Industry News

Will Employers Be Desperate for Workers in 2011?

As baby boomers grow older, economists get more nervous. In a few years, this demographic bulge will begin retiring creating the possibility for a severe labor shortage.

According to the Bureau of Labor Statistics (BLS), the economy will create 167 million jobs by the end of the decade with a workforce of only 157 million people - leaving a shortfall of 10 million workers.

While the BLS and other government agencies are predicting labor shortages, others believe those predictions misrepresent the facts.

Who is right? Let's take a closer look.

Joyce Gioia, president of The Herman Group, a management-consulting firm in Greensboro, N.C., recently spoke to the Christian Science Monitor about the coming labor shortage. In an article written by Neal Learner, Gioia said that the government-projected shortfall of 10 million workers by 2010 could "trigger widespread turmoil at workplaces in need of skilled employees."

This shortfall would cause a "drop in the quality of goods and services and force even stable companies out of business," says Gioia who believes that few businesses are prepared for this problem.

Others have a different point of view.

Professor Peter Cappelli, director of the Wharton Center for Human Resources, believes the government is looking at the wrong information.

He concedes that boomers outnumber younger generations, but it is irrelevant because the number of college graduates is actually increasing.

"Some 930,000 bachelor's degrees were conferred per year at the height of the boomers' run through college," says Capelli pointing out that the smallest graduating class for the children of boomers was 1.16 million and is still growing.

While he concedes that there will be a slowdown in the growth rate of the labor force by 2014, Capelli does not believe it will impact jobs. The reason is because the workforce will be more productive due to the increasing number of workers with a post high school education.

For example, today's domestic product is six times larger than after World War II, while the labor force is only twice as large. This, according to Capelli, is a result of greater worker productivity. Of course, this view may not looking at the 3 million jobs Forrestor Research is projecting to be outsourced to other countries by 2015. Would that be a result of job shortages, labor shortages, or economic need?

Perhaps Cappelli's optimism is too premature. According to Justin Heet, a consultant with the Hudson Institute in Indianapolis, productivity growth averaging 2 percent to 2.5 percent annually over the past decade, U.S. workers continue to demonstrate an amazing capacity to pack more production into the typical workweek," says Heet. The question is: "Can they keep it up?"

Other factors affecting the workforce include employer job projections. Most, according to Capelli, are too optimistic. Additionally, many people hold more than one job which could mislead analysts into thinking there are more jobs than workers.

While all this may be true, the reality is that no one can be sure what will happen when baby boomers start retiring. All the analysts are parsing the facts and projecting the future based on their beliefs about the intentions of retirees, employers, and younger workers.

If one of these groups decides to move in a different direction than anticipated, it could change the dynamics. Economic trends could alter the labor availability as well.

Nevertheless, employers need to stay productive and innovative no matter what happens. The best way to do that is to keep their current workforce highly-trained and flexible. "Joliet Junior College (JJC) is committed to training our district's workforce," says Amy Murphy, director of JJC's Corporate and Community Services division. "We not only offer hundreds of programs to develop worker skills, we continue to add new programs to meet the needs of the future."

One thing is certain; the future will be very different from what it is now. "To be prepared for change, "says Murphy, "employers will need to be flexible and willing to develop their most important asset – employees.

If you would like to discuss ways you can meet the demands of what will be coming over the next few years, contact Amy Murphy at (815) 280-1418, or e-mail amurphy@jjc.edu.

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