schedules, work conditions, rewards and recognition are still offered like it’s the Baby Boomer generation that is in control. What worked in the full-time, on-site, job secure past will surely fall short in the new normal of uncertainty and change.
Churn and squeeze.
With fewer long-term traditional employees, a revolving door will become the norm. Best practice metrics of retention and employee turnover will become irrelevant…or at least be used in a different context. Every person from the senior executive to the warehouse worker will be squeezed to produce more work faster with fewer resources. To maximize efficiency and productivity, organizations will have to staff-up (and down quickly) while acquiring a higher quality worker. In addition to figuring out what full-time and part-time classifications mean, management will need to deal with managing more telecommuters and free agent workers as well as consultants and other contingent-type employees. Employers will need to be nimble, flexible, fluid, and smart in how they recruit, hire, and manage employees.
To remain competitive, companies must recruit faster, hire smarter, and manage better. The ability to get the right people on board, up to speed, and delivering results quickly will be the key.
So I’ll ask the question again – is your business future-proof?
Are you a member of Generation Flux? This isn’t just another name for the generation to follow the Millennials (although it could be.) Unlike all the others generation descriptions, Generation Flux has no age requirement.
Gen Flux is less a demographic designation than a psychographic one, focused solely on interests, attitudes, and opinions. What defines Gen Flux is a mind-set that embraces uncertainty and ambiguity. It tolerates, if not embraces, recalibrating careers, continuous innovation, fluid business models, and vulnerable assumptions.
Up until recently, change progressed at such a steady, almost rhythmic pace that it allowed the innovator and entrepreneur to co-exist in a world of moving forward while retaining its hold on the past. Whether he created a new product, strategy, service, or developed a specialized skill, he created an asset that could sustain itself for decades. Often times, the innovation survived multiple generations, allowing the creator to pass the business or royalties from a product or service on to his children and their children.
But within the past few decades and especially since the turn of the century, this paradigm shifted.
The life expectancy of a typical business or product model has shrunk from decades to years. In many industries and businesses, the life of a model is now measured in terms of an Internet year, approximately 90 days. That means while delivering this year’s model to customers, you need to simultaneously prepare for its extinction while creating and preparing a newer, improved model for next year. That shifts the entire course of strategic planning
This unprecedented confluence of innovations has compressed the time between creation to extinction. Change is not only constant, but constantly accelerating. Nostalgia is dead. Status quo is eventually lethal. What we perceive as normal is subject to the blinders we’ve grown accustomed to – inherited from and grown in the past. For any business so in love with its past that it can’t imagine a future without it, its own demise is set in motion. Management feels the ship moving but ignores signs it is sinking.
Change itself isn’t the only cause of self-induced extinction because change is something that has existed since the beginning of time. What is different this time is the almost exponential increase in the velocity of change. For example, it took 38 years for 50 million people to adopt the radio but only 13 years for 50 million people to own a television. It took Facebook less than 5 years to acquire 50 million users and by 2013, nearly a billion people signed on.
Years have no move to days. When the Palm introduced its Pilot hand-held device, it took 18 months to sell 1 million units. It only took Apple 24 hours to sell its first 1 million 4S phones.
The business climate, it is turning out, is a lot like the weather. If you don’t like what you see, wait a few hours. But once a storm passes, it doesn’t mean things go back to the way they were. Just like the earth around us, every weather event changes the environment and landscape. The same goes for business.
The problem is that our ability to see and predict the future accurately is declining, fueled by all the complex interactions set in place by the intersection and interaction of technology and globalization. Predicting what will happen next has gotten exponentially harder. Ambiguity and complexity has invaded management’s boardroom and worker’s cubicles.
Any business that ignores these transformations does so at its own peril. Despite recession, currency crises, and tremors of financial instability, the pace of disruption is roaring ahead. The frictionless spread of information and the expansion of personal, corporate, and global networks have plenty of room to run. And here’s the conundrum: When businesspeople search for the right forecast–the road map and model that will define the next era–no credible long-term picture emerges. There is one certainty, however. The next decade or two will be defined more by fluidity than by any new, settled paradigm; if there is a pattern to all this, it is that there is no pattern. The most valuable insight is that we are, in a critical sense, in a time of chaos. (Fast Company)
To thrive in this new normal requires a whole new approach. Not everyone will join Generation Flux, but to be successful, businesses and individuals will have to work at it. Unfortunate for many, the vast bulk of business, institutions, and organizations are not built for flux. Few traditional career tracks or educational curriculum train us for an era where the most important skill is the ability to acquire new skills.
