Perfect Labor Storm 2.0

Companies struggle to replace good, retiring managers

Published in Central Penn Business Journal, October 8, 2004
By Dennis Reardon, staff writer

Several businesses in Central Pennsylvania are wrestling with supervisory training issues. Company leaders retire. Staffs expand. As a result, companies need new supervisors and lessons on how to manage more people.

Electron Energy Corporation started in 1970 with two employees in a milk house on a dairy farm near Manheim, Lancaster County. Today, the business employs 107 people in a 40,000-square-foot building in nearby East Hempfield Township.

As the company's workforce has grown, so, too, has its numbers of supervisors and their responsibilities, said Ira Wolfe, founder of Success Performance Solutions. His business-consulting firm is training Electron Energy's upper-level managers and directors, supervisors and team leaders.

Many such leaders have been with Electron Energy, a manufacturer of rare-earth magnets, for 20-plus years, and they've never been trained for supervisory positions, Wolfe said. Electron Energy has struggled with turnover, a delvery rate that slipped and low morale, he said. Wolfe's business is based in Upper Leacock Township, Lancaster County.

"At least half of the supervisors are introverts, and they're now responsible for inspiring a team that has grown quickly," Wolfe said. "If even one person doesn't show up for work, you need skills to motivate. You just can't say, 'OK everyone, we have to work harder to get his job done.' "

Success Performance Solutions has provided good training that has boosted the morale of roughly two-dozen of Electron Energy's top staff, said Christine Wheelen, human resources manager at Electron Energy. The company's challenge has been recruiting and retaining workers.

"We'd like to develop team leaders into supervisors and to keep upper-level managers razor sharp," Wheelen said.

Success Performance Solutions also is providing supervisory training for C-P Flexible Packaging Inc. In Manchester Township, York County. The company makes flexible packaging for everything from snack foods to trading cards.

C-P expects in a few years to have supervisory job openings because of retirements and company growth. Success Performance Solutions is evaluating C-P's work force so the company can promote from within.

"We have one supervisor retiring now and several others who may retire in the next 5 to 10 years and, until now, we've had no succession plan for the supervisory position," said Chad Brenneman, human resources manager for C-P. "In the past, we've had assistant supervisors, be we don't have any now. We want to create those positions to ease people into supervisor positions."

C-P has run a battery of three different assessments on nine hourly employees who are looking to become supervisors, Brenneman said. Those workers were asked about their skills, behaviors, and motivators, among other areas. Those assessments will count for up to one-third of C-P's decisions about each potential supervisor. The rest will be based on workers' experience, interviews, performance and attendance.

A lot of companies are struggling to fill supervisory positions, said Scott Sheely, executive director of the Lancaster County Workforce Investment Board. His organization aims to atract and retain workers, improve their skills and increase their earnings.

"Companies are getting to the point where senior-level people retire, and then who's in the pipeline?" Sheely asked. "Companies don't want to take senior-level technicians and make them supervisors because they don't want to lose their experience. Yet, a lot of times, longtime workers are made supervisors - but they don't have the skills for managment,."

Much of the supervisory problem has been cause by the increasing popularity of lean manufacturing, Sheely said. Lean manufacturing eliminates waste by cutting excess inventory, improving work methods and reducing the amount of time it takes to process orders and collect payments.

A side effect of lean manufacturing is a smaller labor pool, Sheely said.

Small businesses are struggling to decide whether to partner with like-sized companies to split supervisory training costs, Sheely said.

U.S. Business on Collision Course With Shortages of Skilled Workers

Hurricanes Charley, Francine, and Ivan battered much of the eastern half of the United States these past few weeks, leaving a devastating path of death and destruction. Property damage, caused by rain and high winds, totaled in the billions of dollars. For hundreds of miles, cities and towns downstream of the storm flooded as rivers overflowed their banks. Thousands of businesses were closed, many of them never to open again.

