2008 Employment forecast
By Jim Schaffer
January 2008
After returning to work following a relaxed, enjoyable Holiday season, it came as a bit of a shock to the system to once again focus on reports of the myriad of problems in our national economy and in our industry.
Yes, there are problems in the economy, but it seems that the media will pick up on virtually anything they consider newsworthy and report on it from the most negative of perspectives.
Of course we are facing a number of uncertainties for the immediate future and it's obvious that there are challenges each of us must meet in our businesses, but are things truly as bad as they would have us believe?
Our national GDP continues to expand, albeit at a slower rate, our own home improvement industry is overall quite healthy, and the U.S. continues to be the most prosperous nation on earth. So, beware the cries of doom and gloom! We certainly need to understand the dynamics in play in the market at this time, but just as importantly, we need to evaluate with great objectivity the impact that they may have on our businesses over the long term.
More specifically to my point of focus today, there are certain realities in the employment economy that remain relatively unchanged in the face of current events, and there are others that will change. To be successful in the future, it is critical that we understand which are which and what we must do to take capitalize on them.
As industry professionals, we certainly need to recognize the immediate impact on sales and profits resulting from the downturn in the housing market, the softer retail climate, and the increase in oil prices, but we must resist any urge to overreact. We often joke about the CEO who responded to declining sales trends by cutting expenses in his two largest controllable accounts, sales payroll and advertising, his two primary areas for generating sales growth. Well, there are a number of other areas, often more subtle than this example, where reducing operating costs may have a similar deleterious effect.
In this context, let me direct your attention to the human resource management equation that is integral to your success. This is one of those areas where we must be most progressive in 2008, even in the face of the economic pressures cited. Why? As noted to you before, job creation in the U.S non-farm employment economy continues to grow monthly despite all of the challenges mentioned above. The newly released employment figures for December show that even though the unemployment rate moved up to 5.0%, payroll employment increased by another 11,000 jobs. And that's the important number, because in the marketplace where companies compete for available talent, it's job creation that counts. And if you're keeping score, that's 49 months in a row with a net increase, with over 3.6 million new jobs added to the U.S. economy in 2006 and 2007 alone.
So what does this mean to us as employers? As overall population growth rates in the U.S. have been stagnant for years while jobs are being added to the workforce, the supply-demand equation for qualified talent will continue to shift unfavorably.
Simply stated, there will be more and more jobs available than there will be qualified individuals to fill them. Thus, even in light of the economic challenges we are facing as we enter 2008, it's time to be even more strategic and prudent in the planning and execution of our H.R. strategies. And to emphasize this point and to document that my views are not isolated, I want to share with you the Workplace/Workforce Forecast for 2008 from one of the leading human resource futurist groups in the country, the Herman Group. If you have read any of their works in the past, such as Impending Crisis: Too Many Jobs, Too Few People, you will recognize that the Herman Group is typically right on target with their forecasts and predictions. Take a look about what they have to say about 2008:
1. Recruitment in a Tightening Labor Market Even the coming economic slowdown will not completely stop the creation of jobs. Moreover, stimulated by job creation and the fact that skilled workers in many occupations are in short supply, the time it will take to fill job openings will also continue to increase as will the costs.
2. More Employers Turning to Recruitment Process Outsourcing (RPO) In an effort to reduce costs, more large employers will turn to third party resources and others will step in to provide a wide variety of recruitment services on an outsourced or insourced basis, including providing customized services for clients, based on specific needs.
3. Retention in the Face of Increasing Choices for Employees Recent studies reflect that employee turnover is accelerating. With increasing choices we will see more attrition, especially from the ranks of long-term employees. Wise employers will conduct "stay interviews" and provide re-orientation to their seasoned employees. More employers will begin to be aware of the value of contingent employees and address the issues of retaining them.
4. More Employers will Focus on Metrics Following the lead of large employers, more medium-size employers will embrace technology to manage the employee life-cycle and operate more efficiently. This increased efficiency will drive more profit to the bottom line.
5. Leadership Deficit Becomes More Apparent As companies experience the re-careering of Baby Boomer executives, they will become more aware of the lack of qualified supervisors and managers to move up into higher positions. The organizations' previous lack of training for would-be leaders is to blame.
6. Lack of Succession Preparation Organizations will become more acutely aware of their lack of succession preparation. They have simply not invested in leadership training so that their supervisors, managers, and executives are not ready to move into the positions.
7. More Employers Accommodate Older Workers to Maintain Intellectual Capital The drive to retain older workers will cause companies to work harder to accommodate the wants and needs of older workers. AARP will support employers' drives to hold onto these valuable employees. More employers will embrace flexibility in all aspects of work to adapt to the wants and needs of their retirement-age associates.
8. More Awareness of the Link between Economic- and Workforce Development Workforce development issues move to top-of-mind for communities, as they become more aware of the workforce imperative---that business and industry will only locate where there are the skilled workers to fill their open positions. This awareness will lead organizations to focus more on middle- and high-school students to begin to expose them early to the careers available in their communities.
From "The Herman Trend Alert," Dec. 12, 2007 by Roger Herman and Joyce Gioia, Strategic Business Futurists. (800) 227-3566 or http://www.hermangroup.com. The Herman Trend Alert is a trademark of The Herman Group, Inc."
So what do you think? How do these points of perspective align with the realities in your company? The time to plan for the future is now! Please let me know if we at Schaffer Associates can help you with your human resource strategies or assist you in any other way.
