Inside Human Resources Blog

How Aging Parents Will Impact Baby Boomers

Between 1958 to 1963 you knew The Naked City television show was starting when you heard, “There are eight million stories in the naked city. This has been one of them."

Today, I receive dozens of alerts and news stories about how technology and demographic trends are changing our lives.  Individually these stories demonstrate how small groups of people around the world are being impacted by change and innovation as well as a shift in power going from the traditional economies - United States and Europe –driving global growth to developing nations.  We now have six billion stories in this naked world of others…..and this is just one of them.

The list of stories about worker shortages just keeps getting longer and longer.  But work shortages aren’t the only thing causing the Perfect Labor Storm.  The Perfect Labor Storm is the story about how changes in nearly every aspect of our lives today will affect how you do business tomorrow.

One of the most poignant stories came across my screen this morning.  This story is very real and for many of us baby boomers it is top-of-mind.  So top-of-mind that is distracts many of us from the demands and focus required to do our jobs.

What follows is just one Perfect Labor Storm story:  “For every 1,000 people age 65 and older who "retire" to Florida there are about 481 that leave. My father and my stepmother will soon be among those 481 -- provided my siblings and I can come up with a plan.”  Read more about how just one segment of how an aging population will change the way people work.

First Boomer Starts Tidal Wave on Social Security

"If this were a movie, this is when the scary music would start," David John, an economist from the Heritage Foundation, said.

Kathleen Casey-Kirschling was born New Year's Day 1946, at one second past midnight, making her the first baby of a new generation.  Today, she reached another milestone -- she became the first baby boomer to sign up to receive Social Security payments.

Raised on "Howdy Doody" and hula hoops, she danced on "American Bandstand." Her first husband served in Vietnam. And in later years, she prospered like many of her classmates -- the baby boomers.

Trouble is, 80 million others are right behind her. Casey-Kirschling is the raindrop that's about to become a tidal wave.......a tidal wave called The Perfect Labor Storm.

Increase in workers seeking new jobs

The pressure on companies to retain their best employees is only going to increase. That's one of the major findings of a new workplace study titled "The World at Work 2007" by the Atlanta-based staffing firm Randstad USA and polling firm Harris Interactive.

One of the study's conclusions was that employees in 2007 are less likely to feel trapped in jobs they hate and also more likely to feel it's a good time to leave their current job. In 2007, 54 percent of the survey's respondents said they're looking for a new job that pays more, up from 34 percent in 2003.

In the face of large numbers of looming retirements by baby boomers, the study's authors point to the importance of transforming a company's high turnover culture into a high-retention culture.

"In the simplest terms, most people don't leave a company or a job, they leave their managers or supervisors," the report says. "That doesn't mean management becomes a popularity contest. It means that managing for employee retention becomes just as important as productivity and profitability."

According to the study, the following workplace factors will contribute to keeping employees from leaving your company:

• Compensation that's aligned to current market values
• Revised benefits that are more realistic in meeting family needs in 2007
• More flexibility and choice in work schedules, full versus part-time employment and the length of the workweek
• Training and personal development
• Career opportunities inside the organization that equal opportunities offered by other companies

Read the full World at Work 2007 report.

Companies Can Improve Earnings Nearly 15% By Improving Talent Management Function

By excelling in talent management, the average Fortune 500 company can generate a nearly 15% improvement in Earnings Before Interest, Depreciation, and Amortization (EBITDA) according to new Book of Numbers™ research from The Hackett Group, a strategic advisory firm.

Hackett's research demonstrates the bottom line impact of more effectively managing human assets, and provides strong evidence to executives, investors, and HR leadership of the value of developing intangible assets such as a company's workforce.

The best companies treat employees the same way they treat their business lines, as something to be carefully analyzed and strategically developed in support of their business goals. They determine the skills, competencies, and experiences needed to run their company over the next few years, quantify the gap between their needs and their current resources, then acquire the expertise they need through a combination of staff development and hiring. As a result, they are more competitive in the marketplace, and this is reflected in improved earnings.

Hackett's analysis, which is being issued as part of its "Talent Management: Buzzword or Holy Grail?" research, was based on the results from more than 125 comprehensive Human Resources benchmarks performed by the firm over the past three years. Metrics were chosen to reflect a balance between talent management efficiency and effectiveness.