Eventually this hurricane season will come to an end. Businesses will re-build and life will get back to normal - so many people think.

The U.S. business community is in the direct path of an even more powerful storm. Unlike the hurricanes, this storm and its disastrous path can be predicted with a reasonable degree of accuracy. It's what I call the Perfect Labor Storm. When it hits, America will experience the greatest labor shortage in her history. Unlike forces of nature, which come and go, the Perfect Labor Storm will profoundly affect U.S. businesses for years to come, and no region will go untouched. It's barely started and already industries like healthcare, manufacturing and technology are already feeling its effects.

A few skeptics question the accuracy of this forecast when six million workers currently are unemployed or working in low-skill, low-wage jobs. All I can say is that they are shortsighted. The naysayer ignores the key threat of the Perfect Labor Storm, believing the problem is in the number of people available to fill jobs, or having enough butts to fill seats. A new report released by the Aspen Institute only confirms the gravity of the situation.

The Aspen Institute correctly identifies the problem …

"overall skill levels of American workers is on a collision course with the skills requirements of American employers."

Smart business owners will heed this dramatic wake up call and begin to take all necessary precautions to weather the storm.

The impending storm is about workforce gaps in the three areas: number of workers, skill levels, and wages. A business that defends itself against only one gap is vulnerable to the other two. If upper management fails to focus attention on human resources, strategic plans will be as useless as paper files stored in a flooded basement. Human resources professionals also must begin to connect the organization's strategic plan with human capital metrics for their companies to remain competitive and profitable.

Consider these facts:

Although 41 million people are expected to enter the American workforce by 2010, 46 million college-educated baby boomers will retire in the next 20 years.

A serious lack of skilled workers will begin in 2005 and grow to 5.3 million by 2010, and to 14 million by 2015.

If you include the need for unskilled workers, the labor shortage will be 7 million in 2010,and 21 million by 2010.

The shortages will be most acute among managers and skilled workers in high- tech jobs.

The immediacy of the worker shortage crisis is evidenced in a story recently published by the Associated Press about Seimens. The company received 1,000 applicants for 500 new manufacturing jobs. After resume parsing and screening, a mere 35 applicants had the necessary skills to perform the job.

They are not alone. The National Association of Manufacturers confirmed this as an indicator of things to come in a study they conducted in 2003. While manufacturers having lost two million jobs, 80 percent of the association's members reported a moderate to serious shortage of qualified applicants. Despite the depressing news about layoffs, downsizings, and outsourcing, the manufacturing industry is facing a shortfall of highly qualified employees with specific educational backgrounds and skills, rather than a shortage of job applicants.

The business owners who survive the impending labor and skills shortage are those who strategically plan to meet future workforce needs. Success Performance Solutions recommends a three-part strategy, which is:

1. Select the right people
2. Develop the right people
3. Retain the right people

Read more "Perfect Labor Storm Fact Book"

Shortage of Poll Workers

We keep reading about all the unemployed workers. Why then is it then that employers have such a hard time finding employees? The latest real-life example that the impending shortage of workers is not coming but it is here is the shortage of poll workers for the election in less than 3 days.

According to the Washington Post, With less than two weeks to go, the current crop of aging poll workers falls several hundred thousand short of the 2 million the U.S. Election Assistance Commission says is needed to run a smooth national election.......The commission said the problem is acute in large cities, where there are high concentrations of Democratic and minority voters, and it comes at a time when election officials nationwide are expecting that the close race between President Bush and Democrat John F. Kerry will produce record voter turnout.
Why?

State and local officials say the problem has worsened over time as poll workers have grown older; the average age of a poll worker today is 72, according to the commission.

The same thing happened when the government took over security at the airports. The National Association of Manufacturers reports that 80 percent of its member are reporting difficulty in finding enough skilled workers.

The Perfect Labor Storm is not coming, it's here! For more information or update about "Workforce Demographics and Trends" subscribe to our free weekly newsletter or