Critical Position Worker Shortages

Rising unemployment cannot abate workforce shortages for some critical positions.

While March brought a rise in the unemployment rate to 8.5%, the supply of workers for several critical positions continued to fall.

Data from the Bureau of Labor and Statistics shows that several occupations may have too few workers to satisfy current demand. In January, the most recent month of detailed data, several occupations recorded an unemployment rate below 4%. 4% unemployment is commonly associated with “full employment,” a term to describe a phenomenon where everyone who wishes to work is employed.

While full employment doesn’t sound like a problem during an economic recession, the reality is that several industries, such as electric utility, mining and oil & gas extraction, are growing. A shortage of critical position workers for an expanding company would have a significant financial impact because these workers hold positions that have a high business impact or mission criticality.

Attracting and retaining critical position workers is a strategic competency for today’s business leader. Below are four groups of critical positions with unemployment rates below 4%. Three groups represent industries. The fourth identifies critical positions within Information Technology. IT is a functional department that two colleges and I maintain is the first corporate area severely impacted by demographic trends (click here to receive a pre-publication copy of our white paper on this trend).

Electric Utility                                          Mining
Nuclear Engineers 0.0%                       Maintenance, Heavy Equip. 0.0%
Nuclear Technicians 0.0%                    Mining & Geological Engineers 0.0%
Power Plant Manager 1.3%                   Roof Bolters 0.0%

Oil & Gas Extraction                               IT Department
Civil Engineers 3.0%                              IT Engineers 3.3%
Maintenance, Heavy Equip 0.0%          IT Hardware Engineers 3.5%
Petroleum Engineers 0.0%                   IT Managers 3.0%


What can employers do if they face a shortage of critical position workers? Three things:

Understand the Risk Exposure:  Determine the severity by conducting an internal and external workforce assessment along five risk categories: Supply, Age, Retirement, Turnover and Generational Friction.

Prepare for a Mindset Change:  Change how you think about your workforce. Instead of viewing it as a homogenous labor pool, segment the workers who are in critical positions in a similar fashion as marketers segment consumers. Determine which workforce segments represent growth, attraction and retention opportunities.

Look for Nuggets:  Collect and share success stories where your organization and others are successfully attracting and retaining critical position workers.


Coal Mining Workforce Growth Achieved in Exchange for Retirement Surge

During 2008, workforce growth in the Coal Mining industry came mostly from recruiting aging workers.


Surprisingly, while the industry was expanding, younger workers were exiting.


This trend is a problem.  While current labor demand is being satisfied, the tradeoff is a future retirement surge.


Furthermore, because so few younger workers are being attracted, the labor supply to fill the vacancies will most likely be insufficient.

Recession Affecting Retail Hiring Trends

During 2008, the retail industry satisfied an immediate labor demand by hiring highly educated workers.  Unfortunately – that only solved one half of the problem.  


While executives are well aware of the global economic recession’s affects on sales and profitability, few may realize the full implications for their workforce.   


A trend emerged in 2008 of highly educated workers taking positions in hourly customer service positions.  Last year, more college educated workers were hired into retail sales positions than any another other occupation. 


This trend poses problems.  While immediate labor demand was satisfied, hiring college educated workers into these roles only shifts the labor challenge from today…to tomorrow.  When the recovery begins, retailers can expect to see high turnover as these workers return to their pre-recession occupations. 


What can retailers do?  Three things:


  1. Determine Your ImpactCollect data to determine how this industry-wide trend is showing up in your stores.
  2. Monitor Turnover DataMonitor turnover for this worker sub-group.  Watching the trend may give you an opportunity to prepare replacements.
  3. Hang On To ThemCollect information from the sub-group to see what it would take to retain them, if not in their current position, possibly in another.

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


Talent Strategy Advisors, an affiliate of Discussion Partners



Employee Concessions Could Give Rise to Labor Union Membership Growth

The end of The Great Depression saw a significant rise in union membership.  From 1935 to 1940 labor union membership as a percent of the workforce rose from 13% to 26%.


While union membership has declined to 12% in 2008, the global economic recession may usher in a resurgence of union membership.


Recent news reports include stories of companies requiring workers to accept employment concessions, most commonly involving:


  • Health benefits
  • Federal Legislation
  • Salary & performance bonuses
  • Vacation & time-off


While concessions are being advocated as a way to help the company remain afloat, overtime workers may become dissatisfied.


As the level of dissatisfaction rises, union leaders may find conditions ripe for organizing and recruiting new members.  In this scenario, it would be very difficult for management to reverse things once momentum built.


What could tip the momentum in favor of Unions?  Three things:


  • Worker Safety Concerns
  • Continued Job Losses
  • Management’s Failure to Make Significant Concessions


While the current downturn may give many workers no choice but to make concessions, these conditions could lead history to repeat itself:  huge growth in union membership and a new reality for management.