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Soapbox: Job Meltdown or Talent Crunch?
January 18, 2010
By Edward E. Gordon
During 2010, many economists expect U.S. unemployment to reach 10.5 percent. At least 15 million workers will be jobless.
In spite of this deep economic crisis, Manpower's 2009 talent shortage survey reported that 30 percent of the world's employers are still facing a talent showdown. It seems hard to believe these businesses can't find appropriately skilled people to fill their jobs, yet 1 to 3 million U.S. jobs have been vacant for more than six months. America is experiencing a talent shortage in the midst of a labor glut.
Despite these counterintuitive findings, U.S. business still largely ignores this information and two decades of similar reports containing red-flag alerts of an impending talent crunch.
As we begin 2010, the world's labor markets remain out of sync with global technological realities. Yet a job/career culture persists that is based more on fantasy than present economic reality. Simply stated: There is an escalating mismatch worldwide between individuals' skills and employer job needs. Once the economic recovery begins, global businesses will face an unprecedented crisis in recruiting and retaining talented people.
In my books, "The 2010 Meltdown" and "Winning the Global Talent Showdown," I discuss the forces behind this employment mismatch and efforts underway across the globe to find talent solutions. My analysis encompasses workforce conditions in the United States and in many nations in Asia, Europe, Canada, and South America.
One fact is crystal clear. We are in the midst of a major global talent revolution. The world has entered one of the most remarkable eras of labor market change in history. This is the dawn of a new "Cyber-Mental Age" of ultra-high technology. Throughout the next decade, its effects on jobs and careers will be unrelenting. Why?
Three powerful socioeconomic forces are driving the global talent showdown: technology, demographics, and globalization.
1. Technology
• New technology products and services introduced in the next 10 years may equal in number those that appeared during the last 50 years.
• Workplace hyper-tech will eliminate even more low-skill jobs.
• By 2020, 75 percent of U.S. jobs will require a liberal arts/career-prep high school education, plus a postsecondary career education (two- or four-year degrees, apprenticeships, or occupational certificates).
2. Demographics
United States
• 79 million Baby Boomers will retire with only 40 million Generation Xers in line to replace them.
•While the U.S. birthrate remains at the replacement level, the worker pool ages 25 to 46 will shrink dramatically.
• Work-life balance expectations between the Boomers and Generations X and Y will need to be bridged.
Global
• Many national birthrates will fall below replacement. Workforces will shrink dramatically as Boomers retire. Some sample annual population declines include:
Germany: 100,000
Italy: 100,000
Russia: 700,000
Japan: 50,000
Korea: 50,000
• China's population will begin to decline in 2015 as a result of its one-child policy. By 2050, China will have more people age 65 and older than the rest of the world combined.
3. Globalization
• From 2000 to 2009, the U.S. outsourced 6 million low-skill jobs.
• China cut 20 million low-skill jobs as it moved up the high-tech manufacturing chain.
• China graduates 600,000 engineers each year, but only 60,000 meet world-class standards. India produces 400,000 engineers annually, but only 100,000 meet international norms. Both countries lack adequate accreditation standards for higher education institutions. Local village schools provide a primitive education for most children.
• Skilled foreigners employed in the U.S. and other developed nations are returning to their native countries, causing a reverse brain drain. Rising wages in China have motivated 200,000 skilled Chinese to return home.
• The Japanese call it the "flight from science." Too few Japanese are preparing for science, technology, engineering, or math-related (STEM) careers. Japanese businesses are experiencing major problems filling jobs in these areas.
• Germany also suffers from the same decline in entry-level STEM workers. In 2008, 75,000 engineering positions were vacant across the country.
Education-to-employment systems all over the world are seriously outmoded. The inescapable truth is that a pool of qualified talent falls significantly short of meeting worldwide demands of a Cyber-Mental Age.
For the last 20 years, U.S. businesses used H-1B visas as a talent safety valve to fill significant numbers of skilled jobs. Those days are largely over.
Not enough workers in the U.S. and elsewhere are equipped for today's pace of technological changes in which jobs come and go, and skills quickly can become obsolete. This means the U.S. labor-market preparation system must equip more Americans with the general and career technical skills for a Cyber-Mental Age. None of this comes cheap, and much of it takes years to reach fruition.
Before a chronic job meltdown becomes a true economic catastrophe, the U.S. needs to reinvent its talent creation system. Fortunately, cutting-edge efforts already are underway across the U.S. and the world. These "Gateways to the Future" are innovative partnerships formed by community-based organizations (CBOs) and non-governmental organizations (NGOs) in which local businesses, labor unions, workforce boards, governments, schools, parents, training organizations, community activists, and others are collaborating in the transformation of local education-to-employment systems. Fargo, ND; Mansfield, OH; Santa Ana, CA; and Danville, IL, as well as Denmark and Singapore, have just a few of these pioneering efforts. Looking down the road to 2020, I believe we can build on the best of these new ideas to ensure the jobs pipeline once again flows freely across the U.S. and the world's economy. "Winning the Global Talent Showdown" presents a realistic policy primer to frame an energetic national debate on a new talent creation and worker retraining system. It paves the way for action at the local/state/national levels for a decade of better job opportunities for more Americans.
"I've a feeling we're not in Kansas any more," said Dorothy after a tornado dropped her, her house, and her dog in the land of Oz. The world of the last three decades is gone. The next decade of major technology breakthroughs can be one of "more and better" if we better motivate students and encourage incumbent workers to pursue appropriate career education and lifelong learning so more people can compete and win in this Cyber-Mental Age.
After the recent financial bubble broke, Queen Elizabeth of England asked, "Why did no one see this coming?" The answer is some of us did. But no one listened.
We need to reward high-tech innovation in services and production rather than financial manipulation and speculation. Perhaps this time we all will listen and begin taking the steps to win the global talent showdown.
Edward E. Gordon is president of Imperial Consulting Corporation. His new book is "Winning the Global Talent Showdown: How Businesses and Communities Can Partner to Rebuild the Jobs Pipeline." He can be contacted at www.imperialcorp.com.
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