Labor shortages could bring unique employment solutions

Labor shortages, brought on by the mass retirement of Baby Boomers and a dearth of younger, college-educated workers to fill the void, will fuel the most dramatic trends and transformations in the workplace over the next 25 years.

Imagine one day:
• bidding for workers in an online auction;
• going to class at the Microsoft Lecture Hall;
• setting the work schedule by year vs. week;
• obtaining a degree in generational mediation.

"These are just some of the trends that could result in a society where the number of retirement-age Americans, 65 and older, will grow at a much faster rate than the age groups that will be needed to replace them," said John A. Challenger, CEO of international outplacement firm Challenger, Gray & Christmas.

Between 2005 and 2015, the number of people 65 and older is expected to increase 26 percent. Meanwhile, the population of 40- to 54-year-olds will shrink by 5 percent. Furthermore, there is not much relief behind them: The number of Americans 25 to 39 will grow by only 6 percent between 2005 and 2015.

The retirement surge could result in a human capital crisis for employers across the country. For some, the crisis is a matter of months away. The federal government alone will see 31 percent of its workforce, nearly 500,000 employees, reach retirement eligibility by 2006.

"This will present challenges for employers, workers and society in general. However, it could also present some intriguing opportunities for enterprising individuals and companies. The response to these challenges and opportunities will drive the workplace trends, many of which are already beginning to take shape," said Challenger.

It may be difficult to envision amid downsizing and the highest unemployment rate in a decade, but within 10 years, job seekers will again be in extremely high demand. This could lead to bidding wars over the most talented workers, just as it did in the late 1990s.

In addition to the aging population, the trends shaping the workplace of the future will be heavily influenced by rapidly advancing technology, such as nanotechnology; record downsizing and push toward a just-in-time workforce; and women's ascent up the education and corporate ladder.

Here are Challenger's top trends.

Mediators will be used create generational harmony
With Baby Boomers vowing to stay in the workforce and a growing number of seniors over 65 coming back to work, it will not be long before companies see the age range of their workers span four generations.

To help companies manage the delicate balance between these diverse generations, a new breed of consultant will be created: the corporate age advisor.

He or she will mediate conflicts between age groups, ensure that each department has the right mix of generations to achieve its goals and develop programs to increase the harmony between groups.

Online auctions will replace recruiting
Online auction sites have been used to sell everything from used record albums to multi-million dollar homes, so why not temporary workers? Temporary workers will become increasingly important as companies try to maintain a just-in-time workforce.

However, labor shortages could drive up salaries as well as the fees paid to firms that provide temporary workers. To eliminate the middleman, companies will go directly to the workers through online sites. A precursor to this can already be found in reEmploy.com, which places retired workers with their former employers on a temporary basis.  

Corporations will mobilize to find workers
Fear of change, terrorism, crime, and so forth is prompting more Americans to avoid relocation. For employers, the trend could make things particularly difficult in the next five to 10 years when many experts anticipate severe shortages of skilled labor in certain parts of the country.

In order to survive, more companies may be forced to relocate operations to areas with more potential workers. Corporate migration has become more common in recent years. Up until 1994, only about 5,000 corporate moves were recorded each year. The number has since more than doubled to about 11,000 per year, according to site selection magazine.

Consultants will be hired to teach retirement
Where there is a dilemma, a consulting business cannot be far behind. As the nation's Baby Boomers begin reaching early retirement age in less than five years, a new business opportunity will arise: couples retirement consulting, who will help find ways cope with the changes and help these couples discover what they want to do in their retirement.

Such a service will be in high demand, especially in dual-income households where both husband and wife retire around the same time. The adjustment of going from a situation where both are working to one where both are retired will almost certainly be a difficult one to manage.

Campuses will become corporate billboards
In an effort to influence careers as well as buying decisions, corporations will have a greater and more visible presence on America's campuses and colleges will welcome this with open arms as these institutions fight to hold down surging tuition.

Just as sports stadiums carry the name of the primary corporate sponsor, so will university libraries and science halls. Corporate logos, products and services will become ubiquitous fixtures on campuses.

Flextime will be measured by the calendar, not the clock
The typical 40- to 50-hour work week will one day be a footnote in the history books, as households with two full-time earners push for more flexible scheduling alternatives in order to balance work and personal lives.

One plan that may eventually take hold is setting an annual work requirement. In this option, workers would be required to dedicate 2,000 to 2,500 hours to work-related activities, for example. This would be particularly well suited for industries and businesses that experience seasonal slowdowns that might otherwise compel companies to initiate layoffs.

Women¹s gains will help shrink wage gap
The gap between men's and women's wages will continue to shrink as women flock to labor-short industries for jobs. Women are branching quickly into sectors of the economy that are currently suffering or are expected to suffer from shortages of skilled labor. They also represent a growing portion of graduates in the high-paying fields of dentistry, medicine and law.

More companies will launch programs designed to clear the obstacles hindering women's ascent to the upper ranks of the corporate ladder, such as mentoring programs, audits of compensation issues and continuing education in harassment and discrimination.

Dot-coms will make a comeback
A rebirth of the high-tech industry, which has announced more than 1.3 million job cuts in the last three years, may occur just as rapidly as its downfall. Some of the growth will come from a surprising place: the Internet.

Security is one area well-suited for the Internet and already there are a growing number of companies offering online background checks and identity confirmation. Another area of technology that will take off and require more workers in the years to come is nanotechnology, which is computer technology on a microscopic scale.

Corporate recruiters will follow NBA to high schools
Since the NBA has had success by hiring raw basketball talent right out of high school, why not corporate America? The share of workers with post-high school education will grow just 4 percent between now and 2020. As a result, corporations will be compelled to take over the education of their future workers.

High school graduates will go directly to employer universities, where they will be educated in math, science and technology, the areas where skills seem to be weakest. Corporate educators will continue the tradition of teaching literature, philosophy, psychology, and so on to develop the reasoning and problem-solving skills which are also essential in today's workplace.

Entrepreneurs will get younger and employers will suffer
Undaunted by the downfall of the dot-coms, the generation in college during the recession that began in March 2001, may initiate a new wave of entrepreneurial ventures as the idea of working for someone else loses appeal. The number of colleges and universities offering entrepreneurship programs and degree programs has grown to more than 550, up from just a handful in the 1980s.

Making room for entrepreneurs in the corporate structure is one challenge employers will have to consider, lest they lose some of the best and the brightest to self employment. Companies that can offer positions that allow candidates to utilize their entrepreneurial skills will have an edge over their competitors.

Resumes will go high tech
Nanotechnology that will soon be used for tracking consumer products may one day be used in humans to store a tamper-proof record of one's personal, professional and educational background.

A microchip about the size of a grain of sand could be imbedded in American workers who, simply by passing through a radio frequency field (the doorway into the human resources department), would send the information to the hiring manager's computer.

Such technology will not only eliminate the need for traditional paper resumes, but it will save employers from hiring firms to conduct expensive background checks.

There will be civil war between the 
public and private sectors for workers
The Federal government will battle with the private sector for the best workers, as retirements sweep away the most knowledgeable employees in both sectors over the next seven years.

Labor shortages threaten to impact agencies critical in the fight against terrorism, including Departments of Defense, Transportation and State. The Federal Emergency Management Agency could lose up to 45 percent of its employees. The deciding factor in the war for workers may come down to health care. While all federal employees are eligible for health insurance, the number receiving such coverage in the private sector is shrinking.

Private sector employees who do have coverage are being asked to pay a larger share of rising health insurance premiums. If trends continue, the hiring advantage will most assuredly go to the government.

Back to top

Back to Web-exclusive articles archives