Human Resource Management in the 21st Century
Fact or Fiction?
Demographic Changes and Talent Management
2007 Oct 1 Posted by Jean
The workforce in the United States is dramatically changing. Through most of the twentieth century, organizations could count on a steady stream of potential workers with the basic skills and career expectations that met the needs of corporate leadership. Today that is no longer the case. The technology, culture, demographics, and new sourcing methods are making the C-level senior executives re-think their strategy for this new century. Organizations that hope to achieve and maintain high performance must take a wide-ranging approach to understand this change, diagnose the impact and put in place an integrated suite of solutions that manage the potential risk (Smith, 2007).
The challenging workforce is, in part, a product of demographics. The steady flow of workers has been broken. The statistics are frightening: Every ten minutes a “baby boomer” is retiring, more then 75 million of them by 2011 (Smith, 2007). Retirements will now outweigh the inflow of knowledge workers. With the average age of the working population increasing, with a higher percentage of the workforce retiring and the declining birth rates in many nations, including our own, the current state of the workplace is uncertain at best. Most organizations are now at risk of having their valuable knowledge and skills sail off into the “retirement sunset” with little or no strategic plan, process or goals in place to “restock the lake.”
The majority of the industrial marketplace in the United States of America has now become one of knowledge workers (Butler, 1997). Knowledge workers are employees who are valuable for what they do with their ideas rather than what they do with their bodies. In 1900, only 17 percent of all jobs required knowledge workers. Now, over 60 percent demand the skills and competencies of an educated workforce. The business outlook for the supply of this talent for the immediate future is not good. The Bureau of Labor Statistics predicts that by 2008, 25 percent of senior leadership positions will be vacant, mostly due to the retirement of “baby boomers” (EXECSIGHT, 2004). A study by Bersin and Associates concludes that the U.S. 500 largest companies will lose 50 percent of their senior management by 2011 (Bersin, 2006). Given this fact, the problem is replacing these “baby boomer” leaders of knowledge workers in the coming decades. (R.John Welsch, Jr 2007)
What are your companies doing to actively manage their talent? If your company is not actively engaged in these activities what do you think they should do?
4 Responses to “Demographic Changes and Talent Management”
JoDee Salisbury Says:
One cannot argue with the labor statistics and while they show that the workforce will be significantly altered as the baby boomers retire, there is tremendous opportunity for companies to evaluate those senior level executive positions. There are many companies that during the good times promoted and kept the upper executive levels of the organization “fat” in an attempt to flatten the organization–take a look at the “Big 3″. What some companies did, instead of flatten, is actually create an hourglass effect with heavy concentrations of workers at the bottom and top. Succession planning has become difficult in these companies because they are faced with tremendous learning curves. With mentoring, consulting, and restructuring companies have options and now is the time to begin true succession planning and “flattening strategies” that compliment one another instead of acting in homogeneous bubbles.
Michelle Eichorn Says:
I am more concerned with the loss of traditional workers than the loss of management. Skilled trades are now populated by people who will be retiring in the next few years. Our educational system has spent decades driving people to college when apprenticeship programs may have been a better fit. We can’t outsource A/C repair, electrical work, plumbing, etc. to a developing economy. Yet the pipeline isn’t filled to replace those getting ready to retire. The health professions, from entry level nurse aides, to surgical techs, to physical therapists are in woefully short supply at a time when the population is aging and will need those skills more than ever before.
We need to re-think how we direct youth into career paths and open the doors wider for those wanting to make mid-life carerr changes.
Fernando Gastón Says:
I don’t see much concern on this issue in the previous answers. And I think it should be a really worrying issue. I’m a baby boomer (in spain baby boom came 20 years later than in US)and in about 20-30 years time we’ll have the same problem coming. I think that solution to such a problem should be provided by government and not private companies. In spain current inmigration policy is bringing low-qualified people (obviusly is not inmigrating the best from other countries). The question is: will this inmigration, even with training and access to opportunities, be able to take over the people that will be pushing ahead the country in the future? Will it be the same? or we should refrain inmigration a let the baby boomer retire when they are 70, instead of 55?
What can a private company do? Just fight for the best, the company able to retain best qualified people will success. Older retired people, still able to add value and with a need to be useful, could collaborate as freelancers, increasing their sense of usefulness and helping to coming generations to reach higher performance levels. The same role that frandparents have related to their grandsons.
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Isaac Dixon Says:
In our organization we have taken a very proactive approach to managing changes in our workforce. We have begun to ask ourselves questions about what is work, what does it mean and where/when can it be performed? This discussion leads to creative solutions that can keep people working longer rather than accepting the notion that they are all headed for the exits.
We have done several surveys of our employees and found that many who should be thinking of retirement are simply not doing this. Several responded, “Retire to what?” When asked further about their life plans a significant number indicated they would continue to work to: a) Provide health insurance to themselves and their spouse/significant other and b)continue long standing work based relationships with people they like and respect.
In dealing with newer workers entering the workforce, we are investing significant time in “school to work/workforce readiness” efforts K-12. Our programs encompass everything from Career Highlights Programs to working to influence legislation aimed at higher education and high school funding.
In summary, our organization realizes that theere is no one size fits all approach and that each employer must reshape their concepts around work and who performs it in order to meet the challenges of the future.
November 27th, 2007 at 9:22 pm