Workforce hazards ahead?
Things you may not know about your current and future workforce could hurt your business. You know that your workforce is changing but you may not be sure how or why. What are the hazards and pitfalls to be avoided?
The newer, inexperienced people seem, well you know, less engaged than you remember yourself being at the same point in your career. The people who are experienced seem more seasoned than the veterans of yesteryear.
What about employee health? Why is it that your older workers seem so much healthier than your younger workers? Isn’t it supposed to be the other way around?
Dr. John Howard is the current director of the National Institute for Occupational Safety and Health (NIOSH), an agency of the Federal Government.
NIOSH provides national and world leadership to prevent work-related illness, injury, disability, and death by gathering information, conducting scientific research, and translating the knowledge gained into products and services, including scientific information products, training videos, and recommendations for improving safety and health in the workplace.
In late May 2010 Dr. Howard gave a speech at the American Industrial Hygiene Conference and Expo on the subject of workforce hazards. Not hazards associated with fighting fires or working a mile below the surface of the ocean. He talked about the hazards associated with a changing workforce composition. He covered 11 distinct trends well worth contemplating.
- Limited availability of workers of the future – Fewer young workers are entering the work force, a trend that will continue in the coming years. This can be attributed to longer life expectancies, which increased dramatically over the course of the 20th century; and lower fertility rates in the United States and worldwide. As a result, the work force will see fewer young workers entering the ranks.
- More older workers – Howard, who called older workers “chronologically gifted,” said this group will grow substantially in the work force. “And it’s part of a worldwide phenomenon … This is the graying of the world as opposed to just the United States,” he said.
- Health-challenged young workers – Employers might assume younger workers are in great shape, Howard said, but that’s not necessarily true. Obesity alone threatens large numbers of children and young adults in the United States. Weight problems can lead to high blood pressure, Type II diabetes, sleep apnea, musculoskeletal disorders and much more.
- Key skills deficit in young workers – Howard explained that over the next decade, nearly 30 percent of American 20-year-olds will obtain a college degree, but 60 percent of new jobs will require a degree. With growing numbers of high school dropouts and school districts fighting to improve their graduation rates, Howard said, this is clearly going to add to the global labor crunch.
Perhaps, Dr. Howard’s speech will help answer some questions about the changing nature of your current workforce and help you prepare for future transformations. There are many ways that you can tackle these pending issues. Some are strategic. Some are organizational. Some require new policies & procedures for retaining and attracting talent. And some will require better technology.
As an Oracle Peoplesoft Enterprise customer one new technology worth considering is the HCM 9.1’s talent management product. A previous posting entitled Managing Talent Mismatches covers some of the more useful talent management features incorporated into the current release. Maybe it is a time to take a closer look before the coming talent storm dampens your organization’s prospects for success.
The coming Talent Storm. Are you ready?
A talent storm could be brewing in your organization. The clouds may be gathering just over the horizon. There are several studies and articles that have recently come across the wires that incorporate some form of this critical warning: Retain and attract talent or risk being left behind as the world recovers.
In December 2009 a study conducted by the Economist Intelligence Unit and sponsored by StepStone Solutions found some very troubled waters indeed. Those closest to the workforce are warning that the most talented are not fully engaged in their work yet those at the very top have not yet realized that fact.
A summary of this new report – Companies at the Crossroads which surveyed executives spread over three continents – can be found here. The full version is available at www.stepstonesolutions.com/eiu. Here are a some statistical findings from the report:
- 41% of respondents agreed they have a shortage of talent in their organization
- 44% agreed they find it increasingly difficult to recruit talented employees
- One respondent in two plans to ramp up recruitment over the coming year; only 18% still plan to reduce or freeze headcounts
- Only 16% of line managers said that staff were fully engaged with the business, yet this is not recognised in many boardrooms, with 38% of CEOs saying that trust is ‘high’.
- The top three priorities for talent investments for 2010 are:
- Performance management (voiced by 46% of respondents)
- Leadership development (41%)
- Training and development (36%)
How can you get ready? There are many ways that you can tackle the coming talent storm. Some are strategic. Some are organizational. Some require new policies & procedures for retaining and attracting talent. And some will require better technology.
