| Newsletter: Sept 2003
Workforce shortage coming back with a vengeance
In 1997, 1998 and 1999 not only were our customers finding it next
to impossible to find and hire employees, but we were also. Everyone
was scrambling, begging, borrowing or stealing employees from everyone
else. The employee shortfall crack became a fissure and a fissure
a canyon in such a short period of time no one had time to react.
To make matters worse the canyon was filled in overnight with the
collapse of the Dotcoms. Ahhh those were the days.
Where we are now.
- Two million workers have been downsized or displaced since
Q3 2001.
- 10% of those that were downsized or displaced say that they
are making less money now than in 1997, before the Dotcom boom.
- The national unemployment rate is hovering around 6.2% the
highest since 1984.
- The skilled workforce shortage lasted 3 to 4 years depending
on the industry.
Where we will be in 10 to 20 years
The days of the late 1990’s skilled labor shortage may hit
us again with a vengeance. But this time, instead of being exacerbated
by Wall Street and the Dotcom revolution, the shortage in skilled
workers will be rooted in the reality of our aging workforce. Let’s
look at the numbers from the US Bureau of Labor Statistics.
- Baby boomers born between 1946 and 1964 are now 39 to 57 years
old.
- Average retirement age is between 57 and 64 years of age, depending
on what numbers you look at.
- Throughout the next 7 years, 30 million people will be hitting
retirement age.
- Only 22 million people will be entering the workforce in the
next 10 years.
- By 2010 there will be a skilled workforce labor gap of 8 million
people rising to 14 million by 2020.
Economists are in anything but agreement on this issue. Some say
there is no escaping the numbers. The numbers are extremely accurate
because we know how many people are in the population and their
ages. Others say that the shortfall won’t be as bad because
the economy won’t be growing by more than 3%, companies will
move more service sector jobs off shore and the remaining will be
absorbed by workers immigrating from other countries.
Whatever the case, it will be a slow process and companies will
have a period of years to make adjustments not days or months as
with the Dotcom revolution. This crack will slowly turn into a fissure
and then into a canyon over a period of 5 to 20 not 2 to 3 years.
And in the end, the economy and it’s workforce will have adjusted
to compensate for the shortage of workers most likely by scrambling,
begging, borrowing or stealing employees from everyone else, only
this time with more experience in how to do it more successfully
and inexpensively.
If you are responsible for attracting, retaining, hiring or creating
incentive plans for new employees there is no doubt you will have
a challenging future ahead of you. Check out future articles for
ideas on how to overcome some of these obstacles.
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