To formulate and implement a meaningful talent management (TM) strategy in an organization, its top leaders need to answer at least three very important questions: Which jobs drive greatest value in our organization? Are we allocating our scarce resources to achieve highest impact? How do we stay ahead of our competition? To try and answer these questions, it is first necessary to understand current workforce trends. Among these key trends are rapidly aging population, increased diversity of the workforce, significant skill deficiencies, and employees’ changing attitudes. Let’s now talk about these trends in more detail.
It is no secret anymore that US population is rapidly aging, which is felt in virtually all occupations. Even though the overall number of workers has increased in the past decade, the fastest growing segment was workers aged 45-64. In 2015, employees aged 40 and above have exceeded the number of those under 40 for the first time ever. Moreover, the teenage workforce is 33% smaller than in it was 2001, while the number workers 55 years of age and older increased 40%. Employees aged 55+ now make up 25% of the workforce in 210 occupations, while in 2014 there were only 86 such occupations. Many organizations have already begun struggling with ways to control costs and would have to find new ways to attract, retain, and prepare the youth labor force.
The increased diversity is the second key trend. Diversity itself may be of different types, but the most significant ones for the US labor force are represented by gender and racial diversity. Women nowadays make up a greater share of workforce: 49% of jobs were held by women in 2014, as opposed to 48% in 2001. This one percent increase does not seem like much, but it translates into 4.9 million more female workers since 2001, compared to just 2.2 million additional male workers for the same period of time. The US population is also more racially and ethnically diverse now than ever before, and so, therefore, is the workforce. For example, while Black/African American workers held approximately 12% of jobs, unchanged from 2001, both Hispanics/Latinos and Asians held 13% and 5% of jobs respectively, up from 11% and 4%. At the same time, White/Caucasian employees lost their share of total employment, dropping to 69% from 72% in 2001. The greater diversity of the labor force challenges employers to create TM practices that ensure they fully utilize the talents, skills, and values of all employees, irrespectively if their national, racial, or ethnic origin. Managing such diversity involves many different activities and touches upon many perspectives in staffing, work design, training perspective, compensation, and others.
“Women nowadays make up a greater share of workforce: 49% of jobs were held by women in 2014, as opposed to 48% in 2001.”
The third, and perhaps the most essential, trend is workforce skills deficiency. Serious technological and organizational changes over the past few years have shifted the kinds of skills required of employees in the global economy. Most organizations are now looking for superior skills and educational achievements beyond traditional undergraduate degree, which has become a basic requirement for many jobs today. Some companies are advertising positions for which not one but two Master’s degrees are required – generalized MBA and one specialized Master’s (e.g., in finance, natural sciences, engineering, IT, etc.). Whether or not these requirements are justified, it is becoming challenging for both candidates to satisfy these demands and employers to find qualified talent. This means that the gap between skills needed by organizations and skills offered by the labor market is real. That is why, when asked, 48% of US employers cite finding qualified talent to staff skilled positions as their biggest concern. They report that the most challenging talent to find is that with qualifications in STEM (Science, Technology, Engineering, and Mathematics) subjects.
The last key trend is changing employee attitudes. Out of 8,000 adults surveyed in 2015, 71% of those currently employed are actively seeking or are open to a new job. 58% look for new job opportunities at least monthly and 18% daily. This must be very disconcerting to the employers who spent time and money to recruit, hire, and train these employees. The study demonstrates that the younger and more educated employees are, the more often they look for other career opportunities. This in turn means that the all-important psychological contract – a feeling of mutual loyalty, respect, and commitment that employers have towards their employees and employees have toward their employers – is totally out-of-balance and needs immediate attention on the part of organizational leadership.
Among other current workforce trends are increased workforce mobility, continuing talent wars (between 70 and 84% of employers are currently “hunting”), significant focus on wellness and work/life balance by the employees, and continuous technological disruptions. The most important one among them though is the influence by Millennials, which account for about 36% of the workforce in the US – a number that keeps on growing. We will talk more about Millennials and challenges associated with that generation in my next article.