Demographic shifts

The recession may have overshadowed the war for talent, but the battle is still on.

While it may not be apparent at this moment of high worldwide unemployment, the next decade will continue to be distinguished by a pitched battle for good people. In spite of dire warnings by economists for several years, only 1% of North American organizations report they are prepared for this challenge. So just at a time when highly skilled workers will be needed the most, the talent pool will be at its lowest — placing organizations at risk for reduced innovation, reduced productivity, reduced market share and reduced growth.

Case in point: right now in the United States, despite 14.9 million unemployed workers, there are still approximately 2.5 million jobs for which employers are actively recruiting, but have been unable to fill. This skills gap — the gap between job-seeking workers and jobs that go unfilled — is only going to widen over the next decade, despite a re-energized economy.

For the last decade business leaders have been warned about the imminent departure of the Baby Boomers (those born between 1947 and 1964) from the workforce. But this issue seemed to disappear during the economic meltdown as Boomer retirement investments tanked and many shelved plans for early retirement. Now, as the economy picks up speed, so will the rate of retirements.

This enormous generation peaked in 1959, so the real crisis will be felt over the next 10 years when literally millions of highly skilled, highly experienced workers — many of them in senior, and/or critical positions — leave the North American workforce. The Conference Board of Canada predicts a shortage of one million skilled workers by 2020.

Over the next decade in the US, the rate of Boomer retirements will be one every eight seconds! (American Association of Retired Persons, AARP)

And, as we know, those workers in their late 30s and 40s — Generation X — who should be stepping into the vacancies left by departing Boomers, are a small demographic. Right behind Gen Xers are the children of the Boomers — Generation Y. While this is an enormous demographic, they are just beginning their careers and it will be years before they have accumulated the necessary experience and wisdom or risen through the ranks of the corporate world. It’s simple math. There are just not enough qualified people available to fill senior and/or experienced shoes.

But Boomers aren’t the only ones leaving. Now that the recession is over, younger employees will also be looking to greener pastures. According to a July 2009 Deloitte survey, about one in five surveyed Generation X employees (22%) have been actively job hunting over the last year and only 37% plan to remain with their current employers. Members of Generation Y also have their sights set on better opportunities, with less than half of those surveyed (44%) reporting they plan to stick with their jobs.

During times of downsizings, cutbacks and closures, highly skilled workers with good jobs tolerated 24/7 workweeks and work overload. But according to Deloitte’s 2010 global survey with more than 22,000 recession-weary workers, there is a new deal afoot now that the implied “work hard and we’ll take care of you” contract has been dissolved. Those same workers who’ve been feeling overworked and undercompensated will walk — usually to a competitor.

What organizations can do to retain top performers

To prevent the bleeding of top performers, Deloitte’s Global Workforce study recommends that employers seize the opportunity to forge a new deal that responds to the employee value proposition that workers say connects most with them postrecession—favourable pay, flexibility in work arrangements, and support.

The talent market has changed significantly since the end of the last recession in 2001-2002 and now demands new approaches and focus. Has the great recession changed the talent game? Deloitte. April 2010

To attract and retain the best and the brightest, organizations should:

Assess their cultures and contribute to their strength — by asking employees what matters to them.

Develop corporate strategies that are congruent with a strong and clear vision.

Demonstrate to employees how their work connects into the big picture.

Offer outstanding compensation and benefits, flexible working arrangements.

Train managers to be excellent people managers.

Take from: WORKFORCE RISKS, Part ONE of a three-part series. Sponsored by: Ceridian Canada, 2010. Pg 4-6