Future-focus is a signature trait of Generation Flux. Trying to replicate what worked yesterday only leaves you and your business vulnerable. There is no question that we are in a new world. Therefore only some people and some businesses will thrive.
Will you be among them? Do you have the right management and workforce to steer your ship through the uncharted and unpredictable future?
There is an elephant in the management suite – an impending talent pipeline crisis. The crisis doesn’t stop at the top. There is also a serious shortage of skilled workers for key positions, from maintenance positions to service technicians to nursing. The problem is only going to get worse. Succession planning needs more attention than lip service.
According to the Department of Labor by 2018, 1 in 4 workers will be over the age of 55. The need to build a talent pipeline is critical and the clock is ticking.
The process of building this pipeline is often called succession planning. Unfortunately the mere mention of succession planning infers senior leadership. At best it reaches down the ladder to management. But rarely do organizations identify critical key roles that left unfilled or filled with the wrong employee could cost the organization revenues and competitive advantage.
Just yesterday morning I described to a local SHRM chapter why the scope of succession planning in most organizations is too narrow. A definition from a State of Iowa Workplace Planning document offers one of the most accurate and inclusive descriptions:
Succession planning is a process whereby organizations ensure that employees are recruited and/or developed to fill each key role within the organization.
A recent article described two types of succession planning: Operational Workforce Planning and Strategic Workforce Planning.
Operational Workforce Planning typically occurs with your annual budgeting cycle and forecasts staffing needs and planning for the coming year to 18 months. Sixty-seven percent of all companies conduct workforce planning on a purely operational and as-needed basis.
Strategic Workforce Planning looks into the future planning for and evaluating your organization’s staffing plans and forecasts one to five years even ten years into the future. A Strategic Workforce Plan is a full-scale evaluation and plan that identifies rick, change, and potential areas of opportunity.
To management, a strategic workforce plan looks like a daunting task. To some extent it is. But the failure to identify the risk factors associated with retaining and recruiting for key roles is significant.
During the SHRM meeting, a few members identified key positions in their organizations that remain unfilled and the risk for future openings was high. The HR manager for a poultry processor noted that the lack of maintenance workers put quality and safety at risk. A manufacturer cited the inability to recruit service technicians (installers) as one reason production has been cut and revenue projections reduced.
Despite the known and associated challenges of recruiting skilled workers not a single hand was raised when I asked the following questions:
Organizations must begin to stop giving lip service to the importance of succession planning. According to a new CareerBuilder study, seven out of 10 workers admit that they search for jobs as part of their “regular routine.” Thirty-five percent say that they start searching for a job within weeks of starting a new position. The risk of losing additional key employees in the future is substantial. The risk is imminent.
It behooves every organization – large and small – to take time to build a critical talent plan and pipeline. I offer the following 8 steps.
Jim Collins, in his new book Great by Choice, tells us that “we cannot predict the future. But we can create it.” (That’s actually a Peter Drucker quote, which Collins later acknowledges.)
I’m not sure I totally agree that we can create our future. In fact, I believe feeling that we can create the future is a bit cocky and naïve. But I wholeheartedly agree we can change our future and absolutely choose how we navigate it.
What Collins tells us is that despite a devastating recession and stubborn unemployment, many companies are navigating these times of uncertainty quite well. Some are even managing to thrive despite the vulnerability, disruptions, and unanticipated events. And a select few won’t just thrive, they will prevail.
So what is it that some companies do to allow them to thrive in unstable environments and manage effectively despite seemingly out-of-control, unpredictable, opposing forces while their competitors flounder or disappear.
His most current research revealed a few findings that run counter to our intuition and contradict a lot of the management folklore popping up on the front page of the Wall Street Journal and hyped by the business news talk-jocks on CNBC.
1. For example, Collins refutes the myth that “successful leaders in a turbulent world are bold, risk-seeking visionaries.” Instead his research showed that the best leaders “were not more risk taking, more bold, more visionary, and more creative… They were more disciplined, more empirical, and more paranoid.”
