Posted on 02/17/2005 9:25:25 AM PST by qam1
RISMEDIA, Feb. 16 – Impending Baby Boomer retirements, a widening skills gap driven by declining educational standards, and outdated and ineffective approaches to talent management are combining forces to produce a "perfect storm" that threatens the global business economy, according to Deloitte Consulting.
In a recent U.S. survey of human resources executives nationwide conducted by Deloitte Consulting, more than 70 percent of the 123 respondents say incoming workers with inadequate skills pose the greatest threat to business performance over the next three years, followed by Baby Boomer retirement (61 percent), and the inability to retain key talent (55 percent).
These survey findings are underscored in Deloitte Research's report, "It's 2008: Do You Know Where Your Talent Is? Why Acquisition and Retention Strategies Don't Work."
"The overwhelming accumulation of data, including Deloitte Consulting's new research, points to an inescapable conclusion: the widening skills gap, particularly among the categories of workers who disproportionately drive companies' growth and performance, is a global phenomenon that will create unprecedented challenges for businesses," said Ainar Aijala, vice chairman, Deloitte Consulting and global service area leader of Deloitte Consulting's Human Capital practice. "The confluence of demographic and social trends -- the full force of which will begin to be felt in as little as three years -- will leave behind companies that do not begin to rethink and redesign their approach to managing human capital."
In only three years, the first wave of Baby Boomers will turn 62, the average retirement age in North America, Europe and Asia. According to the Deloitte Consulting survey, one-third of U.S. companies expect to lose 11 percent or more of their current workforce to retirements by 2008.
"While the 'greying' of the workforce will independently create large vacancies across industries, additional factors, such as low birth and immigration rates in Europe and the single-child policy in China, present further perils to companies worldwide," explains Aijala. "Companies will also continue to face inadequate skills among an increasingly diverse, virtual, global, and disengaged workforce."
Life sciences, energy and the public sector will be the hardest hit with manufacturing, consumer business and financial services industries close behind. For example, Canada, Australia and the U.S. could lose more than a third of their government employees by 2010. The National Association of Manufacturers revealed in a recent survey that more than 80 percent of U.S. manufacturers face a shortage of skilled machinists, craft workers and technicians. Further, the U.S. Department of Education predicts that 60 percent of new jobs in the 21st century will require skills possessed by only 20 percent of the current workforce.
Among the many threats affecting the global workforce over the next few years, the exit of "critical talent" could be the most damaging. Deloitte Consulting defines "critical talent" as the individuals and groups who drive a disproportionate share of their company's business performance and generate greater-than-average value for customers and shareholders. These individuals are "critical" to their company's ability to meet strategic goals and objectives.
"When we talk about critical talent, we are not necessarily referring to the 'A players' or senior executives," explains Mike Fucci, principal and U.S. leader of Deloitte Consulting's Human Capital practice. "Critical talent represents those individuals who possess highly developed skills and deep knowledge of not just the work itself, but of how to make things happen within a company, such as the couriers within package delivery companies who have daily client contact and direct knowledge of the supply chain, or researchers and clinicians within drug companies."
Unfortunately, few organizations have talent management processes in place to address the impending workforce shifts that will negatively impact critical talent segments. In fact, only half of the organizations surveyed by Deloitte Consulting have identified a list of the critical skills they need for future growth. Even more alarming, more than a quarter of respondents say defining critical skills as a workforce tool is "unimportant."
"Employers need to focus quickly on understanding which skills will make or break their business, where those skilled individuals will come from, and how to keep these workers engaged and committed within the organization," Fucci cautions. "Only those organizations that respond swiftly and plan effectively will find themselves on top of these new challenges."
Traditional approaches to talent management frequently focus on acquisition and retention. When the talent pool tightened in the 1990s, companies responded by offering rich compensation packages and "hot skills" bonuses. The end result, however, was often disappointing -- recruiting costs soared while investments in training languished. In addition, such compensation packages were often matched by competitors, contributing to high attrition rates of talented personnel.
Despite the changing landscape, organizations still plan to increase their investment in traditional talent solutions for 2005. Approximately 60 percent of survey respondents plan to increase experienced employee recruitment, while 42 percent plan to increase campus recruitment. Additional investment will also be given to rewards packages for experienced employees (39 percent) and new recruits (30 percent).
"Acquisition and retention strategies remain important parts of talent management. Such strategies, however, attend to the "end-points" of the process and only offer a quick fix to these new workforce challenges," says William Chafetz, national practice leader of Deloitte Consulting's Organization and People Performance Services. "To survive the changing labor landscape, organizations must employ more comprehensive talent management strategies that reflect an understanding of critical workforce segments and satisfy the conditions those employees need to succeed."
According to Deloitte Research, talent-savvy organizations build strategies around what matters most to their critical talent -- their personal growth or development, their need to be deployed in positions and assignments that engage their interests and curiosities, and their connection to others in ways that drive performance for the company as a whole.
Many of the companies Deloitte Consulting surveyed seem to understand the importance of development and training their employees, with nearly three- quarters (70 percent) of respondents planning to increase investments for mentoring and coaching in 2005, e-learning (64 percent) and classroom training (49 percent). "It is a great sign that most organizations are committed to strengthening the skills and knowledge of their workforce, but they need to do more," states Chafetz. "No single part of the talent management process can sustain an organization or generate superior business performance on its own - organizations must adapt a new way of thinking and use critical talent as a competitive advantage and a long-term investment."
