The Myth of a Talent Shortage
NOTE: We are on a summer break. This is a repost of an article from May 2020 that has been slightly edited. Next week will bring a new article.
We have been bombarded for a decade with news reports, articles, stories, and books about the looming shortages of talent that are about to overwhelm our industries, businesses, and economies. The pandemic has seemed, on the surface, to exacerbate this because many people have left their former occupations to try new things or have dropped out of the workforce.
There is some validity to these stories, taken at face value and looking at traditional work styles and jobs. Many are choosing to not return to whatever it was they did before Covid and are seeking different jobs, pursuing further education, or just dropping out and finding a simpler and cheaper way to live. If you are looking for cheap hourly workers they are hard to find. Workers are demanding a livable wage, benefits, and better working conditions than pre-pandemic.
The much-ballyhooed talent shortage is most likely temporary focused in emerging or expanding areas where education and supply have not kept up with demand. This includes such fields as artificial intelligence, robotics engineering, some types of coding, alternative energy, and other fields in expanding industries. And, often job requirements are unrealistic, and the required qualifications are excessive and unnecessary. But in time, enough people will have the skills and experience to fill these.
More significant is the widespread adoption of automated tools and robotics that has reduced the demand for many types of workers. For example, only about 11% of workers remain employed in manufacturing, and those workers are more skilled and experienced than at any other time in our history. Automation has replaced thousands of less-skilled jobs, and the need for raw, untrained people has reached very close to zero.
The trend toward automation will continue rapidly as it becomes more difficult to find people willing to work for relatively low wages. As people choose not to return to work, employers will install more robotics. Retail stores, for example, are reducing the number of sales associates by installing systems that let customers do their own check-out. We have already seen Amazon introduce a "black box" retail establishment with almost no employees. They are experimenting with robots to pick and pack products in their warehouses. McDonald’s and other fast-food restaurant chains have installed self-service ordering and payment systems. There are hundreds of other areas where automation will reduce the need for or replace humans when the costs are less than or equal to the cost of a human or when humans are hard to find.
So, it is unlikely that there is any broad-based, long-term shortage of traditional talent. Any shortages that may exist can be attributed to new types of work without trained workers, unrealistic job requirements, over credentialization, geographical location, the nature of the work, and the pay scale.
Our mindset is still in the past and we continue to assume that traditional skills will have value and be needed in volume in the future. The need for retail and warehouse workers will steadily decline and anyone doing routine work with standardized, repeatable processes will be replaced over the next few years.
But the rise in demand for non-traditional talent to fill new jobs will grow rapidly as we emerge from the pandemic even though we do not know what those jobs will be. The jobs that emerge will require skills and attributes that have not been required or widely taught. A sampling of these skills includes analytical skills, negotiation, innovation, teamwork, influencing, cultural competency, and the ability to interact with robots.
If organizations want to prepare workers for these new jobs they need to start training programs, raise wages, and lobby educational institutions to change curricula. Recruitment criteria need to change to allow for more flexibility and less credentialization. Organizational structures need to become less hierarchical and encourage networking. None of those things have happened on a wide scale, but the pandemic may be changing this. Numerous reports and government agencies are proposing changes in how we incentivize and pay for education and training.
Over the past few years, there has been increased interest in internal development programs, internships, internal mobility, and similar development activities. Companies are investing in diversity programs, training, college recruiting, and retention activities to ensure the supply chain. Being a contributing team member is becoming more highly valued than being an individual contributor. But, we have not built good bridges between organizations, educational institutions, and government, nor have we pushed organizations enough to develop their own employees.
The challenge for the government is to find ways to partner with businesses to help them retrain and re-skill thousands of people who are no longer needed in traditional occupations. From high school to university, educational systems rely on yesterday’s curricula and make false promises to students and parents by implying that they will be employable after graduation.
Recruiters know that neither a high school diploma nor a college degree is enough to ensure a job offer. Most occupations require extensive training and take years to master or require skills not even taught. For most people, figuring out how to get a job without having experience is the most significant challenge they face. Creating ways for people to gain experience is a crucial step and organizations need to build bridges which could be internships, short-term work assignments, part-time work, apprenticeships, and so forth. We need to lobby for changes in human resource policies and changes in employment laws that limit building these bridges.
Governments focus on permanent employment, most likely because they derive regular income from salary deductions for taxes. But we need many avenues for people to follow – from being a gig work to becoming a permanent worker. There is no one way that is right for everyone, and having a choice can make a difference in who gets a job and who learns a new skill.
The concept of a talent shortage is based on the assumption that tomorrow will look more or less like today. We know this is no longer true. The world of work is in major flux and over the next decade will completely transform. We now need to encourage experimentation, continuous learning, and a flexible mindset. We need a combination of private, employer-supported training aided with government support both financially and in exacting more flexible regulations and laws regarding the conditions of employment. The 20th Century and its concept of what work should be are long gone.
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