Talent Readiness – The Future is Now

Tom Casey, Tm Donahue and Eric Seubert want ALL CEOs to appreciate the imminent “Perfect Storm” of human capital change.  In their NEW book, Talent Readiness: The Future is Now,  they offer advice for CEOs needing to navigate the unchartered waters of globalization, declining engagement, and shifting demographics.

Available, now,  from Amazon, Barnes & Noble and iBooks.

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Critical Position IT Pulse Survey

Demographic trends are colliding with a global economic recession – how will this affect the supply of critical information technology workers is unknown.

 

Many are aware of the demographic trends affecting information technology occupations.  An abundance of senior workers nearing retirement and surprisingly, a dearth of younger workers entering the field. 

 

While the current global recession has tempered demand for IT projects, what will the supply of critical IT workers look like as the economy exits the recession and demand for IT projects rises?

 

Will we satisfy demand with senior workers? 

This response trades one problem for another.  While demand is satisfied, a knowledge retention problem is created for tomorrow as these workers WILL retire.

 

Will younger workers gravitate to the technology field? 

Without younger workers, the labor supply for future vacancies will likely be insufficient.

 

To understand the affects of demographics trends and the global economic recession we are initiating a monthly information technology workforce pulse survey.  Each month, the results will be distributed via email and published on our website. 

 

The survey is 6 questions and will take less than 2 minutes to complete – yet the collected responses from IT executives, like you, will be eye-opening!

 

We are releasing the survey in a few days and hope you will participate.  If you would like to be included on the distribution list, please drop me an email.

 

All the best,

 

Eric Seubert

Principal

Talent Strategy Advisors, an affiliate of Discussion Partners

937-239-0988

Email: eseubert@talentstrategyadvisors.com

How Bad Is It vs. How Could We Make It Worse

It struck me recently that in over 30 years of consulting this is the first recession where  I have had to cope with Cable TV!  I am no longer sure that the constant flow of bad news is creating a self fulfilling prophecy.   Last week I began counting the “sighs” from those on one News network.  Fortunately at over 50 I had to leave for an appointment.   If I had sat in front of the news all day I would have needed a prescription. 

 

There is no question that we are experiencing difficult times.  All of us have seen our retirement savings plummet, some of us are now underemployed and many are unemployed and worried about theirs and their family’s future.Coincidentally I and 2 of my fellow bloggers were all displaced in the fall of last year so the turbulence for us is real.  At the risk of sounding naïve however, and without ignoring the 12 year lows of the market, I remain optimistic about the Labor Market.  As a global community we were heading for a severe shortage of workers due to expanding demand, shifting demographics, and job aspirations of the “new” labor force.

 

Candidly unless your enterprise was experiencing the pain, we were pretty clueless about the above.  The unintended consequence of the recession to me is it provides a unique opportunity for us to reflect on how we should be thinking about the future workforce.   I would submit that we can no longer disregard the resource constraints and attitudinal differentials that will face us when this recession inevitably ends.   Moreover the one size fits all of how we treat our workers has been for quite some time dysfunctional.

 

The fear that I have is that an already disenfranchised level of Employee Engagement will deteriorate even further during this difficult time.  During the recessions of the 80’s and early 90’s the unemployment rate exceeded the prediction we have presently for this global crisis.   This is due to the demographic shifts.  If we sustain a posture as managers of “you should be glad to have a job” as we did previously, when this recession ends we are in for a very rough ride.

 

The ability to instantaneously share information and a point of view should never be abused.   However in light of this capability, whether it  be the displacement of 1, 100, 1,000, 10,000 or more….we had better treat people who are leaving and staying with respect and support.   The world is much smaller since the advent of Cable News.   We should act accordingly not because of trepidation of criticism: but for respect of our colleagues both current and former, as we are all are navigating very turbulent waters.

Talent Readiness Beyond the Demographics: How are you preparing for the future?

We all approach this ‘workforce crisis’ issue from different perspectives.  For some of us, the issue is quite real and our organizations are worried about a range of issues, including impending retirements, brain drain, a revolving door in key markets, a lack of talent in certain disciplines, generational issues, and looking for actionable insights.  Meanwhile others of us are legitimately left wondering what the ‘fuss’ is about. . .yes, we’ve seen the data but our current talent piplines seem to be happy, healthy and full.  Still others of us are quite simply too busy ‘right sizing’ our organizations and trying to survive in the current economic climate.  Regardless of your starting place on the issue, I think we ought to be asking ourselves some tough questions on behaf of the organizations we serve . . .

