(Excerpted from our 2010 Corporate Recruiting Report.)
For some companies, the recession may have provided a respite from the issue of worker shortages, but those shortages remain real and persistent as we look to the future. Demographics are immovable obstacles. As shown on page 15, we know the composition of the U.S. workforce for the next several decades and it suggests a prolonged and challenging period of increasing competition for diminished human capital resources.
In the U.S. we will be dealing mainly with: a) the shortage of replacement workers for retiring baby boomers; b) a shortage of experienced, mid- and upper-level managers; c) the mismatch between worker skills and work requirements; and d) restrictive immigration policies. We are extremely fortunate in continuing to be a highly developed country that is also a growing labor market, with projected population growth over the next 40 years from roughly 300 million today to roughly 400 million by 2050. Europe and Japan face similar problems, but tied to falling birthrates and declining populations. The developing countries have a reverse problem, no place to absorb the labor surpluses among younger workers.
2010 Corporate Recruiting Report
The consequences of insufficient labor supply have been visible for some time.
In 2006, the Corporate Executive Board reported that three-quarters of senior HR executives stated that “attracting and retaining talent” was their first priority. (“The Battle for Brainpower,” The Economist, Oct 5, 2006)
In 2007, SuccessFactors reported that over half the firms surveyed listed talent acquisition as a key challenge (“Performance and Talent Management Survey 2007,” SuccessFactors, 2007).
Our own more recent surveys provide additional detail. One quarter of all companies are confronting worker shortages, and only one-third consider the supply adequate. The problem exists across a wide range of business sectors.
2010 Corporate Recruiting Report
A Controllable Problem
We believe that the astute firm willing to study the data and trends and modify their recruiting programs accordingly will not merely contain the problem of worker shortages, but solve them. In other words, the problem can be relative rather than absolute. But this requires rethinking traditional recruiting practices.
The Internet has been a great gift to the traditional recruiting model because it increased so enormously the visibility of help wanted postings, effectively affording the worldwide workforce access to any available job. But that model remains essentially passive and merely extends the viewership of the old newspaper classifieds. And it relies mainly on attracting traditional kinds of applicants to traditional kinds of jobs in traditional types of locations.
The next evolution involves altering the model itself by rethinking who does the work, how it gets done and where it takes place.
Success will come not only by matching people to work but by matching work to people.
Rethinking this connection starts with viewing the workforce as a dynamic, evolving, worldwide phenomenon instead of a fixed, static, local one. This begins with understanding how mobile and international the workforce has already become.
People move for many reasons, which tend to vary by skill level. Professionals and skilled technicians move for adventure, advancement, language, skill development, cultural skills, and often for security and quality of life. Lower skilled workers tend to seek areas of economic growth, plentiful jobs and ready income.
Across the 27 countries surveyed by Manpower, the top 10 job categories that employers fill with foreign talent are:
- Laborers
- Engineers
- Production Operators
- Technicians
- IT staff
- Sales Reps
- Administrative Assistants/Pas
- Customer Service Reps
- Senior Executives/Board Members
- Accounting & Finance staff
Mobility has been increasing for decades, driven by steady decreases in the cost of transportation and by advances in communication. Where work is to be had, word now quickly circulates around the globe and workers respond.
Think of this mobility as offering a variety of recruiting opportunities, not just cross-border and not just workers moving to where the work is. Think of it also in terms of placing work where workers will find it most attractive. A good example is the relatively sparse but important (in the U.S.) 25-34 demographic.
As it turns out, this group gravitates to urban living. The U.S. Census Bureau data from 2000 shows they seek in-town living at nearly triple the rate of the general population. In Chicago, for example, that age person is 1.79 times more likely to live downtown than the general population.
Couple this with data from marketing consultancy Yankelovich, whose survey found that 65% of respondents in this demographic preferred to: a) find a place they wanted to live; then b) look for a job there, rather than pick the job first, then settle for whatever location that entailed. The recruiting implications are obvious. Put your work in a downtown urban area if you want a head start in attracting this critical age group.
A Supply/Demand Orientation
We have previously described the job market as being fundamentally a supply/demand equation like any other market. While this is an easy statement to accept at face value, it does not reflect very much actual recruiting practice. Corporate recruiting still remains largely demand- focused: “1) have jobs; 2) find workers to fill them.”
The new model reflects a more balanced focus on both demand and supply. Demand is the jobs that need to be filled; supply is the potential supply of recruits wherever they may be found with the best balance of quantity and quality. It is a proactive focus that requires investigation and analysis, together with tailored invitations to targeted audiences. It is the supply chain approach.
In the context of worldwide imbalances of work and workers, this proactive, analytical strategy is especially important. Without it, one must compete for scarce workers in the same way, and on the same playing field, as every other competitor, probably with more or less the same results. Because everyone is working the same way in a depleted labor market, shortages are inevitable and chronic.
Staffing now needs to do the same thing. In the labor markets of today and tomorrow, competitive advantage in recruiting will increasingly come not only from better skills, more refined processes and newer technology, but also from demonstrating a superior understanding of labor markets.
Excerpted from the 2010 Corporate Recruiting Report, to be published the week of June 7, 2010. (Pre-publication special - $100 off - ends this week!)
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