turmoil and trends in america's workforce
DESCRIPTION
This was presented at San Francisco's Commonwealth Club on October 14th, 2008. Covers the significant trends and turmoil in America's workforce and discusses how the evolving flexible workforce is a viable solution in the war for talent.TRANSCRIPT
Turmoil and Trends in America’s Workforce
Alex Dodd, CEO M Squared Consulting
Agenda for today
• Current economic climate
• Talent supply and demand
• Flexible workforce
• Recommendations
Current Economic Climate
• Not likely to lose best talent• Belt tighten, but not so much that you
cannot take advantage of upturn• It’s tough, but use this opportunity to
address under performers• Do something different – embrace the
flexible workforce…
Talent supply & demand
• What’s happening on the demand side?– “the work that needs to be done”
• What’s happening on the supply side?– “the people that will do the work”
• Long-term relationship between supply and demand
3 Primary Drivers
Demographic trends… …impacting the workforce supply
Firmagraphic changes… …impacting the workplace environment and the nature of work itself
Psychographic evolution… …creating a “new” workforce
Demographic Trends
• Baby Boomers• Post-Boomer generations• Women in the workplace• “Non-traditional” households• College graduates• Immigration• Life expectancy• Birthrates• Cost of living
Baby Boomers
• Reaching retirement age…– Some retiring now– Some continuing to work, full-time– Some continuing to work, on their own
terms!
• Health benefits…• Financial ability to retire…
Post-Boomer Generations
• Generation X is not big enough to replace the Baby Boomers
• Generation Y is similar in size to the Boomers, but is not experienced (yet!)
• Gen X & Y are radically different in viewpoint than Boomers
Our Workforce
Source: 2005 U.S. Census
Boomers(1946-1964)
76.7m
49.1m
Generation X(1965-1980)
Generation Y(1981-2000)
73.5m
28.5m
Traditionalists(1925-1945)
Women in the Workforce
• A growing segment of the workforce• Make 83% of all consumer purchase
decisions• 60% of new college graduates• 60% of working age women work• Driving the creation of new career paths and
workplace flexibility
Traditional Households
Non-traditional households (i.e. the vast majority of households) want / require (demand!) flexibility
College Graduates
• College degree is a prerequisite in the knowledge economy
• Declining graduates with engineering and professional degrees
• Many foreign nationals are returning home
Immigration
• Highly politicized issue• H1B visa’s – 2008 lottery closed in first 24
hours.• No relief in sight…
Life Expectancy*
*Average, at birth, in the U.S. (Source: U.S. Social Security Administration)
Age
1900 1910 19301920 20001940 1950 1960 1970 1980 199040
80
60
50
70
45
55
65
75
Birth Rates
(Source: Age Wave)
Fertility Rate
US France CanadaUK Japan Germany Italy China India0
4
2
6
1
3
5
3.3
2.0
2.9
1.7
2.8
1.7
3.6
1.6
2.0
1.4
2.5
1.3
2.5
1.2
4.0
1.8
5.9
3.1
= 1960
= 2000
Cost of Living
• Most knowledge jobs are in or near major metro areas
• Housing• Commuting costs• Education
Workforce Projections…
Year
U.S
. Wor
kfor
ce
Projected Growth in Workforce (Supply)Projected Growth in Workforce (Demand)
Workforce Gap!
1980 1990 20102000 2020
Our Challenge:
Firmagraphic Drivers
• The knowledge economy• Economic conditions• Unemployment• Financial constraints of the firm• Change & Complexity• Outsourcing / Offshoring / Globalization• Employer loyalty
The Changing Nature of Work
• Knowledge economy is driving the need for specialized workers with specialized skills
• Work is becoming more team based• Work is becoming more project based• Technology intensive and enabled work can be
done from anywhere• New organizational structures, leadership and
management styles are emerging
The Changing Nature of Work
Psychographics: The Changing Workforce
4 Generations in 1 Workforce
TraditionalistsBorn: 1925 -1945
Respectful of authority
Hierarchical
Loyal to institutions
Rule makers and conformists
Baby BoomersBorn: 1946 -1964
Anti- authoritarian
Idealistic
Motivated by changing the world
Competitive
Generation XBorn: 1965 -1980
Self-reliant (latch- key kids)
Anti-institution
Rule-morphing
Tribal
Information-rich
Generation YBorn: 1981 - 2000
Confident and full of self-esteem
Impatient and eager to live life “now”. FUN!
Socially conscious
Highly tolerant
Plugged-in
Family-centric
Outcomes of the Changing Workforce
• Changing definition of retirement• Desire for greater work/life balance• More career flexibility/control• Looking for greater meaning in work• View work as a “series” of engagements• Diminished employee loyalty
So, the workforce has already radically changed, the nature of work is changing, now the workplace needs to catch up…
The Flexible Workforce
The Flexible Workforce is an innovative human capital strategy that:
• Recognizes the changes that are impacting “work”• Leverages the strengths of all 4 generations in the
workforce• Incorporates workplace flexibility, allowing people
to balance work/family/life• Provides greater flexibility and resiliency for the
organization
Developing a Model for Working with Flexible Resources
1. Define the work and desired results2. Define the skill/experience level required to
do the work3. Define the relationship between the worker
and the organization4. Select the resources to do the work5. Manage the work6. Capture and retain knowledge7. Measure results and satisfaction levels
Flexible Workforce Advantages
• Expertise: Brings in targeted expertise• Execution: Enables leadership to focus on
execution, accelerates time to market• Cost Control: Buy the expertise you need, as
you need it, where you need it. • Flexibility: Manage business peaks and valleys• Perspective: Objective outside experience• Recruiting: Broadens reach, “try before you
buy”• Retention: Demonstrates commitment to core
FTEs
The Time to Act is Now
Recommendations
• There is still talent. It has just changed, and the supply has gotten tighter.
• Many professionals no longer want a 9-5 job for life. Their definition of a “career” has evolved to being a “Free Agent”.
• You must now play on their terms to get their help.
There is no magic wand…
…and…
• Traditional FTE employment• Greater use of flexible workforce
• Technology• Productivity improvements• Outsourcing/offshoring• Enlightened employment policies• Management practices
Embrace the flexible workforce and make it a foundation of your
Human Capital strategy
• It demonstrates your commitment to innovation, supporting your staff, and getting work done
• It shows you care about success!• It enables you to get the best available
talent
Issues and Recommendations
www.msquared.com/blog
Alex DoddChief Executive [email protected]
415-391-1038