  • Do you know what your organization needs to enable its future success?  Do you know what specific organizational capabilities and individual skills will be required to support the organization’s growth strategies . . . short and long term?  Do you systematically spend an adequate amount of time looking outside the organization for predicitive insights about what the future holds for your organization?  Do you drive today’s talent decisions in a way that enables your future viability? 
  • What strategies do you have in place to address key talent gaps?  Do you have a workforce plan . . .have you determined which talent needs are critical to the growth of the business?  As you are making key talent decisions today, are you protecting your future?  Are you global in your mindset, even if your business is local . . . because your talent most certainly thinks globally about where and how they do work. 
  • Do you have an organizational culture that fits the future needs of the organization and the evolving workforce?  What shifts in the organizational culture do you need to start driving now?  Do you have the type of culture that attracts the talent you need to enable your future?  As Edgar Schein so elegantly puts it, “Leaders create culture.  Culture in turn creates the next generation of leaders.”  To influence the success of our future, I think we need to pay attention to leader behavior now.  Given that refining culture talkes time, are you actively and consistently coaching leaders in a way that enables your future not disables it?
  • How strong is the talent pipline?  Has your leadership team identified the key constituencies which have a material impact on both the current and the future performance of the company?  In what ways will the rapidly evolving workforce demographics have the most impact on the talent for these positions?  I think one of the most intriguing questions is how the demographic changes will impact the path to senior management.  The development road to the top is arduous, and once there, the challenges are significant and demanding.  Add generational aspirations and lifestyle needs to the equation, and therein lies the organizational dilemma.  Will your talent pipeline be robust enough to yield the right number of talented leaders when the time comes?
  • How engaged is your workforce?  As your organization competes for talent and a share of mind, employee engagement becomes an important part of the total employment equation.  Over the past several years, companies have tapped into employee engagement initiatives as a way to increase customer satisfaction and bottom line results.  Others have tapped into engaged employees as compelling ways to fuel their growth engine with innovative ideas.  What are your key touch points that influence your workforce’s impression of the company and thus, their engagement?  What undiscovered potential does the employee engagement equation have for your business?  What “unintended messages” has your organization been delivering. . .disengaging your talent at a time when you most need them? 
  • In what ways have you created a culture of learning within your organization?  How will your company retain the institutional memory of those leaving the organization?  Are your employees adequately prepared to deliver against your future needs?  I am convinced that learning will be a source of competitive advantage.  And to do that internal training organizations need to morph into sophisticated learning consortiums with deep experience in a range of learning methodologies and technologies.  They will not only develop the human capital of the company but serve as the innovation engine for the business.  Companies at the forefront are actively using social networking with a range of technologies that appeal to different generational cohorts.  What are you doing to compete?  

The fundamental shifts in the workforce demographics will impact every aspect of our organizations.  The talent decisions we make today will most certainly impact our ability to compete in the future.  Are you forward looking enough to help your organization navigate these challenging issues, regardless of your starting place?

So, how are you preparing?  

Demographic Trends – The U.K. Workforce…..Brewing Risks

The UK is a country of 60.6 million citizens that has fallen into the trap along with most other developed countries.  Its population growth has fallen below replacement levels.  The U.K.’s current fertility rate of 1.8 births is below the the replacement rate of 2.1.  At this point, the U.K., like its counter parts in Central and Eastern Europe need to brace for an on-coming set of workforce issues.

 

 

U.K. Demographics.

 

The 2006 U.K. labor force is about 30.3 million workers, roughly the same size as the combined labor forces of California and Texas.  Four workforce risks are visible in the attached age distribution chart.

 

Age & Retirement Risks

With a workforce where one in four is 50 years of age and older, employers are susceptible to both age and retirement risks (Circle 1).  Age risk is the potential productivity loss associated with an older worker and is a function of the worker and the job.  Retirement risk is the potential loss of an employee to retirement.  With 26% of the population in the 50+ category, employers need to move quickly to counter the effects of productivity changes and retirements.

 

Generational Friction

Generational friction is a term used to describe situations resulting from the differences in behaviors and styles among different generations.  With such a disparity in workforce numbers between the aging boomers and the younger Gen Y workers (Circle 2), I anticipate in some situations significant friction because of the dramatic differences in these generations.  The “new guard” is not always interested in following the ways of the “old guard.”

 

Vacancy Risks

Vacancy risks are a function of labor supply and demand and capture the potential of an open position going unstaffed (Circle 3).  It is expected that a portion of the entry and mid-level positions will go unstaffed in the coming years because of the low percentage of workers in the 16 to 34 age groups.  These vacancy risks will result from not only from labor supply challenges but also from labor demand issues as companies increase turnover by poaching their competition.

 

 

If the U.K., like the U.S., was surprised by the effects of oil shortages, then it needs to begin preparing for the next economic asset shortage its eroding workforce.  Beginning with a workforce plan that focuses on alternative career paths, automation, collaboration would be a step towards mitigating the ensuing risks.

The Information Technology Perfect Storm

The concept of workforce planning has been a core Information Technology (IT) initiative for quite some time. For the most part, it is a mathematical or formulamatic exercise focused on predicted labor growth minus anticipated departures equals hiring needs. Oftentimes there are bells and whistles in the process: but if we are being candid, the above, for the most part, constitutes a workforce plan.

 

This calculation was easier to do over the last four years during the recession, but as you will see, the ability to create a meaningful workforce plan is becoming a very difficult challenge for IT managers.  The complexity is derived from the reality that as we move further into the new millennium, we are encountering a labor market “perfect storm.” This phenomenon can be attributed directly to the shifting demographics of both the domestic and global workforce, post-recession increase in enterprise growth opportunities, and diminishing levels of employee commitment. The storm becomes even more intensified due to the ever-increasing emphasis on globalization coupled with the demand that IT professionals be “innovative” while staying within budget.

