workforce crisis (revised) 2008

Global Business Services

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Surviving theSurviving theWorkforce CrisisWorkforce Crisis

David DennardDavid DennardProfiles InternationalProfiles International


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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”Future History”


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In 2000, A Fairly “Young” World . . .In 2000, A Fairly “Young” World . . .

Under 5% 5% to 12.4% 12.5% to 20% Above 20%

Source: U.S. Census Bureau

Percent of Population Age 60+ 2000


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. . . Rapidly Aging by 2025. . . Rapidly Aging by 2025

Source: U.S. Census Bureau

Under 5% 5% to 12.4% 12.5% to 20% Above 20%

Percent of Population Age 60+ 2025


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Life ExpectancyLife Expectancy

Average age expectancy throughout human history <18 years

1900: 47 yearsToday: 77 yearsUS – 100 years ago 4% over 65Today 14% and rising Pattern duplicated worldwide


61900 1950 1970 1980 1990 20001910 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.

Dramatic Increase in Life ExpectancyDramatic Increase in Life Expectancy


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The Baby Boom PatternThe Baby Boom Pattern

Source: U.S. Census Bureau International Data Base

1930 1940 1950 1960 1970 1980 1990

4.5

4.0

3.5

3.0

2.5

2.0

Birth

in M

illion

s

The Boom Years: 1946-1964

Reason 2:Reason 2:Dramatic Drop in Birth RatesDramatic Drop in Birth Rates


88Source: Employment Policy Foundation analysis

and projections of Census/BLS and BEA data.

Millions of People

Expected Labor Force and Labor Force Demand

0

50

100

150

200

250

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Labor Needed

Labor Available

Screeching to a Halt:Screeching to a Halt:A Growing Shortage of Workers in the U.SA Growing Shortage of Workers in the U.S..

140142144146148150152154

2004

2005

2006

2007

2008


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Why? Dramatic Drop in Birth RatesWhy? Dramatic Drop in Birth Rates

Source: Age Wave

Tota

l Birt

h Ra

te

3.32.8 2.9

3.6

2.02.5 2.5

4.0

5.9

2.01.7 1.7 1.6 1.4 1.3 1.2

1.8

3.1

0

1

2

3

4

5

6

7

US UK France Canada Japan Germany Italy China India

1960 2000

Total Birth Rate


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Industrialized nations are currently experiencing the Industrialized nations are currently experiencing the leading edge of these population changes 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


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3230

15

26

38

2118

35

16

9

15

8

0

5

10

15

20

25

30

35

40

Looking for a new job at anothercompany

Feeling at a dead end Fear of being laid off or fired

Y X Boomer Traditionalist

Source: The New Employee/Employer Equation, The Concours Group and Age Wave, 2004

Young Workers –Young Workers –The Bad News on EngagementThe Bad News on Engagement

%


12

4539

32

4844

28

5752

35

65 6153

0

10

20

30

40

50

60

70

I really care aboutthe fate of thisorganization

(agree)

I’m willing to put ineffort beyond that normally expected

to help theorganization be

successful (agree)

I find my valuesand the

organization’s aresimilar (agree)




%


1313

33 35

28

4237

28

4946

35

6164

54

0

10

20

30

40

50

60

70

A good deal of my pridecomes from my work and

career (agree)

Time seems to passquickly when I’m at work

(agree)

I often feel energized bymy work




%


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Average tenure for US workers <35Average tenure for US workers <35

Average time in a job is 3 years (the “3 year hump”)

80% stay less than five yearsOne third of all under 35 year olds are in the first year with their employer

Source: The New Employee/Employer Equation Survey


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What Matters to Young WorkersWhat Matters to Young 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%)



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Things to remember about young Things to remember about young workers…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 oftenperceive as “poor work ethic”



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1. Select candidates who have 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 7 Steps to Attract and Retain More Young Workers – Step 1Young Workers – Step 1


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“…persons who had been matched outperformed to a statistically significant degree, those who had not been matched…”

14 Months After Hire:14 Months After Hire:

“Moreover, the differences widened after 14 months”

Source: Herbert M. Greenberg and Jeanne Greenberg, “Job Matching forBetter Sales Performance,” Harvard Business Review, Vol. 58, No. 5.