One new technology worth considering is PeopleSoft HCM 9.1’s talent management product. A previous posting entitled Managing Talent Mismatches covers some of the more useful talent management features incorporated into the current release. Maybe it is a time to take a closer look before the coming talent storm dampens your organization’s prospects for success.
When a trend line falls below 4% it is no longer a trend. It is a fact.
In the technology sector only about 4% of the workforce is highly engaged. IT job satisfaction plummets to all time low.
The CEB’s latest survey found that the willingness of IT employees to “exert high levels of discretionary effort” — put in extra hours to solve a problem, make suggestions for improving processes, and generally seek to play a key role in an organization — has plummeted to its lowest levels since the survey was launched 10 years ago.
In 2007, about 12% of the IT employees fit in category of “highly engaged” workers, but that has since fallen to 4%.
Buying a car? Having a heart operation? Purchasing a ticket for a NBA game? If you discovered that only 4% of the Auto Company’s employees were highly engaged in what they were producing would you still buy that car? If you found out that only 4% of heart surgeons were highly engaged in what they were doing would you then be very, very careful in choosing a doctor? If only 4% of your local basketball team was highly engaged –it works out to be only one player highly motivated to play about ½ the time– would you actually buy that ticket? For most of us the answer would be resounding No.
Why then does this ultra-low statistic (in the real world 4% is about as close to zero as it can be) seem to generate so little concern? I wish I had an answer but I just don’t. However, I can tell you that this situation does remind me of the sub-prime housing market a year before the big crash. If this figure of 4% remains unaltered be prepared to read very soon about big catastrophes resulting from faulty software, hardware, or some combination thereof.
There are many factors — long hours, cuts in pay, few growth opportunities, little or no recognition of work well done—that over time have contributed to this malaise.
How can the industry begin to pull out of this tailspin? Identify the most experienced people on your staff. If you do not have a sufficient level of experienced people internally then seek well seasoned veterans from the outside. Compensate these people what they are worth. Craft challenging opportunities. Recognize their contributions. Start creating your highly engaged workforce now before it is too late. When a trend line falls below 4% it is no longer a trend. It is a fact.
Talent Mismatch: Mega Trend
Finding the right talent is not going to get easier. In fact, in the near future it will become increasingly difficult to match the advanced needs of your organization with the talent available in the global marketplace. That is one of the workforce mega trends identified in Manpower Inc.’s new research study: Four Mega Trends That Are Transforming and Accelerating the Way the World Works.
“The Talent Mismatch is deepening as the working age population declines and the nature of work changes. These significant shifts in talent supply are transforming the global labor market.”
Plan for the future. Planning for the present or the past is by definition a waste of time. Today, unemployment in America is high. But are these unemployed workers necessary the highly skilled people you will need to be successful as the recovery gathers steam? Probably not.
“”As the economy rebounds, companies will need to prepare for a new normal, carefully adjusting their business strategy and evaluating their workforce,” said Joerres. “In the past, access to capital gave companies their edge; soon talent will become the competitive differentiator and companies will compete for talent as rigorously as individuals now compete for jobs.”
There were four mega trends identified in this study. I will only mention one more: Individual Choice. Those with the most desirable skills will have the most choice. This fact will require organizations to re-think how jobs should be structured in order to attract and retain hard-to-find talent.
A official summary of the study can be downloaded here.
Experience Works: A large stack of new lumber
A house in my neighborhood has been in a partially finished state for a long time. The foundation has been layed. The framing has been done. The windows are installed. The roof has been shingled. The exterior has been wrapped. The workers who did these tasks left months ago.
As I walked by the construction site this weekend I noticed a large stack of new lumber. Being curious I approached to take a closer look. Someone was working and that someone turned out to be one of the people who framed our home. Up until the great recession hit he had worked steadily for many years as an experienced framer. I asked about the pile of lumber in front of us. He proceeded to tell his story.
His framing group had originally bid on the job but the owners in an effort to “save money” had gone with a “cheaper” alternative. The resulting structure could not pass inspection.
