Published on November 14, 2008
Turmoil and Trends in America’s Workforce Alex Dodd, CEO M Squared Consulting
Agenda for today • Current economic climate • Talent supply and demand • Flexible workforce • Recommendations
Current Economic Climate • Not likely to lose best talent • Belt tighten, but not so much that you cannot take advantage of upturn • It’s tough, but use this opportunity to address under performers • Do something different – embrace the flexible workforce…
Talent supply & demand • What’s happening on the demand side? – “the work that needs to be done” • What’s happening on the supply side? – “the people that will do the work” • Long-term relationship between supply and demand
3 Primary Drivers Demographic trends… …impacting the workforce supply Firmagraphic changes… …impacting the workplace environment and the nature of work itself Psychographic evolution… …creating a “new” workforce
Demographic Trends • Baby Boomers • Post-Boomer generations • Women in the workplace • “Non-traditional” households • College graduates • Immigration • Life expectancy • Birthrates • Cost of living
Baby Boomers • Reaching retirement age… – Some retiring now – Some continuing to work, full-time – Some continuing to work, on their own terms! • Health benefits… • Financial ability to retire…
Post-Boomer Generations • Generation X is not big enough to replace the Baby Boomers • Generation Y is similar in size to the Boomers, but is not experienced (yet!) • Gen X & Y are radically different in viewpoint than Boomers
Our Workforce 76.7m 73.5m 49.1m 28.5m Traditionalists Boomers Generation X Generation Y (1925-1945) (1946-1964) (1965-1980) (1981-2000) Source: 2005 U.S. Census
Women in the Workforce • A growing segment of the workforce • Make 83% of all consumer purchase decisions • 60% of new college graduates • 60% of working age women work • Driving the creation of new career paths and workplace flexibility
Traditional Households Non-traditional households (i.e. the vast majority of households) want / require (demand!) flexibility
College Graduates • College degree is a prerequisite in the knowledge economy • Declining graduates with engineering and professional degrees • Many foreign nationals are returning home
Immigration • Highly politicized issue • H1B visa’s – 2008 lottery closed in first 24 hours. • No relief in sight…
Life Expectancy* Age 80 75 70 65 60 55 50 45 40 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 *Average, at birth, in the U.S. (Source: U.S. Social Security Administration)
Birth Rates Fertility Rate = 1960 5.9 6 = 2000 5 4.0 4 3.6 3.3 2.0 3.1 3 2.9 2.8 2.5 2.5 2.0 2 1.7 1.7 1.6 1.8 1.4 1.3 1.2 1 0 US France UK Canada Japan Germany Italy China India (Source: Age Wave)
Cost of Living • Most knowledge jobs are in or near major metro areas • Housing • Commuting costs • Education
Workforce Projections… ) m and e (De forc ork U.S. Workforce nW Workforce w th i Gap! Gro ed j ect Pro ply) kforc e (Sup wth in Wor Projec ted Gro 1980 1990 2000 2010 2020 Year
Firmagraphic Drivers • The knowledge economy • Economic conditions • Unemployment • Financial constraints of the firm • Change & Complexity • Outsourcing / Offshoring / Globalization • Employer loyalty
The Changing Nature of Work
The Changing Nature of Work • Knowledge economy is driving the need for specialized workers with specialized skills • Work is becoming more team based • Work is becoming more project based • Technology intensive and enabled work can be done from anywhere • New organizational structures, leadership and management styles are emerging
Psychographics: The Changing Workforce
4 Generations in 1 Workforce Traditionalists Baby Boomers Generation X Generation Y Born: 1925 -1945 Born: 1946 -1964 Born: 1965 -1980 Born: 1981 - 2000 Respectful of Anti- Self-reliant (latch- Confident and full authority authoritarian key kids) of self-esteem Hierarchical Idealistic Anti-institution Impatient and eager to live life Loyal to institutions Motivated by Rule-morphing “now”. FUN! changing the Rule makers and world Tribal Socially conscious conformists Competitive Information-rich Highly tolerant Plugged-in Family-centric
Outcomes of the Changing Workforce • Changing definition of retirement • Desire for greater work/life balance • More career flexibility/control • Looking for greater meaning in work • View work as a “series” of engagements • Diminished employee loyalty
So, the workforce has already radically changed, the nature of work is changing, now the workplace needs to catch up…
The Flexible Workforce
The Flexible Workforce is an innovative human capital strategy that: • Recognizes the changes that are impacting “work” • Leverages the strengths of all 4 generations in the workforce • Incorporates workplace flexibility, allowing people to balance work/family/life • Provides greater flexibility and resiliency for the organization
Developing a Model for Working with Flexible Resources 1. Define the work and desired results 2. Define the skill/experience level required to do the work 3. Define the relationship between the worker and the organization 4. Select the resources to do the work 5. Manage the work 6. Capture and retain knowledge 7. Measure results and satisfaction levels
Flexible Workforce Advantages • Expertise: Brings in targeted expertise • Execution: Enables leadership to focus on execution, accelerates time to market • Cost Control: Buy the expertise you need, as you need it, where you need it. • Flexibility: Manage business peaks and valleys • Perspective: Objective outside experience • Recruiting: Broadens reach, “try before you buy” • Retention: Demonstrates commitment to core FTEs
The Time to Act is Now
Recommendations • There is still talent. It has just changed, and the supply has gotten tighter. • Many professionals no longer want a 9-5 job for life. Their definition of a “career” has evolved to being a “Free Agent”. • You must now play on their terms to get their help.
There is no magic wand… • Traditional FTE employment • Greater use of flexible workforce …and… • Technology • Productivity improvements • Outsourcing/offshoring • Enlightened employment policies • Management practices
Embrace the flexible workforce and make it a foundation of your Human Capital strategy • It demonstrates your commitment to innovation, supporting your staff, and getting work done • It shows you care about success! • It enables you to get the best available talent
Issues and Recommendations www.msquared.com/blog Alex Dodd Chief Executive Officer firstname.lastname@example.org 415-391-1038
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