Personally I believe it might be the paranoia that creates the tipping point between leaders that prevail and those that fail. For obvious reasons we’re not talking about clinical paranoia but a healthy dose of fear and anxiety. Collins call this productive paranoia. “Productive” paranoia instills a sense of humility and vulnerability. Without it, we get hubris and the resulting detachment from reality. Paranoia in the most successful leaders drives an uncanny awareness of the marketplace, the global business environment, and competition.
2. Another myth that Collins blew up is that “a threat-filled world favors the speedy; you’re either the quick or the dead.” Contrary to popular theory, 10X leaders, Collins’ term for these prevailing leaders, is that they figure out “when to go fast, and when not to.”
3. A third shattered myth is that “great enterprises with 10X success have a lot more good luck.” But both the successful and failed companies had luck. It was the successful leader that knew what to do with the luck you get.
Collins offers a few other shattered myths but I think you get the point here without enumerating them: popular myths relating to why one organization succeeds and another fails are not always true. You’ll likely read a lot more in the future about the research and recommendations gleaned from Great by Choice on this blog and elsewhere. But I’d live to close this post with the following challenge:
Knowing now what makes a great leader, how do you create your future? What are you going to do differently? How do you know when you recruit your next leader(s) if they have the ability to lead, possess a sense of vulnerability, know when to go fact and when not to, and know what to do with luck when they get it?
Business life has always featured the unpredictable, the surprising, and the unexpected. What’s changed is that the level of complexity that people have to cope with has simply become…..more complex. To further complicate complexity, the pace of the change has accelerated. In just a short time, most businesses have evolved from operating in a simple system to a complex marketplace. That makes it harder to make sense of things, especially if the people making the decisions and solving the problems continue to operate in a simple cause-and-effect world.
The problem with complexity is that it’s harder to plan ahead and to solve problems when they arise. That’s because complex systems interact in unexpected ways, unlike simple systems where understanding one action can reliably predict another. That uncertainty alone rewrites the managerial and leadership competencies required to compete and thrive effectively in today’s business ecosystem.
At the core of the problem is lack of awareness between what constitutes simple, complicated, and complex. A recent Harvard Business Review article (September 2010) offers an insightful explanation into the differences. The attempt by many executives and consultants to simplify complex systems performs a significant disservice to both the company and likely his or her careers.
For example, simple systems rely on the same action producing the same results each time. Simple systems have few variable interactions. Complicated systems, on the other hand, have many moving parts but they operate in patterned ways – follow the patterns and you can make accurate predictions about how a complicated system might behave.
Complex systems differ from both complicated and simple systems in that the patterns of interactions are constantly changing based on three properties:
1. Multiplicity – the number of potentially interacting elements
2. Interdependency – the connectivity between the elements
3. Diversity – the degree of differences between the elements.
Knowing the starting point in a simple and complicated system, one can usually predict outcomes. But in a complex system, identifying the starting point may still result in different results.
The result is that companies that used to function within simple systems and contained markets now face competition from unexpected players. Executives and managers who attempt to simplify the complex do not understand the world we live in or the consequences of their actions. As the world economies and business markets become more interconnected, two management challenges present themselves: unintended consequences and making sense of a situation. The ability to understand and manage complex systems is clearly an essential competency for all managers and executives moving forward.
The biggest hindrance to minimizing the unintended consequences and making sense of complexity is that it’s hard to observe and comprehend a highly diverse array of relationship from one viewpoint. We are further hampered by cognitive limits to understanding the effects of other people’s actions on our own and our own actions on others. Unfortunately many executives believe they can take in and make sense of more information than research suggests they can.
Companies clearly need a better way to manage complexity. The danger of misunderstanding complexity is that good intentions don’t adequately anticipate the intended results and unanticipated consequences. Humans like to link cause and effect but cause does not always lead to a linear effect in complex environments. Making decisions based on simple systems logic bets that the future will be like the past. But we clearly live in a more complicated and complex world. Complexity isn’t the problem as many executives and managers would like to have us believe. The problem is how companies respond to it.
