On Forbes.com, the January 2nd McKinsey Quarterly has an interview with Jeffrey Joerres, President and CEO of Manpower, the second largest employment provider on the planet. McKinsey reports:
The global market for labor is changing in unprecedented ways. In developed markets, such as the U.S. and Western Europe, executives face a rapidly aging workforce and high labor costs. Meanwhile, executives in China, India and much of the rest of the developing world increasingly encounter want amid plenty, as a shortage of suitable candidates and the changes associated with the staggering pace of economic growth make it difficult for companies to attract--and retain--enough qualified workers.
Joerres adds:
When I look ahead, I see the talent crunch creating structural changes in the workforce, and companies that aren't paying attention might find themselves healthy one year and in trouble the next--it will be that dramatic. The focus can't be just on the top 10% of your organization; your janitor had better be good and your clerks had better be good, because the whole process is different. Companies will need to focus on the whole equilibrium of talent, because they're running themselves so lean that if they get a little sand in their gears, the whole organization breaks down. Some leading-edge companies see this, but they're being quiet about it, because they don't want to sound any alarm bells.
But wait, there's more.
This is an important point, I believe.
For the biggest companies, temporary labor is no longer an incidental concern--it's now strategic. Particularly after the downturn in 2001, we saw major companies reevaluate themselves in an effort to become more efficient and more productive. They "leaned out" their entire organizations, thinned their product lines, stopped their nonessential projects and started expecting more from their people. As they stretched the limits of their people, companies found they were getting by with a leaner organization. Now executives won't go back to the way it was--they can't, because their companies are publicly traded and investors won't let them.
Honest. Scary, but honest. I know that some will say that it's just big corporation's way of avoiding paying benefits, but I think that's a much smaller bite than some might think. Joerres says there's something else to think about.
Think of a Webmaster. As my children would say, "That's yesterday." That was a pretty hot job not so long ago. Now, with the right software, you can press a button and create a Web site, so the market for those skills is significantly lower.
Today, hot jobs turn cold almost as fast as a product's life cycle changes. So if the cycle used to be three years, now it's nine months. Every industry has its own speed of compression, of course, but underneath the compression is a never-ending treadmill of improving your skills. It's quite sobering for people to find themselves on the cold list, when 12-months before they were on the hot list. This makes the retraining of employees immensely important.
It takes time to retrain. Many companies don't have the time to wait for someone already within their organization to get re-trained. So they go out and hire someone who can come in with an established skill set and do the job right away.
So the pace at which technology is changing business is a huge factor in changing what businesses need from their employees. Think about that the next time you evaluate one of your core competencies!
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