Six Months After Hire…Six Months After Hire…


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2. Create opportunities that reduce turnover and increase the retention of top performers.

Reduced turnover and increased retention are also results of Job Match.



20Source: Herbert M. Greenberg and Jeanne Greenberg, “Job Matching forBetter Sales Performance,” Harvard Business Review, Vol. 58, No. 5.

WithoutWithoutJob Job

MatchMatch

Job matched candidates stay longer

WithWithJob Job

MatchMatch

24%24%28%28%

5%5%8%8%

Low Turnover IndustryLow Turnover Industry

High Turnover IndustryHigh Turnover Industry

% left / fired after 6 months% left / fired after 6 months 46%46% % left / fired after 14 months 57%% left / fired after 14 months 57%

% left / fired after 6 months 25%% left / fired after 6 months 25% % left / fired after 14 months 34%% left / fired after 14 months 34%


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3. Maximize productivity and employee engagement through well developed training and coaching strategies and instruments.

Get the most out of what you’ve got!



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4. Insure against future retention challenges - use succession planning and job matching systems to plan individual career paths that take people beyond the ‘three year hump’.



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5. Use 360° multi-rater feedback systems to consistently monitor ‘the pulse’ of the employee / manager relationship.

Young workers DEMAND and DESERVE to be lead individually and professionally.



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6. Provide opportunities for open 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.



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7. Determine the behavioral and 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.



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What if I still do not have What if I still do not have enough people?enough people?


2727

4%

20%

25%

16%

1%

34%

50 or Under 51-60 61-65 66-75 75 or older Never

At what age do you plan to retire?

It’s not It’s not ALLALL bad news – bad news –Many Employees Plan Not to Retire…Many Employees Plan Not to Retire…



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Cutting Back Has New Meaning: Cutting Back Has New Meaning: Cyclic – or Project-Based – WorkCyclic – or Project-Based – Work

12%

39%

49%

Working full-time Working part-time Moving back and forthbetween working full-time and

not working

Preference for working after “retirement”



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What Matters to Mature WorkersWhat Matters to Mature 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%)



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Mature Workers –Mature Workers –The Good News on EngagementThe Good News on Engagement

3230

15

26

38

2118

35

16

9

15

8

0

5

10

15

20

25

30

35

40

Looking for a new job at anothercompany

Feeling at a dead end Fear of being laid off or fired



%


31

4539

32

4844

28

5752

35

65 6153

0

10

20

30

40

50

60

70

I really care aboutthe fate of thisorganization

(agree)

I’m willing to put ineffort beyond that normally expected

to help theorganization be

successful (agree)

I find my valuesand the

organization’s aresimilar (agree)




%


32Source: The New Employee/Employer Equation, The Concours Group and Age Wave, 2004


%


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1. ‘Retire Retirement’

– create bell-shaped career curves

Six Steps to Become More Attractive Six Steps to Become More Attractive to Experienced Mature Workers – Step to Experienced Mature Workers – Step 11


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The Shape of Careers to Come:The Shape of Careers to Come:“Down Shifting” for Continued “Down Shifting” for Continued ContributionContribution

20s

30s

40s

50s60s

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


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2. Use succession, redeployment, and job matching systems well in advance to take a wider view of potential assignments for returning or downshifting workers.



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3. Align the mature worker 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.



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4. Tap into the experience 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”



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5. Ensure managers are ‘age blind’ – reaching out to all age groups in the new blended workforce.



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6. Use all available resources 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.



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The question is not, The question is not,

““Is my organization facing an aging Is my organization facing an aging workforce crisis?”workforce crisis?”

The real question is, The real question is,

““Am I ready for it?”Am I ready for it?”


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Timothy Butler & James Waldroop“Job Sculpting” Harvard Business ReviewSeptember-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”


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For more informationFor more information

Contact:

David Dennard972-701-0222

workforce crisis (revised) 2008

Documents

massive crisis

impending work crisis

david ellwood

human history

future history

profound implicationsthere

young world