Articles & Resources
From the Snake Pit to the Holy Grail:
Building Tomorrow’s Workforce in Today’s Economy
By Dr. David DeLong
When I asked the CEO of a regional hospital how things were going recently, he replied, “Except for a pending flu pandemic, the worst recession in history, the uncertainty around health care reform, and the State just cut our Medicaid reimbursement, things are fine. I mean how many crises can you deal with at once?”
Before the current economic downturn, leaders had been talking for several years about the skill shortages posed by looming baby boomer retirements, challenges of retaining restless mid-career employees, and the difficulties of recruiting and retaining those frustrating young Gen-Ys. Those conversations have now largely gone away, but the problems underlying them have not. Most leaders in knowledge intensive sectors, like healthcare, utilities, energy, and government are still facing critical shortages of doctors, nurse managers, engineers, IT project managers, nuclear scientists, and welders. In fact, the workforce changes that were beginning to get executive attention a couple of years ago are coming back with a vengeance once the short term distractions of the current recession begin to recede.
Many executives today must feel like Indiana Jones, who has made a career out of overcoming countless obstacles, while pursuing great treasures. For leaders gaining that elusive prize means rebuilding a workforce and leadership team capable of launching their organization into a growth mode as the economy recovers. But, as the intrepid Indiana Jones has shown, you can only reach this longer term objective after navigating the snake pit of budget cuts, layoffs, and shrinking revenues caused by the recent recession. Here are three things you should be doing today to preempt the major workforce changes that will become much more serious as the threats of the current economic downturn recede.
1. Go for the Gold Without Getting “Snake Bit”. Many firms have lost sight of the investments they must make today in workforce and leadership development to be competitive in the years ahead. Like Indiana Jones, the challenge is balancing the distractions of today’s snake pit against your long term quest for a high performing workforce in the post-recession economy. Despite the tremendous deterioration of most retirement portfolios, many baby boomers with hard-to-replace skills will still begin retiring in the next few years. This trend, combined with recent layoffs and the much smaller cohort of Gen-Xers (age 29-44) that follows, means many firms will be caught short of critical talent needed to drive their business. To mitigate the impact of skill shortages, you must confront the competing demands of short term cost containment and longer term investments in future workforce capabilities.
This may mean letting some underperforming staff go in order to invest in more high potential talent essential for implementing your strategy in the future. Or it may mean taking short term hits on profitability by carrying excess staff too expensive to replace when business improves. For example, Toyota has tried to do this by reassigning 4,400 workers from two closed U.S. truck plants to training in quality, safety and productivity, instead of laying them off. Toyota recognizes that the costs of laying off and later replacing these skilled workers when car sales pick up are considerably greater than the short term cost savings from letting workers go. In this case, Toyota management is holding its conflicting needs in tension, while seeking a more creative solution.
2. Gen-Ys: Can’t Live With’em & You Won’t Survive Without’em. Like many Baby Boomers, Indiana Jones has worked with Gen-Ys over the years, and he hasn’t always been happy about it. While the job-hopping style of Gen-Ys (under age 29) may have temporarily abated in your firm, don’t assume these staffers are a lock to stick around when the job market picks up. To increase the chances they’ll stay, be sure they can picture the organization’s future. Has leadership clearly communicated its strategy for leading your company out of the recession? And what is the role your younger employees will play in that? Cisco, for example, is passionate about focusing it’s employees on the firm’s overall business strategy and continually clarifying each individual’s role in how they are contributing to the company’s growth. High potential Gen-Ys need to understand where they fit in your organization today and in the future.
3. Take Steps Now to Leverage Skilled Older Workers Before Demand Heats Up. Last year, at age 64, even Harrison Ford returned for one more sequel as Indiana Jones. This recession has given new meaning to the words, “Some people just won’t quit.” Aging boomers present a paradox for organizations today. The rate of retirements has slowed, as older workers stay on to retain benefits and to rebuild their retirement portfolios. I call this phenomenon “piling up at the door.”
Not only are boomers staying longer, but their willingness to share their valuable expertise may be declining because knowledge is their meal ticket. The problem is that leaders now also need to be concerned that their highly-skilled professionals and managers will all leave at once when the economic picture gets brighter. There are at least two things you should be doing today to avoid this mass exodus of critical capabilities.
Become Even More Passionate About Flexibility. Most aging boomers will now have to work well into their sixties to support themselves in what is likely to be a lengthy retirement. But my research shows that motivation and the drive to work changes significantly in the sixties – regardless of rational economic need. To retain your most valuable older workers, you must be prepared to offer them flexible (e.g. part time) work options if they are going to stay, once the economy recovers. If you don’t make that offer available, then somebody else will, and they’ll be gone!
Re-Connect With Former Employees Today Because You May Need Them Tomorrow. More aging boomers are interested in returning to work because their retirement savings have been devastated. You may not be able to use them today, but why not start building your network of retirees and other former employees to see who might be a good candidate for returning on a part-time or project basis in the future when business picks up?
Economists continue to speculate how the recent economic downturn will ultimately reshape the economy. They lament all the jobs in finance, housing, and retail that are not coming back. But, in many cases, the recession is simply distracting us from the underlying trends that are making critical skills shortages worse every quarter. Indiana Jones knows that, even though the snake pit may have all your attention at the moment, it’s the holy grail that really counts. And for leaders that means building the sustainable workforce you will need to drive your organization in the future. Are you keeping an eye on what really matters?
David W. DeLong is president of David DeLong & Associates, Inc, a firm specializing in workforce development, knowledge transfer, and change management solutions that improve business performance. He is also a research fellow at the MIT AgeLab and an adjunct professor at Babson College. For more information please call us at (978) 369-5083 or contact us.