Where Did the Talent Go?
Whether driving across country or just to the grocery store it is hard to miss the number of organizations that are currently trying to recruit new people into their organization. If it seems like there are more “Now Hiring” signs than you can ever remember seeing…you are correct. U.S. companies are currently engaged in a “War for Talent” unlike they have ever seen before. Unfortunately, this shortage will get worse before it gets better.
Origins of the worker shortage: While this shortage of eligible applicants for perfectly good jobs with good pay and benefits has taken most of the country by surprise, it shouldn’t really have surprised anyone. The demographic shifts in the countries’ population have made this shortage a mathematical certainty for almost 30 years. The math goes like this:
--There are approximately 75 million people in the Baby Boomer generation (born 1945-1964)
--There are about 65 million people in the next generation (Generation X) born 1965-1981
You see? The simple fact is that there are 10 MILLION less people in the generation moving its way through the workforce right now. We don’t have to argue whether the shortage is caused by “millennials who don’t want to work or are living in their parent’s basement”. The simple fact is that with 10,000 Baby Boomers eligible to retire EVERY DAY there are just not enough people in the following generation to fill all those roles.
Something that makes the problem even worse for employers is that the Labor Participation Rate (the percentage of eligible workers choosing to pursue employment) is at a historically low level. For decades about 68% of all people working age decided to work. Since the Great Recession that number has dropped to and stayed at about 63%. Not only are there 10 million less people to fill jobs, but of those about 10% less of them are choosing to work.
When does it get better? For those of you wondering if you can just “wait this out” I have both good news and bad news. The generation after generation X is the Millennial generation. That generation is slightly larger than the Baby Boomer generation. So if you can wait another 8 years without filling all of the roles in your organization you need do nothing. If you cannot wait that long, you need to make significant changes in your plans for recruiting, engaging, retaining and developing employees in your organization. How to do that will follow in future blog posts.