The American workforce is undergoing the most radical metamorphosis of any workforce since the Industrial Revolution, and the pace of change within the workplace at this time is unprecedented. Never before has the confluence of such factors as demographic shifts in the population, rapid technological innovation and profound structural changes within the corporation posed such a great challenge – and such a great opportunity – for human resource professionals to help their companies survive and flourish in the future.
Understanding the fundamental causes behind tight labor markets and the skills gap among workers today and in the future is critical, because they provide clues to the trends emerging in the workplace – and show where we are headed in terms of responding to problems and fashioning strategies to meet the needs of companies.
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According to recent studies conducted by the American Society for Training and Development (ASTD), an organization representing the training profession, following are a number of trends and predictions for the future signal and urgent need for workforce training:
Training – specifically, the channels through which it is delivered and the extent of its use as a tool – will grow significantly. Technology will no doubt play a substantial role in how training is delivered; training through such tools as the Internet and interactive CD-ROMs will be adopted by more companies, because these methods can help train personnel at low cost, are accessible 24 hours a day and are infinitely repeatable.
The American workforce will be more highly educated and culturally diverse. However, all workers will need to adopt a “lifelong learning” approach to skills development.
Company infrastructures have already undergone rapid change over the past ten years, and this trend will continue. Companies will become more “virtual,” with teams forming and dissolving as projects are undertaken and completed. This trend also embraces the growing use of contingent workers and outsourcing as a source of skilled personnel.
With the additional training being undertaken within the organization, there will also be a more dedicated effort to measure performance outcomes of the training, in order to assess the true cost-benefit ratio.
According to the Olsten report, there are three factors driving companies to offer job training as a strategy for recruitment and retention: namely, the aging of the workforce, an escalation of critical skills required to perform available jobs and the changing nature of the workplace.
Aging of the Baby Boomers and their Retirement from the Workforce
Between 1995 and 2020, the over-65 population in the United States will increase by more than 60 percent, and the 45 to 64 population by 34 percent, in contrast to the 18 to 44 population, whose estimated growth is a mere 4 percent. Seventy-six million baby boomers have entered the workforce and the first “wave” of these boomers will become eligible to retire around 2010. During that time, one of two scenarios is likely to occur – either boomers will leave the workforce in droves, or they will remain in the workforce past the traditional retirement age – a more probable scenario.
Either scenario has profound implications for corporations
The first will create a significant shortage of qualified workers, since there are simply not enough young people entering the workforce to replace those eligible to leave. Not only are today’s young workers fewer in number, there is ample evidence suggesting that they are woefully unprepared for the jobs and workforce demands of the near future. If present trends in the performance of our educational institutions continue, employers will need to take matters into their own hands and provide remedial and job-related skill training to employees. Employers who offer multiple training options for prospective and existing workers may have an added advantage in recruiting and keeping staff during upcoming worker shortages.
The second, more likely scenario has baby boomers in the labor force well past traditional retirement age. Since this group is demographically diverse, it is difficult to know if this will actually be the case. Anecdotal evidence from surveys suggests that most boomers intend to work well into their seventies, and possibly their eighties. Many boomers have not been making adequate financial provisions for their retirement, and believe they will need to work longer to ensure an adequate standard of living. This scenario, too, has profound implications for corporations’ employee training. Like those who will eventually replace them, many baby boomers will need to upgrade obsolete skills and replace outdated education. If employers again look to this group as a source of skilled workers, they will need to invest heavily in training to keep the skill-sets and technological know-how of these workers up-to-date.
Escalation of Skills Required in the Workplace
The skill-level requirements for the workforce of the future are also increasing. Take the manufacturing sector, for example. In the past, a manufacturing job would typically require a modicum of physical strength, but manufacturers have added advancing technology to increase productivity. Continual advances in technology within the manufacturing industry, therefore, require more highly skilled employees – more brains and less brawn, so to speak. According to The National Skills Standards Board; “Ninety percent of U.S. manufacturers use computer-aided design, and two-thirds use CNC machine tools, statistical quality control, just-in-time inventory control, total quality management and computer-aided manufacturing. New employees must work well in teams, have good math and communication skills, be versatile and know how to learn.”
A survey conducted by the National Association of Manufacturers found that 88 percent of manufacturers had a shortage of qualified workers in at least one category. Most U.S. manufacturers are now scrambling to find solutions to the shortage of qualified workers.
The information technology (IT) industry is the fastest-growing industry sector in the economy, and the demand for qualified employees is growing at near-exponential rates. According to a study by the Information Technology Association of America, “There is currently a shortage of 346,000 IT specialists, with the probability that the shortfall will rise to a frightful deficit of 1.6 million IT workers by the 2005.”
Changes in the Structure of the Workplace
While there is a fundamental need to provide training to new and existing employees to make sure they have the skills to perform their jobs, there may be secondary reasons for employees to invest heavily in training as a recruitment and retention tool. Employers are seen as reluctant to provide training for fear that newly trained employees will soon leave for other opportunities. Though this may sometimes be the case, employers are slowly beginning to see training as a necessary work-retention tool, even if it makes employees more marketable. Employers cannot guarantee long-term employment because of the rapidly changing nature of work in most industries. Therefore, many are offering training as a way to help their employees explore other areas to prepare for the day when the company may no longer need their skill-sets.
At the same time, employees may be more likely to stay with a company as long as they believe the company is investing in them. Companies are going to extraordinary lengths to keep good employees, and training programs that deliver quality training at the convenience of employees are becoming common in benefits packages.
The preceding article has been compiled as a summary of a William Olsten Center for Workforce Strategies’ report “New Models for Closing the Skills Gap: Developing the Workforce of the Future.” The William Olsten Center for Workforce Strategies is based in Melville, New York.