What do you feel are the essential competencies required by managers and executives moving forward
Depending on your frame of reference, asking the question “can the U.S. survive without Jobs?” will elicit a variety of responses. Responses will inevitably be influenced by political affiliation but my question is much broader than that. Because jobs refer to both sluggish job creation and the tragic loss of Steve Jobs.
Both circumstances pose an ominous threat to our role as leader of the free world. Solutions to replace the innovative genius of Jobs and jump start sustainable job creation will remain elusive for some time to come.
Let me start with Steve Jobs. Jobs changed our lives forever, much like Thomas Edison, Henry Ford, and Walt Disney. Jobs didn’t invent the personal computer, the mouse, or the graphical user interface (GUI). What he did brilliantly, according to a column in the Washington Times, was to bring the inventions of others together in beautifully designed packages, then to show us that we’d wanted them desperately all along.
While Jobs like Edison, Ford, or Disney can’t claim to be the father or the originator of the industry they are in, they have a claim on how they changed their respective industries forever.
America is now desperately seeking the next American visionary. By definition, it’s someone on the cusp of an entirely new industry with an as-yet unrealized potential to change the culture. Like Jobs, the next innovative genius will have a “disruptive” quality, believing that constant change is the only way to stay out in front. Like Jobs and his predecessors, the next visionary will create a new market, lead the market, and let companies follow behind. Who is out there among us that we currently see as the idealist or crackpot who will ultimately breakthrough and radically change the way people live.
Regrettably the landscape in which Edison, Ford, Disney, and Jobs turned their vision into reality has turned sour. All these men started small working against all odds, often alone. Entrepreneurship and small business in their day was not only supported but encouraged. Government – local, state, and federal – provided incentives to start up a business, not a bureaucratic labyrinth that was all but impossible to navigate. And if a small business entrepreneur was successful, taxes and other regulations didn’t bleed the entrepreneurial spirit dry. Not only is the U.S.climate not conducive to starting a business and taking risk, we now have competition from rising entrepreneurial juggernauts China and India.
Jobs will be remembered both for the life-changing products he created and for the fact that he was able to sit down, think clearly, and execute his ideas. Given the current political climate and global economic challenge, we are desperately in need of jobs and Jobs. Unfortunately, you just can’t create a committee and select his replacement and the U.S. landscape is becoming repressive and oppressive for small business, entrepreneurshp and innovation. People like Jobs aren’t looking for a job. They are not even pursuing a career. What they seek is a world different than nearly all of us can even imagine. And they will go to places where they are free to innovate and transform ideas into reality.
Right now the loss of Jobs and the loss of jobs go hand in hand. Without innovation that sparks new business and entrepreneurship that creates jobs, unemployment will remain high, GDP will languish, and our economy will be sluggish.
In 1999, 70% of workers considered it a good time to be looking for a quality job. Only 12% believed that in 2009.
Similarly, 64% were confident in 1999 that they could find a new job as good as or better than their previous job, while only 20% believe that today.
Adding to the stress of a painful recession, it also turns out that forecasting the fastest growing occupations over 10 years has proven to be an inexact science. Many job seekers who took the advice of career planners have found themselves stuck in jobs that have been stagnant if not significantly reduced in demand. Unlike just a decade ago, job seekers are taking such projections with a grain of salt.
That’s because the projections released from 1998 through 2008 were mostly wrong. The data shows how difficult it is to predict which occupations will “boom” over the coming decade. For example, the U.S. Bureau of Labor Statistics forecast in 1998 that 439,000 new jobs would be created for computer support specialist. In reality, only 10,000 jobs were created. While health care jobs were certainly that little engine that could during the first decade of the 21st century, personal care and home health aides didn’t fare so well. While 433,000 new jobs were predicted, only 71,000 jobs were created. Being a systems analyst was possibly the worst place to be at least in the technology sector. While the system analyst was projected to be the hot job of the 21st century, 85,000 jobs were cut instead of the 577,000 that were supposed to be created.
Those forecasts pale to the train-wreck in job creation for general manager and top executives jobs. The BLS had projected an increase of 551,000 jobs between 1998 and 2008 when the actual economy had reduced the number of these positions by nearly 1.2 million.
The wrong projections aren’t necessarily always bad news. The BLS projected 323,000 new computer engineering jobs but missed the forecast by nearly 50% – over 611,000 new jobs were created. Medical assistants also experienced unanticipated growth when new jobs exceeded the projected number by 86,000 new jobs.
