Agenda Research findings: From Not Enough Jobs to Not Enough Workers Business implications Q&A Gad Levanon Director of Macroeconomic Research The Conference Board Mark B. Ward Vice President and General Manager EdAssist 2 #SAWlive
What does the coming labor shortage from retiring baby boomers mean for your company? https://www.conference-board.org/laborshortages 3 #SAWlive
Key Findings In mature economies, working-age population is declining Many mature economies are likely to experience both sluggish economic growth and tight labor markets in next 15 years Most thought leaders do not sufficiently emphasize what a significant effect the impending workforce crunch could have on corporate profits 4 #SAWlive
Key Findings While the overall trend for mature economies is to experience growing tightness in their labor markets, labor shortages will vary by country and occupation The Conference Board created index to measure labor shortages risk for 464 occupations and 266 industries in the U.S. 5 #SAWlive
Aging Baby Boomer Generation Greatest age 84+ 5M Silent age 66-83 31.8M 32% of U.S. Population Boomers age 48-65 74.9M Xers age 31-47 65.1M Millenials age 18-30 55.4M Source: Pew Research, Five Generation, February, 2010 6 #SAWlive
The growth rate of the U.S. population aged 18 to 64 is rapidly decelerating and will remain very low through 2030 Source: The Census Bureau 7 #SAWlive
The U.S. is rapidly approaching its natural rate of unemployment. Expected to be there within a year Phase 1 Note: Shaded areas represent recessions. Sources: Congressional Budget Office, The Conference Board 8 #SAWlive
Future occupational labor shortage index for selected major occupations Phase 1 Source: The Conference Board 9 #SAWlive
Most occupations with high risk of labor shortages are projected to either experience fast employment growth or few new entrants to replace those who leave Phase 1 10 #SAWlive
Most health related occupations are projected to experience fast employment growth 11 #SAWlive
In some STEM-heavy industries, employment is expected to grow slowly or not at all Phase 1 STEM-heavy industries are highlighted in blue. Source: Bureau of Labor Statistics 12 #SAWlive
Increased immigration can be a solution to future labor shortages in the U.S. However, the percentage of immigrants or naturalized citizens varies significantly by occupation Phase 1 Source: American Community Survey 13 #SAWlive
Current labor market tightness varies significantly across the U.S. Some states are already experiencing tight labor markets, while others still have unemployment rates higher than the natural rate Phase 1 14 #SAWlive
We are experiencing a unique decline in working-age population in mature economies Phase 1 Source: The Conference Board, OAEC 15 #SAWlive
When will the natural rate of unemployment be reached? Phase 1 Source: The Conference Board 16 #SAWlive
Late 1990s: strong growth but a decline in corporate profits because of a tight labor market Phase 1 Note: Shaded areas represent recessions. Source: Bureau of Economic Analysis 17 #SAWlive
Major Implications for Businesses 1. Harder to find qualified workers 2. Lost knowledge due to retirement 3. Lower retention rates 4. Faster compensation growth 5. Squeeze on corporate profits as labor costs and quits rise 6. Pressure to increase hours worked and productivity from existing workers 7. Increase recruitment intensity 8. Training and internal worker mobility 9. Provide incentives for older workers to stay in the work force 10. Intensify the movement of operations to less costly areas 11. Pass the cost to the consumers 12. Production will grow more slowly due to the labor supply constraints 18 #SAWlive
How can Talent Management and Learning teams help? 1. Harder to find qualified workers 2. Lost knowledge due to retirement 3. Lower retention rates 4. Faster compensation growth 5. Squeeze on corporate profits as labor costs and quits rise 6. Pressure to increase hours worked and productivity from existing workers 7. Increase recruitment intensity 8. Training and internal worker mobility 9. Provide incentives for older workers to stay in the work force 10. Intensify the movement of operations to less costly areas 11. Pass the cost to the consumers 12. Production will grow more slowly due to the labor supply constraints 19 #SAWlive
Baby Boomer Retirement Knowledge Transfer Mentor Programs Modify and market benefits to appeal to the changing needs of baby boomers Flex tuition assistance program (focused on various interests vs. specific skills) 20 #SAWlive
Qualified Workers, Training and Mobility Proactively identify high-index labor shortages and future skills gaps Educate senior management and bring a solution to the table today Internal Learning Publicize need for this skill internally and encourage employees to think about this as an area of career development Develop internal training in those areas
Tuition Assistance Customize and Incentivize your tuition assistance program: Higher tuition caps for degrees in skills shortage areas Explore Certifications: Faster education with power to negotiate discounts Arm your Internal Career Development & Academic Advisors: Communicate skills gaps to your front-line team directly communicating with employees Target Graduates: Focus your attention of those graduating in the next 6-12 month with in-demand skills. Celebrate their accomplishment! Be patient: Remember the time lag for degrees and do what you can to help employees finish degrees faster Partner with schools: Reputable education institutions can deliver the in-demand skills you need. Consider developing cohort program or customized learning. Measure impact: Track those employees completing internal training and educational programs in skills-shortage areas and measure their retention in the future Look into the future: In 2014, we identified these areas as future skills shortages for XYZ company. Here are the steps we took to address that and here are the successes we have measured to date
Questions & Answers Gad Levanon Director of Macroeconomic Research The Conference Board Mark B. Ward Vice President and General Manager EdAssist 23 #SAWlive
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