2005 In Review: 2 The Globalization of Recruiting
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Reveille and Hyperbole 2006: A Ticking Time Bomb? 3-2-1 Blastoff Let the celebration begin. Hayley Mills, Sally Fields and Patty Duke turn 60 this year. So do Presidents Bush and Clinton, Donald Trump and Cher. Joining them will be the front edge of millions of aging Boomers who are anticipated to retire or change careers in unprecedented numbers. This is the leading
edge of a series of events and workforce trends that author-workforce expert Ira S. Wolfe has called The Perfect Labor Storm.
Wolfe, founder and president of Success Performance Solutions, recalls six years ago when he first warned about skilled worker shortages. "I received many comments like "interesting” and "thought-provoking,” he recalls, "but many executives and business owners chose to ignore the warning.” Today, stories
about skilled worker shortages is front-page news and time to fill open critical positions is growing longer and longer. "The Perfect Labor Storm,” Wolfe contends, "is no longer just a forecast for the future but an imminent threat for the present.”
Wolfe offers highlights of a few stories he believes will dominate the news in 2006 and beyond.
A Shrinking Workforce
The number of U.S. workers between ages 55 and 64 will grow 51 percent to 25 million by 2012, meaning the fastest-growing portion of the work force is the one at most risk of retiring soon. At the same time, the number of workers between ages 35 and 44 is expected to shrink by 7 percent.
New Skills Required
While many workers continue to use skills learned in an Industrial age, consumer demands have changed. Jobs now require skills for service and knowledge, not manual labor. In 1955, 40.5 percent of the U.S. workforce was engaging in manufacturing, construction, and mining. By the end of 2005, those
industries employed only 15.8 percent of the workforce. Service-producing industry sent paychecks to 41.8 percent of workers.
Is Education The Answer?
Many point to better education as the solution. But education has its own problems. Today's workforce is the most educated in the world. That is all about to change. U.S. high school students are getting their lunches eaten when it comes to math and science scores compared to the most advanced economies
of Europe and Asia.
No Industry Left Behind
Nearly every industry is predicting severe employee shortages, including manufacturing. Despite over 2 million layoffs, 500,000 vacancies exist for manufacturing jobs. Why? The available worker, including the employed, doesn't have the right skills. The same forecast holds for healthcare, construction
and technology.
Ticking time bombs: health care and pensions
For the first time in history retirees are living longer after retirements then they worked for the company or paid into social security. Many organizations including the government are facing huge funding shortfalls. The rules about retirement haven't kept up with life expectancy. As a result, public
pension and health benefits for the elderly are on track to double while at the same time the old-age dependency ratio (nonworking older person per workers) will double.
Living Longer Costs Money The health care consumption level of a 70-year-old far exceeds the consumption level of a 30 year old. By one estimate, the average elderly American consumes 37 percent more than the average worker. As a result, Americans will be expected to pay more for their own health care and more for their
dependents through more out-of-pocket payments and increased tax bills required to fund public supported health care.
Consumer-Driven Health Care
Shifting responsibility for health care to the consumer may be the right thing to do but employers and the government are asking a lot when lay people are expected to shop for a provider, decide when to seek care, wait weeks or months to get an appointment, juggle the appointment time with the demands of
working, and navigate a complex system of bills and payments. At least 77 million people in the U.S. -- or two out of every five adults -- have a hard time paying for medical bills or have accrued debt as a result of health care expenses. Two-thirds of people, which includes many workers, with a medical
bill or debt trouble go without care because of cost. Meanwhile their health deteriorates. Minor ailments become severe and chronic conditions evolve into acute emergencies.
More than Pocket Change
Losing experienced workers is only part of the problem. Replacing them comes with a high cost. At a time when the cost of doing business is rising and profits are squeezed, the average "cost-to-hire" and "time-to-fill" in 2005 was $7,123 and 37 days, respectively. The number goes up exponentially when
recruiting and hiring knowledge workers. (Source: 2005 SHRM Human Capital Benchmarking Study)
Wolfe says, "this combination of an aging population and a shrinking workforce will increase the pressure to reduce pensions, delay retirement, increase outsourcing and open up immigration.”
Deck Chairs Time Plus Payroll Services announced that payroll industry veteran Neil Manna has joined the company as CFO.
You Should Know
Global:
Too often the staffing function is still missing in action Listening to my son's account of his on-the-ground weekend exercises the other day (he's a weekend warrior in the national guard and, having just read an email from one of my cousin's sons in the 101st (and now in Iraq after two
years in Afghanistan), I had this thought about Staffing leaders and the so-called war for talent- with appologies to the folks who are the real warriors.
If talent acquisition is to be the linchpin for how HR finds, develops and retains employees that drive their firm's performance, then Staffing is truly the lead element in the war for talent and, for most, it is unequipped to do its job, poorly trained to operate as a team and poorly organized for
the mission at hand. (CareerXRoads)
What Lies Ahead for the U.S. Economy in 2006 The economic growth that the United States enjoyed in 2005 will continue in 2006, as stronger business investment begins to pick up the slack on the part of consumers who will curtail the white-hot spending that has been a key factor in
propelling the economy, according to Wharton faculty members and private-sector economists. In addition, oil prices will remain high in 2006, but not much higher than they are now, the residential real estate boom will cool and American workers will be forced to deal with a volatile employment market,
these experts say. (Wharton)
Stock Images. Be sure to checkout team work, partnership and
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find imagery to match any of today¹s key management buzzwords. We believe it to be fully comprehensive and unique in its no nonsense portrayal of daily office life. (NWYH Stock Images)
Line Manager's Candidate Assessment Blindspot Great book The Tipping Point. One I would recommend. The author, Malcolm Gladwell, talks about a tendency we all have called the Fundamental Attribution Error (FAE). He did not do the research on this issue but his description is
excellent. The FAE is a blindspot we all have when we process information. What happens is that when we interpret other people's behaviour we overestimate the influence of the other person's character, and underestimate the influence of their situation and context. (Talent
In China)
Five Years Forward What will the next five years bring? The trend in the Fortune 500 to an entirely digital recruiting process is evident when one considers the number of companies for which the online channel is now the only way to express interest in a job position posted to the
careers website. The goal of digital recruiting is to transform the recruiting process into a paperless, consistent business process. (Talent In China)
Older Workers Seek Flexibility, Autonomy, Learning When it comes to integrating older employees into the workforce, the Cendant Car Rental Group has the right idea. As it begins to establish neighborhood rental centers--those not located at airports--the owner of the Avis and
Budget brands is looking for workers 50 years or older to run the businesses. "They're going to bring all of what makes a 50-plus worker valuable in terms of relationships, knowledge and maturity" that it takes to build a business, says Mark Servodidio, executive vice president of human resources at
Cendant. (Workforce)
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