Perfect Labor Storm 2.0

Talent: A Global Commodity

“It's clear that talent has become a global commodity, fiercely fought over by multiple competitors,” says Mark Foster, Accenture's group chief executive.  Corporations are experiencing seismic shifts in demographics, resulting in aging workforces with fewer, younger workers in some parts of the world and burgeoning sources of young talent in other parts; a rising demand for new skills paired with growing deficits in basic skills; more diverse, distributed, and mobile workforces; and, despite a global abundance of people, local scarcities of talent.  (Read more about workforce trends at Perfect Labor Storm)

Facts about global workforce challenges are undeniable.

•Companies and countries will need more than 3.5 billion people by 2010 to fill knowledge worker positions. By 2020, that number will exceed 4 billion. Projections indicate that there will be shortages between 32 million and 39 million people to fill these positions. The U.S. will have the biggest shortfall—needing as many as an additional 14 million people.

• The shortage of talent is particularly acute at the management level. Two out of five Chinese companies find it difficult to fill senior-management positions, and turnover rates at the manager level in China are 25% higher than the global average.

• The balance of the global labor supply is shifting to developing economies. Between 2005 and 2050, the working-age population of emerging economies will increase by 1.7 billion, compared with a decline of 9 million in the developed economies.

• In the U.S., retirement of the baby boomers means that the 500 biggest companies could lose half their senior managers in the next five years.

Talent has become a global commodity. Senior executives are only now realizing that their talent strategy must entail more than just throwing money at high-performers in hopes of recruiting and retaining them. Indeed, talent must be redefined to include not just the best and brightest but the entire workforce—those who contribute all of the skills and capabilities that an organization needs to sustain growth.

Read more about The Global Talent Crisis

The Perfect Labor Storm is real: A 2020 Meltdown

In the view of Ed Gordon, author of The 2020 Meltdown: Solving the Impending Jobs Crisis, the forthcoming IT workforce shortage is a legitimate worry. Millions of Americans who are unemployed do not have the right talent for the jobs that need to be filled, with many people earning college degrees that are not translating into decent employment.

There now are four million jobs empty, Gordon said, and half of them are highly skilled positions that require specialized technology training and education.

“The issue is that the labor market is out of sync with the realities of the global marketplace with the jobs we are creating and the jobs that are disappearing,” Gordon said. “This is a problem all over the U.S. and most of the developed world.”

The High Cost of Employee Misunderstanding

It goes without saying that confident and competent employees are the cornerstones of any successful organization. Thus, employee training and monitoring is of the utmost importance. Yet, on average, one in four employees misunderstands at least one critical aspect of their job.

Most employees in over 400 businesses in an IDC study admitted within the last twelve months alone they had been exposed to either employee or public injuries and loss in sales due to employee misunderstanding. The data also revealed U.S. and UK businesses are losing an estimated $624 per employee every year due to the same issues. That number equates to a staggering $37 billion in annual losses incurred because workers misunderstand one or more crucial aspects of their jobs. 

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Education Pipeline is Drying up

Our education pipeline is drying up, according to a recent report released by the Center for American Progress.  As a result, America is not on track to create the workforce that we need to remain globally competitive in the 21st century, particularly in science, technology, engineering, and mathematics. Improved math and science literacy is becoming increasingly important in a wide range of jobs — not just for chip designers and computer programmers.

And yet sixty-eight percent of U.S. 8th graders receive instruction from a mathematics teacher who did not hold a degree or certification in mathematics. U.S. 15-year-olds rank 24th out of 40 participating countries in an international test that measures the ability of students to apply mathematical concepts to real-world problems. In the United States, only 15 percent of all U.S. undergraduates receive a degree in the natural sciences and engineering, compared to 50 percent in China and 67 percent in Singapore.

Besides science and math skills, global competition and rapid technological change are “raising the bar” on the skills that workers must possess to thrive. Business writer Daniel Pink, author of the book A Whole New Mind: Why Right-Brainers Will Rule the Future, argues that logical and analytical skills are necessary but not sufficient for professional success in today’s world. "As the scut work gets off-loaded, engineers and programmers will have to master different aptitudes, relying more on creativity than competence, more on tacit knowledge than technical manuals, and more on fashioning the big picture than sweating the details."

Workers also need “right brain” directed skills such as the capacity to “detect patterns and opportunities, to create artistic and emotional beauty, to craft a satisfying narrative, and to combine seemingly unrelated ideas into something new.”  More specifically, Pink describes these 6 aptitudes as design, story, symphony, empathy, play, and meaning.

Organizations such as the Partnership for 21st Century Skills, comprised of the National Education Association and major high-tech employers such as Apple and Cisco, argue that students must master not only core subjects, but acquire skills related to critical thinking, problem solving, creativity, innovation, collaboration, and information and media literacy.

Read more about why the education pipeline is drying up:

High School Dropouts: The Silent Epidemic

Are they Really Ready to Work?