Predicting which occupations will experience the largest growth is very difficult. Job growth depends largely on macroeconomic trends and industry growth, which are difficult to forecast and can be derailed by an economic downturn.
For what it’s worth, the BLS did offer this job forecast in December 2009 for the years 2008-2018. The following jobs are most likely to comprise a major source of employment and job growth over the next few years:
Most of the occupations predicted to experience the largest job growth are ones that cannot be outsourced to other countries.
How can business owners and managers meet the challenges of managing and working in a multi-generational workforce? Check out the podcast I recorded recently with Donald Roeck, host of Delmarva Today, on Public Radio Delmarva -WSDL 90.7 and WSCL 89.5.
Just a few years ago, using the axiom “time heals all wounds” and boomerang worker in the same sentence would seem so…contradictory. Today, many employees who have left a company to pursue opportunity elsewhere have shed the label “traitor” and have been ordained corporate “alumni.”
This shift in attitude has thrown a wrench into the recruiting mindset of many older managers. For Veterans (born before 1946) and Baby Boomers (1946–1964) the very notion of re-hiring an employee who quit their job for greener pastures was at best considered disloyal. Voluntarily leaving a good-paying steady job placed a permanent blemish on a resume and tattooed the employee as a job-hopper, a fate worse than death in the minds of a hiring manager. Even women who left the workforce to give birth to or raise a child were deemed unfit to rehire. “What would stop them from doing it again?” asked managers.
But that was then and this is now. It is way past the time when the Machiavellian temptation to prove a point is a rational approach to hiring and managing talent. The world has changed. The number of employees who remain loyal to a single organization throughout their lifetimes and vice verse is shrinking. Job hopping has been transformed from a character flaw to a career plan. Life-long employment died with Generation X. The free-agent generation changed everything. Building a portable career became more important than getting a gold watch at retirement. And Generation Y took job hopping one step further. If job hopping became a norm for Gen X, then career hopping will be the vehicle for Generation Y to build what they are defining as parallel careers.
But hiring a boomerang worker isn’t only about managing a multi-generation workforce. Hiring a boomerang employee has one of the highest returns on recruiting investment an employer can ask for. The cost to re-hire a boomerang employee has been reported to be one-third to two-third the cost of hiring a “virgin” employee. Little time or effort must be invested in getting to know the candidate. Boomerangs can be valuable to an organization because they understand the culture. They have a history with the business, but bring a fresh perspective from the outside. During their absence, there is a good chance that boomerangs have learned new skills and strategies, achieving success in a different setting. (If they haven’t been successful, why bring them back?) They likely have made new connections and expanded their network.
But hiring boomerang employees shouldn’t be the strategy of choice because it’s cheap and easy. The decision to re-hire an employee should be based on good job fit — that the employee has the right skills for the right job. Not every employee who voluntarily quit or was “dislocated” is a good candidate for re-hire. If anyone was fired or forced out, they should not be on the priority list, unless of course the person or persons who forced them out turned out to be the cause of the problem and not the solution.
For some employees, you should just count your blessings they’re gone. In addition, managers should not assume that just because someone doesn’t leave an organization that they are loyal. It could simply mean they don’t have any place to go!
It is illogical to assume in an era where specific skills are increasingly scarce that separation from an organization has anything to do with loyalty. Individuals with the most valuable skills are constantly offered opportunities, and should a valued employee accept one, it is as much the manager’s fault for failing to retain the employee as it is the employee’s fault for taking advantage of market conditions. Besides, the shift from long-term employment to project work fits the lifestyle of highly skilled Generation X and Generation Y who demand flexible work arrangements and growth opportunities.
The successful re-hiring of a boomerang employee also doesn’t stop with the extension and acceptance of a job offer. Hiring boomerangs can be a bit political. The re-integration of a boomerang is a path fraught with landmines. The players might have changed between the time that the employee left and returned. Interpersonal relationships might have changed too. And dynamics might be tense if the boomerang leapfrogged over an incumbent employee, who might have felt he or she deserved a crack at the job.
Without question, managers need to get over their heartbreak and pride when it comes to re-hiring employees. Rehiring former employees who have the skills you need is not only the right thing to do, it’s good for business.