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It is better
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John Sumser

is more
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The Electronic Recruiting News is a Free Daily Newsletter For Recruiters, HR Managers, Advertising Agencies and Clasified Advertising Operations

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(September 05, 2003) - Peter Cappelli is one smart guy. Currently the head of the Center For Human Resources at Wharton, Cappelli is consistently a source of very straight and disciplined thinking on the subjects we follow. Of real interest is a recent study (see: What Labor Shortage? Debunking a Popular Myth).

The beauty of this particular piece of work can be quickly understood through Cappelli's closing remarks.

 "The wrong implication to take away from the study would be to say there's no reason to worry about anything concerning employment because there's not going to be a labor shortage. A tight labor market can come back in matter of months if the economy picks up steam. The real issue then will be to have a system of practices in place of finding good people, hiring them when you need them and keeping the good ones."

The study, titled "Will There Really Be a Labor Shortage?", published in the August issue of Organizational Dynamics, involves one of those delicious academic "sleight of hands". Will there be a demographic driven labor shortage, it asks rhetorically. No, because the economy might not grow, baby boomers might not retire at 65, there are plenty of workers just beyond the baby bust, more people are graduating from high school and college on a percentage basis and, the workforce will grow by 0.4% between 2000 and 2010.

Basically, Capelli's case is that there will be an adequate supply of workers. They just won't be the type, age or quality that you are looking for. In our words, he's saying, "There won't really be a labor shortage, it will just feel like it to you." According to Cappelli, "Employers could be forgiven for thinking that this situation looked like a labor shortage: Despite flat-out hiring, they could not bring in enough workers to meet their needs."

By positioning the paper as a myth debunking exercise, Cappelli simultaneously guarantees himself market attention and ensures that most people will miss the underlying and important message.

Over the coming years, it's going to be increasingly difficult to find the kinds of workers you want when you want them. Treating the problem as if it were a labor shortage leads to a set of bad decisions. It's more important to try to preplan your workforce needs and do things that will guarantee your supply. So what if it's a labor shortage? The solution to the coming problem has little or nothing to do with its multiple causes. The solution involves better planning, better retention of explicit categories of workers and more professional HR execution.

John Sumser


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