Overcoming The Talent Shortage
Why Education is not enough
French sociologist and philosopher Auguste Comte wrote that demographics are destiny, and we see that come true in Europe, the United States, and China. Aging populations combined with low birth rates have led to decreasing populations in many countries. In the U.S., the birthrate has fallen to 1.86. To replace the current population growth must exceed 2.1. China’s birthrate is only 1.7, Japan's is at 1.4, and the lowest of all in Italy at 1.2.
Without young educated people to refresh the workforce, organizations are compelled to either relocate to places where there are available workers, increase the use of robots and automation, or find more efficient ways to produce and deliver their products or services.
Immigration can help temper the loss of older workers. Immigration of unskilled or semi-skilled workers is helpful in some industries, but this simply shifts the imbalance. Many countries limit immigration to skilled or highly educated workers, but this is a minimal number of people and does not change the equation.
The bottom line is clear: The overall global workforce is shrinking, and this shrinkage has been exacerbated by the pandemic, which forced many skilled and experienced older workers into retirement. While the populations in many African countries are still growing, these young people will not be employable in large numbers for perhaps a decade. They will not have a significant impact on current organizations in developed nations.
To compensate for the talent shortage, at least temporarily, organizations are increasing salaries and trying to accommodate different working styles. By offering virtual working arrangements and hybrid work, the impact of the talent shortages is somewhat alleviated. These are stopgap measures and are not sufficient to change the course of history.
As demographics are destiny, we will have to deal with a smaller and very diverse workforce. This will require major changes in organizational structure as well.
Educating more people is often thought to solve the talent shortage. While educating workers is necessary, it must be primarily for workers that cannot be replaced with automation. Deciding which roles are not likely to be automated is the first step. The second is to develop a holistic development process that includes formal training in an academic setting, on-the-job learning, mentoring, and perhaps an apprenticeship period. It also means creating a philosophy of continuous learning as work evolves and new technologies replace older skills. It also requires pay incentives and flexible time for study and practice. All skills evolve; as we learned in the last century, failure to keep up with skill changes leads to mistakes, inadequate performance, and ultimately failure.
A Better Fix
Education by itself cannot solve the talent shortage. As populations decline, it will be necessary to restructure jobs and work and incorporate technology. It will be beneficial for organizations to take a more strategic look at the nature of their future work needs and what type of workers and workforce will be best suited to accomplish their goals.
They need to decide what the workforce composition should be - in other words, which positions should be permanent and which should be filled with temporary workers, contractors, outsourced or automated.
Many roles can be replaced or deeply augmented with software or robotics. Warehouses are doing this now. Amazon, Walmart, and many other firms are rapidly adding robots to make up for the declining number of workers they will be able to attract and afford. Tesla is manufacturing cars with far fewer workers than other care makers because of their extensive use of robots. Fast food restaurants are automating rapidly to reduce staff. Economics will play a prominent role in this decision: as the cost of workers rises and the relative cost of automation declines.
How should a company be organized? Traditional models are already morphing.
We will see flatter structures with fewer managers and layers of authority. Work will be teamwork and project-based. It will also be far more virtual and may have no physical presence. Structures such as Zappos holocracy may become more common.
What is certain is that there will be fewer and fewer of the large, hierarchical organizations that dominated the twentieth century.
The Ultimate Workforce
The ultimate workforce may be quite different from what we see today. Instead of scores of programmers, coders, data crunchers, HR generalists, managers, and so on, we will see a smaller, more focused workforce that uses automation and restructured work to compensate for the shortage of workers.
Services such as marketing, finance, legal, and human resources, will be largely automated or outsourced with a focus on automation. A typical firm might consist of a handful of strategists, designers, consultants, data scientists, engineers, and sales professionals assisted by automated tools. There will be a few program managers. Workers will be widely dispersed and may work for more than one firm simultaneously.
Education will be essential to keep this small workforce sharply honed and competitive, but it will not be seen as the solution to any talent shortage.
The Role of the Recruiter
I believe that role of the recruiter as we define it today will slowly disappear. Recruiters will become part of a larger and more strategic workforce development and planning process. Rather than focus on hiring permanent people to fill clearly defined roles, they will be chartered with finding, guiding the development of, and integrating people into the workflow to solve problems and create services or products. Finding and nurturing scarce talent will be a major activity.
The world of talent is about to become far more complex and essential than ever. It will require people with broad skills and creative approaches to lead this revolution.
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