LOL! Very economically productive talent, that.
you can't explain that basic concept to the free traders here - they just do not understand how globalism is depressing US wages, and toss in the chinese currency peg which we seem unwilling to fight to have them drop, and its just makes no sense for americans to even consider those professions any more. you can make far more money being a waiter at a busy restaurant.
those companies don't care - because the entire global labor pool is available to them for many of their positions. technology, accounting, customer service, engineering - they can get it all offshore for less. unless you are in the executive suite, legal, sales and marketing, or a job that requires a physical presence - you can be offshored.
Maybe because "free traders" do not accept the notion that our wages are falling on faith? What is it with you guys?
You know a guy, huh? Well that settles it.
I am constantly meeting several folks that fall into that category, are now self-employed making as good if not better money and would never dream of reentering the rat race usually led by the dumbest rat.
hear! hear! :)
Right on target! Let's see some respect for the Baby Boomers while we are at it. I am sick and tired of hearing that we were the spend generation for whom everyone of the gen X and Y has to work so hard to pay the bills. I worked myself practically into the grave at an early age. My work ethic was very strong. 14 hour days, 6 day weeks, replaced by 3 people when I burned out. I am not whining. I am just one of the people who was very good at my job, just didn't know how to say enough is enough and protect myself.There are many more like me who learned excellent work ethics from our parents and company loyalty. Too bad companies forgot the meaning of loyalty to employees. When the Boomers are gone, I hope the younger generation can step in and carry on.
" ...What all these idiots fail to account for the the very large labor pool in the 40+ year old age group who are unemployed or underemployed. Generally speaking, this age group is savvy, seasoned, with good skills learned in school and in 20 years of being in the workforce, yet they are cast aside or not called back for the second interview because of their grey hair... When I hear that most of my engineer, programmer and PhD friends can easily find jobs at a salary level that supports a family, then I'll say these companies have a problem... Until then, they're just another whining set of clueless bozos who are not looking at the entire talent pool in this country. They're only looking at the 20-30 yo set, and only plan to pay a salary that not even many single people can use to survive... "
Good points!
Case in point: The other day I bought a shirt at Old Navy that was 75% off $14.50. The young girl at the register rang it up as $4.99. When I pointed out that $4.99 wasn't 75% off of $14.50 she pulled out a piece of paper and scribbled some numbers. After staring at the numbers for what seemed like eternity I could see she was stumped. I'm sure everyone has had similar experiences with saleshelp under thirty who cannot do simple math.
In this case it didn't really matter what the salesgirl does because only the manager can make corrections and getting Osama Bin Ladin to show up at the register is more likely.
True.
I am an old guy who was engaged in scientific work for national defense. As I see it now, as the complexity of life increases, the demand for various jobs change.....sometimes up and sometimes down.
When I was a young man, a machinist was viewed as a very highly skilled, relatively highly paid job in much demand from tool making to crafting complex shapes. Many of the machinists started as an apprentice and as their skills improved, so did their stature....But! Enter robots..enter skilled and low paying offshore labor for the same needs...and exit many areas of demand for the machinist (e.g. remember what happened to the blacksmith making horseshoes).
Many people of long ago were self trained or lightly trained in a variety of occupations without any advanced education. Abe Lincoln never saw third grade and learned how to read on his own, taught himself the law and became a renowned lawyer and then president......try that today!!!Too many bureaucratic hurdles.
Have a great day and I wish you well.
True.
I am an old guy who was engaged in scientific work for national defense. As I see it now, as the complexity of life increases, the demand for various jobs change.....sometimes up and sometimes down.
When I was a young man, a machinist was viewed as a very highly skilled, relatively highly paid job in much demand from tool making to crafting complex shapes. Many of the machinists started as an apprentice and as their skills improved, so did their stature....But! Enter robots..enter skilled and low paying offshore labor for the same needs...and exit many areas of demand for the machinist (e.g. remember what happened to the blacksmith making horseshoes).
Many people of long ago were self trained or lightly trained in a variety of occupations without any advanced education. Abe Lincoln never saw third grade and learned how to read on his own, taught himself the law and became a renowned lawyer and then president......try that today!!!Too many bureaucratic hurdles.
Have a great day and I wish you well.
Quote: You know a guy, huh? Well that settles it.
yes smart aleck he helps out at the school as a part time assistant instructor where I am taking machinist classes.
Machinist trades have taken a hit salary wise over the last 10 years because with cnc machines alot of the work(production) is now done cheaper overseas.
I'm getting sick of the people that say you need to update your job skills/go back to school etc. That is exactly what I'm doing. But I'm faced with making $8 an hour to start(which is way less than I'm making now) and most only pay $12-13.00 with experience. Even the jobs with companies like Boeing etc are drying up or people are being layed off.
Buisiness say go back to school to get more traing. That is what many millions of americans are doing and the job they went back to get technical training for is outsourced.
It's damned if you do damned if you don't.
The report is just cover for more outsourcing, H1-B visas, and tacit encouragement of unlimited immigration, legal or otherwise.
Please add me to the Xer Ping list, thanks.
,,, Holland was quick to start calling workers out of retirement about five years to cover shortages of skilled labour. Other countries will follow suit, for certain.
US corporate management has bought into the idea that ANY job that a person can do by sitting in front of a computer all day, can be done offshore. Large companies are systematically mining through these types of organizations to structure them to be offshored. customer support, software development, accounting, back office and administrative support jobs, etc.
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