The Changing Nature of the Workforce

1. The Changing Natureof the Workforce Jay J. Jamrog Executive Director, Human Resource Institute Distinguished Lecturer, The University of Tampa Jamrog@HRInstitute.info 727.345.2226 HRI

2. The World’s Population will double in the next 40 years • The greatest fertility will be found in those countries least able to support their existing population • In contrast to the developing world, many industrialized countries will see fertility rates below replacement level and hence significant declines in population • As a result, in 10 years or so, the workforce in Japan and much of Europe will shrink by 1% per year. By the 2030s, it will contract by 1.5% annually

3. Labor Shortage • The long-term labor shortage continues to be a threat – 6.2 million-person shortage in U.S. by 2008, 40 million by 2015 (assuming 2% economic growth and current retirement conditions). • By 2015 there will be a 15% decline in 35-44 yr. olds, while demand increases 25%. • 43% of the U.S. civilian labor force eligible to retire in next decade.

4. The growth of the information industries is creating a knowledge-dependent global society • Information is the primary commodity of more and more industries • By 2005, 83% of American management personnel will be knowledge workers, Europe and Japan are not far behind • Computer competence will approach 100% in U.S. urban areas by 2005. Cities in Europe and Japan will achieve universal computer literacy shortly thereafter

5. Skill level of the workforce in a growing worry • The half-life of an engineer’s knowledge today is only five years. In electronics, fully half of what a student learns as a freshman is obsolete by his or her senior year. • Rapid changes in the job market and work-related technologies will necessitate increased training for virtually every worker. • In the next 10 years, close to 10 million jobs will open up for professionals, executives, and technicians in the highly skilled service occupations.

6. Executives’ Greatest Business Challenges Source: Select Appointments North America

7. “Currently, most students who graduate high school are qualified to enter the workforce.” • Agree 20% • Disagree or strongly disagree 61% • Large organizations (1,000+) 57% • Small & medium organizations 63% Source: SHRM School-to-Work Programs Survey, 2002 2002 SHRM survey of HR professionals

8. Skill Level of Three Workforce Categories Source: International Adult Literacy Survey

9. 1927 1965 1984 2002 1946 Actual Number of Births per Year in the U.S. Millions Baby Bust 66.0 mil 1965 to 1983 2003 - 20 to 38 2013 - 30 to 48 Depression 45.4 mil 1927 to 1945 2003 - 58 to 76 2013 - 68 to 86 Baby Boom 75.5 mil 1946 to 1964 2003 - 39 to 57 2013 - 49 to 67 Baby Boomlet 74.6 mil 1984 to 2002 2003 - 1 to 19 2013 - 11 to 29 HRI Source: U.S. Bureau of the Census

10. Generational Markers • Depression Generation • Great Depression • Electrification • World War II • Cold War • Baby Boom • Generation • Civil Rights • War on Poverty • Race to Space • Assassinations • Vietnam • Impeachment • Baby Bust Generation • AIDS • Video Games • Homelessness • Berlin Wall • The Web • Baby Boomlet Generation • Poverty • The Environment • Violence • Terrorism • Technology HRI

11. Lifestyle Characteristics Depression 1927-1945 Baby Boom 1946-1964 Baby Bust 1965-1983 Baby Boomlet 1984-2002 Work hard, Save money, What is play? I like it , It’s O.K. I care about religion Exercise is one option Buy a decent house Work hard, Play hard, Worry about money Should I really like it? Will others? Religion is a hobby Exercise is a duty Buy the most house you can Work hard if it doesn’t interfere with play, Save money I like it, I don’t care what you think What is religion? Exercise for mental health Reclaim the inner city Good grades, Make others pay Save money Who are you anyway? You’re old. Will I get an “A” in religion? What’s your second sport? I like living with my parents HRI

12. Social Values Depression 1927-1945 Baby Boom 1946-1964 Baby Bust 1965-1983 Baby Boomlet 1984-2002 Support United Way Red Cross Peace Corps Community activities/ Rotary You must vote Family first Quality first, buy American I’m forced to support United Way Battered women’s and homeless shelter Rotary is a bore Vote if you want Family and friends Prestige first foreign is better United Way isn’t green Habitat for Humanity What is Rotary and who cares? You must vote My friends and my family Cheap: value added ??? Greenpeace Beachsweep neighborhood cleanup ??? ??? Get it at the Gap HRI