Hackett's research found a strong correlation between improved financial performance and top-quartile performance in four key talent management areas: strategic workforce planning, which involves identifying the skills critical to a company's operation and how those needs match up against those of the existing workforce; staffing services, including recruitment, staffing, and exit management; workforce development services such as training and career planning; and overall organizational effectiveness, including labor and employee relations, performance management, and organizational design and measurement.

Companies with top-quartile talent management outperformed typical companies across four standard financial metrics. They generated EBITDA of 16.2%, versus 14.1% for typical companies. On average, top talent management performers also generated a 22% improvement in net profit margin, a 49% improvement in return on assets, and a 27% improvement in return on equity.

Source: The Hackett Group

No Shortage of Worker Shortages

More Perfect Labor Storm Sightings from around the world

Iowa’s looming skilled worker shortage threatens the state’s economy, business representatives and state department leaders told lawmakers Monday.  Read more.

"We have people coming here with a high school or two-year college degree who don't have critical skills," Vance Hays (Standard Industrial) said.  Marvin Carraway, the retired general manager of Clarksdale (MS) Public Utilities, echoed Hays' sentiments. "The young people can't read a blueprint or know how to use basic tools."  Read more.

According to the AMA, in many communities around the United States, there is a physician shortage, which presents a serious health care problem. For a host of reasons, more than twenty million people are affected by the inability to access quality medical services.

Read more.

Across Metro Detroit, health systems have turned the spotlight on retaining and attracting nurses, an effort begun amid huge vacancies several years ago and projections that the nursing crunch will only worsen as aging Americans seek more medical care and older nurses retire. In Michigan the shortfall of nurses is expected to reach 18,000 by 2015.

Read more.

Wyoming's booming economy is making it harder for employers in Cheyenne to find workers…… job growth in Wyoming will continue to exceed the state's population growth.  Read more.

Auckland City patients are at a higher level of risk of medication errors than usual because of an unprecedented shortage of pharmacists.  The scarcity of pharmacists is the latest in an unending series of health-worker shortages to afflict parts of Auckland or the whole country, some of the worst being among junior doctors, pathologists and anaesthetic technicians.  Read more.

What's Keeping CEOs Awake at Night?

Execution is taking precedence over profit and top-line growth as a focus for CEOs around the world, according to a survey of 789 global CEOs from 40 countries from The Conference Board report, CEO Challenge 2007: Top 10 Challenges.

When asked to rate their greatest concerns from 121 different challenges, this year’s CEOs chose excellence of execution as the number one challenge they face, knocking sustained and steady top-line growth down a notch.  Consistent execution of strategy by top management followed in third place.

Creeping up the list for these executives are a few people issues.  Cracking the U.S. Top 10 this year is finding qualified managerial talent and top management succession. These replace healthcare costs as the top HR concerns, which didn’t even make this year’s top 10. CEOs in Asia find the challenge of finding qualified managers particularly acute, voting it their number one concern. In Europe, CEOs ranked it the same as their counterpart in the U.S., number six.

United States Top 10 Challenges

1. Sustained and steady top-line growth

2. Excellence in execution

3. Consistent execution of strategy by top management

4. Profit growth

5. Customer loyalty/retention

6. Finding qualified managerial talent

7. Top management succession

8. Corporate reputation

9. Stimulating innovation/creativity/enabling entrepreneurship

10. Speed, flexibility, adaptability to change

Source: CEO Challenge 2007: Top 10 Challenges, The Conference Board

Oil lube and automotive service industry fight for technicians

There is another industry at ground zero for skilled worker shortages. A huge shortage is hitting oil lube centers.  The shortage is increasing franchise costs in labor, availability of labor and quality of workmanship.

For instance 80,000 Americans are employed in the Oil Lube industry. Car dealership franchises employee 265,000 Americans.  Automotive repair and service franchises need technicians to perform warranty work and do routine services.  The entire automotive aftermarket service sector is fighting for a shrinking pool of skilled laborers. The demand for mobile unit automobile repair teams, which require two technicians per unit on the road for personal cars and up to 4 technicians for fleet on-site oil changing, is increasing but the pool of workers is shrinking.

Car dealerships are expanding into the auto lube business too and feeling the pinch.  Employers are working hard to keep enough mechanics on staff while training them on the latest models and all the OEM idiosyncrasies.  To do this car dealers alone soak up 35,000 new technicians per year and that is just to stay even with the attrition rates and expansion of the largest Car Dealership Consolidators - United Auto, Auto One, Lithia, CarMax, AutoNation, Sonics Automotive Group. That's really bad news for the small businesses and franchises in the oil lube and automotive repair industry.