Changing, Aging Workforce Demographics, Global Trends Mean New Challenges For Organizations, HR Departments
Slowly, a realization is growing in many companies that significant segments of their employees, including many key workers, are aging.
An analysis of recent studies and reports published by the Department of Labor data reveals a growing trend in which increasing numbers of staff, both "general", and key workers in particular, within many organizations, are now past the 50-year-old mark. In fact, many firms are facing this challenge in 2007, given the aging of post-World War II generations.
With this trend comes a sense that traditional worker loyalty and values are also being eroded. Driven by pension and healthcare problems in many large corporations, commitment to one’s employers and a work ethic that values job performance, customer service excellence and other more “traditional” values, is eroding.
Should this trend continue, within a few years, many companies will face an exodus of workers who will carry the company mores and intellectual property with them.
At the same time, younger workers, with differing outlooks and expectations, are moving into the workforce, bringing with them a new set of management and HR requirements.
These same Department of Labor statistics also seem to indicate that a growing percentage of younger Americans are not seeking work at all. Whether this means they are more entrepreneurial or discouraged by employment prospects is yet to be determined.
For a long time, the big news was the influx of women into the labor force. The data comparing March 1966 to March 2000 — both periods during which the unemployment rate was around 4 percent — reveals that the percentage of working-age men who had jobs fell significantly in almost all age groups, with the biggest declines among those over 55, in which case it was reasonable to think that earlier retirement was taking place.
In the past, more than offsetting the declines in the number of men working were increases in employment of women in all age levels — except over 65, where retirement again seemed responsible. The figures do not show the extent to which the increase in women working reflected better job opportunities or economic necessity, but the trend was clear.
The numbers are based on monthly surveys of households by the Labor Department and a New York Times story that analyzed figures on a bi-yearly basis.
According to that publication, in the last six years, the trends have turned around. Even though the unemployment rate for March was 4.7 percent, not much higher than it was in March 2000, the percentage of people working has fallen in every age group except the highest ones.
Men and women above 55 are more likely to be working now. Again, it is not easy to tell whether that reflects a greater opportunity or a greater need for income.
What that means is that younger people are significantly less likely to have jobs now than they did six years ago. Thus, it should be no surprise that in the Conference Board's consumer confidence survey, the number of respondents who think jobs are plentiful now is barely half the number who thought so in March 2000.
Argues the publication, the unemployment rate is so low because fewer people say they want to work. The labor force — those with jobs or saying they want one — is rising at a much lower rate than the working-age population. The rest do not count in the unemployment figures, but that may not mean they are happy about being unemployed.
Some experts believe the trend is for many younger individuals to opt for an independent style of working, either as contract employees, setting up their own businesses or being part of a “phantom” economy that is based on cash and barter relationships.
A book coming out next month is called Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent by HR experts Robert Morison, Tamara Erickson and Ken Dychtwald.
Some experts believe these trends mean businesses are soon to face a significant new problem, never before dealt with in corporate America—a chronic shortage of workers with the skills the economy needs. Given increasing longevity, declining birthrates, and the disproportionate size of the baby boom generation now approaching traditional retirement age, the age profile of employees is changing dramatically. Too few skilled young people are entering the workforce, and a debilitating “brain drain” looms. Organizations must look at the workforce quite differently and adapt management practices accordingly. And they must take action now—before the crisis hits full force—if they hope to ensure their talent supply in the decades to come.
In Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent, Ken Dychtwald, Tamara Erickson, and Robert Morison explore the unprecedented shift in age distributions of the general population and the labor force, and show why no organization can ignore these demographic trends and their implications.
Considered by many to be the single most important trend of this century, the changing demographics will have – and is already having – a fundamental, pervasive impact both on the way business operates and on how each of us, as individual employees, live our lives.
A recent study by Watson Wyatt Worldwide found “that shareholder returns posted 42% points higher at companies where employees trusted top management than at companies where distrust was the norm.”
Another excellent book is Trust & Betrayal in the Workplace: Building Effective Relationships in your Organization. (2006) by Dennis S. Reina, Ph.D. and Michelle L. Reina, Ph.D. They are principals of the organizational development research and consulting firm, Chagnon & Reina Associates
The authors argue that in order to create healthy workplace environments - places where employees WANT to come work, there are two basic needs that should be addressed:
• the Business need
• the Human need
These needs require leaders to have working relationships with their employees based on a solid foundation of trust.
Building trust is not just a nice thing to have—it is sound business! Business leaders are beginning to realize that the level of trust in an organization affects working relationships, retention and performance.
