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***********Human Resources Q & A
April 9, 2007
By Tim Rutledge
The question:
Last month’s federal budget contained a provision aimed at making it easier for older workers to remain in the workforce. Does this have anything to do with the so-called “shorthanded” economy?Tim's Response:
It most certainly does. The government’s initiative is designed to make it possible for someone to remain in an employment relationship while still contributing to a pension plan. The government’s own task force on workforce demographics was, I think, a factor. Labour Minister Solberg is on record as saying that all the employees in the federal public service who are becoming eligible to retire in the next few years simply can’t be allowed to. There aren’t enough people coming up to replace them.
We are beginning to realize that we’re in a situation not unlike that of the frog in the boiling water. If organizations don’t start doing something about what I’ve been calling the seller’s job market (more job vacancies than job seekers), they will suddenly find themselves unable to carry out business plans because they can’t find enough people, or the right people, to deliver them.
The Economist, the respected British news magazine, ran a cover story in its October 7-13, 2006 issue called “The Search for Talent: and Why It’s Getting Harder To Find”. It followed up in The World in 2007 with this assertion:
“In 2007 not even the most hard-of-hearing bosses will be able to ignore the war for talent. The war will rise to the top of the corporate agenda everywhere.”
The Globe & Mail in August reported as follows:
“For business, success in the shorthanded economy will mean finding and keeping employees [and] will be the single most important management task.”
Still with the Globe & Mail:
"Jim McNevin, former dean of Dalhousie University’s Faculty of Management, spent much of his 30-year career in economic development pondering how to find jobs for people. Now in his semi-retirement, he has struggled to come to grips with economics turned on its head: finding people for jobs. ‘The way we’ve thought about our economy for the last generation-and-a-half is no longer relevant’, he says." (August 21, 2006)
And:
“Experts say making the labour crunch work for Canada will mean a radical overhaul in basic assumptions.”
What assumptions? There are quite a few workplace practices and habits of mind that have been in place for long enough for people to believe that they’re normal and permanent. They are neither. They owe their existence to, and are propped up by, the buyer’s market in jobs that began when baby boomers first entered the workforce.
Since the time when boomers first spilled into the job market, around 1965, North America has experienced a long buyer’s market in jobs (more job seekers than jobs). This means that no one still active in organizational life today can remember anything different. Almost everybody has spent their entire careers in this buyer’s market, and there’s no organizational memory of anything else.
The job market hasn’t stopped being a market; it just hasn’t behaved like one for the past forty years. To be sure, there have been sector-specific seller’s markets during this time. In the 1970s, computer programmers were in short supply. Not very many people were versed in the mainframe languages like FORTRAN and COBOL. They were in high demand and short supply, and they commanded big salaries. The same thing was true in the 1990s for software engineers. But these situations were specific to certain kinds of jobs; the broad job market remained a buyer’s market.
So we know that a seller’s job market is upon us.
“In this economy, we need more skilled workers and knowledge workers, and they’re getting harder to find.” -- Edward E. Yardeni, Chief Investment Strategist, Oak Associates, quoted in the New York Times, July 30, 2006.Boomers haven’t replaced themselves, and immigration alone won’t close the gap. The seller’s market isn’t off in some vague future. It’s here now; the future will only intensify it.
So what are organizations, armed with this certainty, doing to be ready for it? With a few exceptions, not very much.
"The majority of Canadian employers make little or no effort to retain older workers, the Conference Board of Canada reported, and few are actively recruiting them. 'Canadian organizations are aware that, by 2015, there will not be enough qualified people to go around. For the most part, they are doing little to tackle the problem.'" -- Globe & Mail, August 5, 2006According to the Merrill Lynch New Retirement Study, 25% of employers said they were ready for the mass boomer retirements. The same study reported that 31% of employers hadn’t given the matter much thought. Put another way, well over two-thirds of employers are taking no action of any kind, while fully three-quarters admit that they’re unprepared.
Yet there’s no denying the talent shortage juggernaut:
“...the talent crunch is on big time. It is becoming harder and harder to find any candidates, let alone qualified ones. A study by the Washington D.C.-based National Federation of Independent Business found that nearly half (46%) of companies it surveyed said they found few or no qualified applicants for job openings in May.” -- Joseph Kornik, Editor, Training Magazine, July 2006.Alarm bells are ringing, but last month’s budget suggests they’re finally starting to be heard.
In future columns I’ll return to those assumptions and habits of mind that no longer work in a seller’s job market.
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