In fact, as our framer tells it, even the most basic engineering rules had been ignored. For instance, no brick ledges had been created on the foundation. He and I glanced quickly over to the pallet of brick that had already been delivered. No brick ledge. No brick. He said the owners were heartbroken. Stucco is not what they had in mind. Not only that, but stucco was actually going to be more expensive than the original brick.
“The whole thing is going to be more expensive, take longer, and they are not going get exactly what they want”
What was the new stack of lumber for? Critical parts of the existing frame must be torn down. New and stronger structures will be built in their place. The experienced framer is working in partnership with an experienced engineer to save this project.
Do not make this mistake. Do not let this happen to you. Seek competent and experienced help. Do it early. Do not wait until it is too expensive. Do not wait until it is too late.
Experience Works: Bordering on excellence
Your customers, your clients, your users are experienced and savvy. Does it make sense to hire inexperienced and unseasoned workers to interact with them? I think not. Nevertheless, it appears that many businesses such as Circuit City have attempted in the past to do just that. Why? The inexperienced can appear to be cheaper but in actuality most often are not. I believe that true excellence cannot be achieved without experience. Getting the job done right the first time is always going to be the least expensive alternative.
Borders Books is an organization that understands the power of matching customer characteristics to workforce demographics. The Borders people are currently hiring the applicants they think will do the best, most dependable job of servicing their customers. You can find the full article here.
“What we’ve found regardless of age or race or gender, is that if the employees in our stores match reflect the consumer demographics that are of customers shopping those stores in our stores, our sales results are better,” Smith states. “For example, if we have a store in Pico Rivera, California, and 90 percent of the customers coming into that store are is Latino customers, we will see better performance sales-wise if our employee base demographically matches that particular customer base.. If we have an employee base that matches up to that well, our results are better.”
Are you currently seeking a person or group to implement a new project? Do you believe the least expensive alternative is acquiring talent based primarily on hourly rate? If so, think twice. Think thrice. Your risk may be a lot larger than you think. Failure can come in many ways and take many forms. Of course, one of the failures may be your own. Your job or career could end up being placed in jeopardy.
Look honestly at your clients. Are they savvy? Are they experienced? If so, find and hire seasoned people. These veterans may require higher hourly rates but they will also be able to work best with your clients. Cheaper resources likely will not. Can you really afford that risk?
Experience Works: Something else is going on
It is becoming increasingly clear that a growing number of older, experienced adults will continue – for some time to come – to be productive participants in the world of work.
Recently, The Economist, a global current affairs and finance publication, decided to throw a little bit more light on the subject. Someone at the magazine has begun noticing that “Something else is going on” with older, experienced workers. Here is a short excerpt from an article labeled “Older Workers and the Recession” that appeared in the September 12, 2009 edition:
”Something else is going on. Older workers tend to do better in recessions. They have skills, experience and seniority, and are thus last to be sacked. But this does not explain much of the rise in employment; in fact the unemployment rate of those over 55 has actually risen too, though by less than the average.”
In a previous posting (Experience Works: The 93% solution) on this subject I asked the question: Is this longevity good for the nation’s economy? The answer then and now is a resounding Yes; a conclusion backed by Bureau of Labor Statistics showing an upward revision in its measure of non-farm business sector productivity to 6.6%. This figure represents the largest productivity increase since the third quarter of 2003.
Now The Economist seems to agree.
“Younger workers are having a harder time finding and keeping a job because older workers won’t clean out their desks. But in the long term later retirement counters the trend to slowing labour force growth caused by an ageing population, more years spent in college, and a levelling out of women’s participation. So it boosts the economy’s potential growth rate.”
“In the end, it’s not the years of your life that count. It’s the life in your years”
- Abraham Lincoln
Make your next PeopleSoft ERP project 1000% easier
CIO online recently published an article asking the question: Why is ERP still hard?. There is a lot in this article that is on target. However, there is one premise expounded early in the article that deserves closer scrutiny: ERP projects are difficult, lengthy, and expensive because users want too many customizations.