13. Workplace Characteristics Depression 1927-1945 Baby Boom 1946-1964 Baby Bust 1965-1983 Baby Boomlet 1984-2002 Principles/satisfaction Lifestyle first No need to lead Loyal to skills Don’t care what others think Work best alone Technically savvy Care about mission Individual first Want to win ??? Lifestyle first ??? ??? Don’t care what others think Work best alone Technically sophisticated Must have mission Individual first Want to win Money/principles Mixed Manage (lead/follow) Mixed Care deeply about what others think Want others to work with them Technically challenged Lip service to mission Mixed Want to win Strong work ethic Hoe to end of row Manage Loyal to employer Independent but conventional Work well with others Technically savvy Follow the leader Strong chain of command Want to win HRI

14. Workers of different generations blend as they work together; age is not a major factor at work Source:HRI, 2001 Changing Workforce Survey

15. Retirement $ Int’l Opp. Mgmt. Out of School Perception of Quality of Life Over Time Baby Boomer View HRI

16. Perception of Quality of Life Over Time Baby Bust View Death Layoff # jobs Grad School Free Time Out of School HRI

17. Environment Experience by Most Young People • Increased cultural awareness • Dual income/career parents • Technology as a toy • Corporate Restructuring HRI

18. Increased Cultural Awareness Environment Experience by Most Young People • Dual income/career parents • Technology as a toy • Corporate Restructuring HRI

19. Growing acceptance of cultural diversity is promoting the growth of a truly integrated global society. • Within the U.S. and Europe, regional differences, attitudes, incomes, and lifestyles are blurring as business carries people from one area to another • Intermarriage also continues to mix cultures geographically, ethnically, socially, and economically • Minorities are beginning to exert more influence over national agendas as the growing number of minorities in the U.S. is mirrored by the expanding population of refugees and former “guest workers” throughout Europe

20. Percent of Baby-Boom and Baby-Bust Generations by Race/Ethnicity Baby Boom Baby Bust HRI Source: U.S. Bureau of the Census

21. Minorities in Top Management Minorities 22% Minorities 2% White 98% White 78% While minorities make up almost 22 percent of the U.S. workforce... ... they represent only 2 percent at Fortune 2000 firms. HRI Source: Federal Glass Ceiling Initiative

22. Women in Top Management 46% of the U.S. Labor Force 48% of Managerial/Professional Specialty Positions 10% of Corporate Officers 9.5% of Board Directors 2.4% of Highest Titles 1.9% of Top Earners Two Fortune 500 CEO Source: Catalyst’s Census of Women Corporate Officers and Top Performers HRI

23. Dual income/career parents Environment Experience by Most Young People • Increased cultural awareness • Technology as a toy • Corporate Restructuring HRI

24. Two-income couples are becoming the norm • In 75% of U.S. households, both partners will work full time by the year 2005, up from 63% in 1992 • In Europe today, dual-income households outnumber single-income households by about two to one. Countries in northern Europe tend to have a higher percentage of dual-income households than those in southern Europe • Growing numbers of grandparents are raising their grandchildren. Among the poor, grandparents also provide live-in day care for the children of single mothers.

25. Labor Force Participation Rates of Married Women HRI Source: U.S. Census Bureau

26. Married Mothers, with Childrenin the Labor Force HRI Source: Catalyst, New York, NY

27. Percent of Children by Number of Parents in Household 1970 2000 HRI Source: U.S. Bureau of the Census

28. ParentAdultChild Parent Adult Child HRI

29. Disconnect • People don’t leave companies they leave supervisors ”Most companies lose good employees because of poor management, according to a new McKinsey Report. Skilled employee will not tolerate bad supervisors.”July 26, 2000 • Many have strategies in place to strengthen the supervisor/employee connection. BUT: • How many look to design alternatives for good employees to leave a supervisor without leaving the company? • How many have developed and implemented programs that measure and reward supervisor for this competency?

30. Disconnect • Impact of networks, talent shortage and increased loyalty to professions caused many strategies to increase communication around talent management … “talking to ‘em before talking about them” • Yet given the criticality of the relationship between supervisor and employee -- how often do we talk to the employee before assigning a new boss? Even just to check for personality conflicts? • Yet the downsizing trend has caused the supervisors span of control to increase … “I do not have enough time to manage by walking around”

31. Technology as a toy Environment Experience by Most Young People • Increased cultural awareness • Dual income/career parents • Corporate Restructuring HRI

32. The pace of technological change keeps accelerating • As late as the 1940s, the product cycle (idea, invention, innovation, imitation) stretched to 30 or 40 years. Today, it seldom lasts 30 to 40 weeks. • Eighty percent of the scientists, engineer, and doctors who ever lived are alive today – and exchanging ideas in real time on the internet. • All the technical knowledge we work with today will represent only 1% of the knowledge that will be available in 2050.

