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GeoLabour

(April 07, 2005) - We've been detailing the prospects and impacts of the labor shortage for a decade. Declining birth rates result in a dramatic shift towards an elderly society. Population is in absolute decline in all of the Top 50 industrial countries. National growth in the US Population depends on a very loose immigration policy.

The idea is so counterintuitive that it's been an uphill battle. The idea that overall growth is contingent on demographic growth is lost on most marketing folks. It sails over the heads of the HR team. So much of our view of economics and social reality depend on a never-ending surplus of young people that the opposite is difficult to consider.

The ratio of old people to young people is changing dramatically.

In the last decades, most age groups were increasing. They were increasing rather faster or rather slower than the average population, but this was not a main concern. While the post-war baby boomers are to massively retire in the coming decade, the landscape will display far-reaching changes. This will affect not only the Labour supply but also the demand side.

As to the Labour supply, the past behaviours, built all along two centuries of abundant labour supply, are beginning to change. While the inflow of young people to the labour market is either growing at a slow pace or declining as in the majority of developed countries - the young workers are no more seeking for job stability: the freeters are those ready to zap in any fit of temper to another employer, pose new problems to HR managers. When the baby boomers reach the last stage of their working life, the replacement of the workforce will require inventiveness, and rejuvenation will be uneasy. The shift from a buyer's market to a seller's market will be progressive but it is well under way in many places and employee retention has begun to be a concern for an increasing number of companies.

There is hardly any doubt that outsourcing and off-shoring could not give much more than limited leeway(1), as the conditions for offshoring are limiting possibilities the availability of a skilled workforce acts in potential off-shores matters "as locational determinants nearly as frequently as low costs"(page 12). As a matter of fact, outsourcing and off-shoring are also consequences of the embarrassment of enterprises in building internal competences and achieving top quality where the question is effectively that of skill shortages.

Nevertheless, changing demographics are only one factor in the development of labour shortages. They are entwined with the changing patterns of competence building in the frame of the ICTs and in that of the emerging knowledge-based society (KBS). Indeed, the KBS is opening up the range of required qualifications. While the previous technological paradigm i.e. that of the industrial golden age based on taylorist/fordist segmentation of tasks, pre-determined work prescriptions and monitoring of individual performance in the service of the machine system - was assigning workers to rather closed professional paths, the new paradigm owes more to teamwork, to responsible autonomy and to a shifting combination of tacit and social skills, learning and problem-solving capacity. The traditional "profession", that was most often certified by a standardised scholar title, more and more becomes a talent built on experience whereby the recruiter is increasingly in need of both skill assessment and job assessment. While qualifications become peculiar sets of skills, the labour market mediators tend to cluster that variety along some common sets of core knowledge which feeds the development, in the recruitment business, of niche markets.

So, besides demographics, the new technological paradigm is by itself feeding a structural shortage of talents. But demographics will add , year after year, more turmoil in these uneasy adjustment of demand and supply. The moment of truth will arrive soon, when the baby boomers begin to retire in mass.

from GeoLabour Archives

 

John Sumser

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