Taser decided to customize its chosen ERP package to meet the business processes that it already followed. “So rather than take an ERP system-which supposedly out-of-the-box has, say, an accounts receivable [process], with best practices that are inherent to the system, we decided…to modify AX to work like this other application because users were comfortable with it,” he says, “and they didn’t want to change.”
I view ill advised customizations as a symptom not a cause. In many cases the root cause is the absence of people with sufficient ERP project experience to properly and efficiently tailor the package. In my experience most PeopleSoft ERP projects become “hard” as a result of having the wrong people doing the right things, having the right people doing the wrong things, and, of course, not having the right people at all.
Want to make your next PeopleSoft ERP project 1000% easier (and less expensive in the long run, too)? Seek PeopleSoft veterans who know the application best. They are the ones who will find innovative ways to meet your organization’s needs. What should you expect from a well seasoned resource?
These are the delivered features and functions that most closely match your requirements. Here is a re-engineering option successfully and inexpensively implemented by another customer. If you make this small, peripheral change almost all your needs will be met.
Of course, there will always be internal needs that cannot be met by an external package. The million dollar question is what to do. Does it make sense to re-write the core delivered components? Or, can a more elegant way be found to meet the need without creating an upgrade nightmare. An experienced person can help your organization make the smart choice. Save time. Save money. Reduce stress. Make your next PeopleSoft ERP project 1000% easier.
Experience Works: The 93% Solution
The Pew Research Center just recently released a study on America’s aging workforce. The main conclusion is that an increasing number of older, experienced adults will continue – for some time to come – to be productive participants in the world of work.
“..93% of the growth in the U.S. labor force from 2006 to 2016 will be among workers ages 55 and older.”
Is this longevity good for the nation’s economy? There is another way of asking the question: Is the economy becoming more productive? The answer is a resounding yes. A few days ago the Bureau of Labor Statistics revised upward its measure of non-farm business sector productivity to 6.6%. This is the largest productivity increase since the third quarter of 2003.
There are two main reasons that the average age of America’s workforce is increasing. The first reason is that older adults are staying in the workforce longer and the second is that younger workers are staying out of it longer. Makes sense.
We all know that in some part this choice by older workers is driven by economic realities. The other part is less obvious. Mature and experienced adults have a strong desire to continue contributing. They just plain want to accomplish even more than they have already accomplished.
“When asked to identify specific reasons for working, older workers emphasize psychological and social factors: “to feel useful”; “to give myself something to do”; “to be with other people.” Younger and middle-aged workers are much more inclined to cite classic pocketbook considerations: “to support myself and my family”; “to live independently”; “to qualify for retirement benefits”; “to receive health care benefits.”
Younger workers, those 16 to 24, are having trouble finding jobs in this downturn. What are they doing instead? The study found that they are going back to school in droves, investing heavily in acquiring greater knowledge and better skills. I know many in this age group would rather be working but I also know that the best investment you can make is not in a new shiny car, a fancy shirt, or an expensive night on the town. The best investment you can make is in yourself.
“..a rising share of Americans ages 16 to 24 are in school and a declining share are in the labor force — 57% today versus 66% in 2000.”
“In the end, it’s not the years of your life that count. It’s the life in your years”
- Abraham Lincoln
New Research: Seasoned workers boost business performance
A new study conducted for the McDonald’s corporation demonstrates that older workers do make a real and measureable difference. An appropriate mix of youth and experience does lead to a statistically significant improvement in business performance. Lancaster University Management School, ranked in the top 20 MBA schools by Forbes magazine, compared similar restaurants staffed with and without older workers. What was the key finding? Customer satisfaction at sites staffed by mature workers was 20% higher.
David Fairhurst, senior vice president at McDonald’s UK & Northern Europe, said: ”Changing demographics in the workplace mean that later life workers are now the fastest growing age group in the labour market. Yet despite the growing numbers of mature workers, their contribution to business and the wider economy often goes unsung.”
He added: ”I urge employers across our sector to realise the benefits of an age diverse workforce. As our experience has shown, the right blend of youth and experience can make a real difference.”
Is your success defined by the satisfaction of your customers? If so, adding seasoned workers to your workforce mix will boost your chances.