33. Workers expect their employers to enable them to stay abreast of current technology and maintain their skills Source:HRI, 2001 Changing Workforce Survey

34. Remote Distant Impersonal One size fits all I’m not important Need for affiliation Personal attention Recognize individual differences Customized response I’m important More “Hi Tech” - More “Hi Touch” Hi Tech Hi Touch HRI

35. Corporate Restructuring Environment Experience by Most Young People • Increased cultural awareness • Dual career parents/latch key • Technology as a toy HRI

36. Institutions are undergoing restructuring and consolidation • By 2005, 20 major automakers will hold market shares ranging from 18% (GM) to 1% (BMW). By 2010, there will be only five giant automobile firms. • By 2005, just three major corporations will make up the computer hardware industry. • Where local regulations allow, mergers and acquisitions are an international game. The continuing removal of trade barriers among EU nations will keep this trend active for at least the next decade.

37. Loyalty and Commitment is Vanishing • Tardiness is increasing; sick-leave abuse is common. • Job security and high pay are not the motivators they once were. • Young people watched their parents remain loyal to their employers, only to be downsized and out of work. • Fifty-five percent of the top executives interviewed say that erosion of the loyalty and commitment will have a major negative effect on corporate performance in the future.

38. Do you have a strategy in place or under development that is designed to improve the loyalty and commitment? Source: HRI, 2001 Loyalty and Commitment Survey

39. How important are the following strategies for attracting and retaining a loyal and committed workforce? Source: HRI, 2001 Loyalty and Commitment Survey

40. Key Issues Related toRetention and Motivation Job Content • Increase marketable skills • Desire to contribute valuable work • Require task variety to avoid boredom Quality of Co-workers • Value intellectual stimulation • Anticipate team environment Salary • Match rising cost of living HRI

41. Key Issues Related toRetention and Motivation Career Growth • Do not believe in “paying dues” • Want transferability of experience Work/Life Balance • Refuse to be workaholics like parents • “work to live” not “live to work” HRI

42. Self-doubt and Distractions Lots of stress, no fun Minimal anticipation, some dread Distrust and a negative environment Insufficient recognition and rewards Insufficient sense of contribution Boredom and repetition Fears about economy, layoffs, no mobility Concerns about management competence Huge concerns about workload Self-esteem An enjoyable work experience A job to look forward to every day Great people to work with Consistent recognition and fair rewards Results employees can create/contribute to Challenge, variety and stretch Promising future No concerns about management Few concerns about workload Disconnect The Current Picture What Employees Want HRI Source: Towers Perrin, 2003

43. STRATEGY • Fundamentally, learn your own demographics – understand the dynamics of your knowledge supply chain and their implications • Create a strategic-level process for identifying the most critical knowledge gaps you will face – business units, functions, levels • Develop tactics for knowledge acquisition, sharing, retention, and application against those specific knowledge gaps • Develop a “leadership culture” – leaders as mentors, coaches, and teachers – to promote continuous learning

44. STRATEGY Compete harder in the same game – be the best in the war for talent Chronic talent shortages and intense talent wars – great news for individuals, bad news for organizations Significantly increased salary and benefits cost structures that engender real differences across age groups Dramatically increased investments in talent development at all levels and functions

45. STRATEGY Change the rules Older workers stay longer Younger workers enter earlier Immigrant restrictions relaxed, despite national security concerns

46. STRATEGY Job elimination/work redesign Job redesign – “rescaling” the organization to work just as effectively with fewer employees Stepped-up global outsourcing of critical processes

47. STRATEGY Change the educational system Corporate intervention in the K-20 system Corporations assume greater in-house responsibility for education Reemergence of “guilds” and apprenticeships – either replacing unions or radically redefining them

48. STRATEGY Utilize technology even more intensely across the organization and at employee level A fundamental rethinking of product/service design and support – many more “knowledge embedded” products and services to reduce need for support Accelerated acquisition and use of KM technologies & processes to develop employees but also to work more effectively with fewer

49. HRI Human Resource Institute At The University of Tampa www.HRInstitute.info