Mark Lautman CEcD
After a decade of financial market turmoil, recession, escalating tax and regulatory burdens and the constant barrage of global market disruptions and creative destruction, C-suite execs are recovering from their own version of PTSD. So, the last thing Post-Recession-Stress-Disorder-suffering management teams need is another big game-changing threat to worry about.
But there is such a threat, and it’s a wicked one.
Baby Boomers are the first generation in human history to not have enough kids to replace themselves, and they’ve compounded the problem by de-coupling the public education system from the needs of employers. As a result, many of the kids they had are unprepared to learn how to do the jobs of the future. Throw in rising technological demands of the workplace, shorter industry life cycles and a web of state and federal disincentives to work, and things get worse.
What we’re facing is a chronic shortage of qualified workers, and that is changing the physics of the U.S. business environment in ways that will cause most employers to rethink their business models, their locations and their roles in the civic affairs of their host communities.
Here’s what it means: Everyone you are going to hire in the next 25 years has already been born. We know how many there are and how many took Algebra II. All 75 million Boomers will be over 55, seven years from now. As they bail out of the workforce, there just aren’t going to be enough qualified entrants from the Baby Bust generation to replace them. This creates a zero-sum game.
A zero-sum market changes everything. It shifts the power in the hiring relationship from employer to employee. It reorders the criteria for corporate site selection and reverses the chi in the economic development process. Employers, governors and tax incentives don’t decide where the jobs are created anymore. Employers have to locate their jobs to places where the workers want to go. A zero-sum game means that if you need to add qualified employees to survive or grow, you will have to steal them from your competition. In this war for talent, there will be only winners and losers; those that can grow, attract and retain new qualified workers at will, and those that can’t. Lastly, it redefines the relationship between the C-suite and the communities that host their operations.
Employers now have to worry about being stuck in a loser community. Choices are limited. You can help fix the local education and workforce pipeline, help make the community a talent magnet, move to a place that is already a talent magnet, automate or sellout and move to Boca.
If you elect to move, you need bulletproof site-selection criteria to assess the capacity and level of commitment of candidate communities to grow, attract and retain a healthy surplus of the kind of workers you are going to need. If your strategy is to automate, you are of limited value to communities looking to rebalance their ratio of wage earners to dependents.
Any employer that wants to head off being starved of labor needs to act now.
If you wait five-to-seven years for the problem to become the crisis du jour, it will be too late. Most solutions you come up with now will take at least seven years to move the needle. So, the prudent thing to do is act strategically now.