 

To read the rest of this artilce, click here

 

 

 

 

 

 

The Human Capital Perfect Storm-The Necessity for Comprehensive Workforce Planning

The concept of workforce planning has been a core human resources capability for quite some time.  For the most part it is a mathematical or formulamatic exercise focused on predicted labor growth minus anticipated departures equals hiring needs.  Oftentimes there are bells and whistles in the process: but if we are being candid, the above for the most part constitutes a workforce plan.

 

This calculation was easier to do over the last four years during the recession, but as you will see the ability to create a meaningful workforce plan is becoming a very difficult challenge for human resource practitioners.

 

The complexity is derived from the reality that as we move further into the millennium we are encountering the human capital Perfect Storm for the following reasons:

  • The shifting demographics of both the domestic and global workforce;
  • The post-recession increase in enterprise growth opportunity;
  • The diminished and diminishing levels of employee commitment;
  • The intensified emphasis on globalization; and
  • The demand that the human resources function be “innovative” while controlling cost remains unabated.

 

Test Your Workforce Planning

 

Below are a set of numbers, all of which are relevant to human resources and workforce planning.

 

For those of you who like to read the last page of a book before the first page, I appreciate your forbearance, as I would encourage all of you to think about the number rather than skipping to the answer.

1)  5.0%

2)  55-65 years of age

3)  35-45 years of age

4)  -39%

5)  1,000 émigré’s

6)  600,000 vs. 75,000

7)  1 worker for every 3 retiree’s

8)  2 for the family and one for the country

 

A Commercial Break

 

As human resources practitioners are loath to take direction and in the hopes that no one skipped ahead, I thought it useful to insert a framework that helps reinforce the workforce planning concept.

 

 

The research, management consulting, and education firm,  NGenera, through its Research Driven Advisory services, has conducted extensive research on the phenomenon of shifting demographics and the implications for the emerging labor market.  This research led to the granting of the McKinsey Award for the Harvard Business Review article It Is Time to Retire Retirement and the recently published book Workforce Crisis.  

 

Based on this research,  NGenera holds the point of view (as illustrated in the above model) that workforce planning needs to be elevated from an activity or at best a sub-process to a core human resources process to insure enterprise competitive advantage.

 

Finally the Answers!

 

To reinforce the hypothesis that the workforce planning process is now essential, I would ask you to think about how many of the numbers, all of which have been in the HR or business press since April 2006, you actually knew.

 

1)  5.0% was the domestic unemployment rate in April.  To reinforce the emerging labor shortage as a concern, during the recession in the early 90’s the unemployment rate peaked at 9.7% vs. this recession at 6.4%.

2)  55-65 years of age is the fastest growing segment of the workforce.  This is at a time when most organizations perceive an incumbent at age 50 to be on the “back 9” of their career.  It is becoming commonplace for professionals to take early retirement to work full time at a different company or to start a business.

3)  35-45 years of age is the element of the workforce that is shrinking.  This presents challenges for retention, career progression, retirement benefits, and development to say nothing about hiring.

4)  -39% is the drop in computer science graduates since 2000.  This obviously has been influenced by the burst of the “tech bubble” but is still of concern.

5)  1,000 émigrés per month is the number of skilled workers who are leaving the United States, most to return to their home of origin.

6)  600,000 vs. 75,000 is the difference in near term engineering and computer science graduates between China/India and the US.

7)  1 worker for every 3 retirees is the prediction for Western Europe, which has a generous social benefit posture.

8)  2 for the family and 1 for the country is an advertisement on Australian TV that encourages larger families.   It is a manifestation that as a society there is concern about the shifting demographics.

 

These numbers should act as a not so gentle prod that it is now necessary to have a more generous interpretation of workforce planning and a plan!

 

 

The Elements of the “New” Workforce Plan

 

The core elements of the new workforce plan are focused on having the right person in the right job at the right time.

 

To do so it is necessary to expand the dimensions of the input to workforce plan creation to encompass at least the following elements.

  • A comprehensive enterprise demographic plan….develop scenarios based upon growth and penetration factors….complicate the current state exercise!
  • A breakdown of the population based on organization affiliation drivers vs. employee satisfaction – i.e., the same person who rates health care as good to excellent may not perceive it as a priority in terms of determinants of employee engagement.
  • Creation of as much flexibility in terms of employment arrangements-phase down, part-time, virtual, etc., without penalty in terms of career progression, benefits, etc.,.
  • Re-thought leadership development and career progression systems.  In China, 60 is young to be on the fast track.  In the US, with the fastest growing segment of the workforce being 55-65 and the second fastest being 65+, it is time to challenge the existing concepts of age.
  • Development of an employee brand that can be taken seriously and does not prompt comments about lack of sincerity.

 

The need for workforce planning is self-evident in the abstract.  The sense of urgency to expand the definition for planning and to actually create the approach should be equally self-evident.

 

 

Tom Casey is a Vice President and leader of the Human Capital practice with.  He can be contacted at tcasey@nGenera.com.