Updated: May 29, 2019
Before you answer, understand that the stakes have never been higher.
The US economy officially doesn’t have enough workers. For over 12 consecutive months now, the number of open jobs each month has been higher than the number of people looking for work — the first time that’s happened since the Department of Labor began started tracking these measures. And each month, that gap is growing.
In 2008, there were 40 applicants for every open position in the US. At the end of the first quarter of 2019, there were 0.9 applicants for every open position. Why?
Between 2011 to 2030, 10,000 Baby Boomers reach retirement age per day. Larger proportions of Boomers are working well past retirement age but soon they will begin vacating jobs en masse and taking all of their experience and knowledge with them.
For years, employers were concerned about the shortage of applicants for STEM (Science, Technology, Engineering and Mathematics) related jobs. However, more and more working-class Baby Boomers are vacating jobs like truck drivers, skilled trades, production and machine workers, home health care aides, restaurant workers, and hotel staff. However, most millennials (Generation Y) and Generation Z workers are going to college and seeking professional jobs, so these vacancies are going unfilled. Add to that a growing opioid epidemic linked to a 20 percent decrease in men’s workforce participation and 25 percent decrease in participation in women. Knowledge-intensive industries like financial services will also require a high volume of skilled workers and competition for qualified candidates will soar. According to Korn Ferry International, by 2030, the global talent shortage could reach 85.2 million people—costing companies 8.5 trillion dollars in lost economic opportunity.
As a result, American businesses will be forced to confront some hard realities:
For possibly the first time, low-skilled workers may have the most near-term leverage in the current labor market – from an employee standpoint, it’s a buyers’ market.
Employers are going to have to pay more for people in order to win the war for talent, encourage more Americans into the workforce and keep the employees they have.
Employers will feel pinched as labor costs increase and costs for goods and services increase due to tariffs and trade concerns.
Most job applicants will have what Dan calls a “skinny resume,” meaning most available workers will lack the skills and experience necessary to be productive forcing organizations to “build” versus “buy” talent.
Ensuring the right hire for the right job has never been more important in our history. Many will turn to psychological assessments to add rigor and success, yet only a handful of assessments, such as The Predictive Index, are validated for selection.
Once hired, organizations must be designed properly and led by effective leaders and managers in order to optimize the talent they have.
Employee engagement will become vital in order to retain your best talent in an economy growing desperate for good people.
These market conditions are why many of my clients are now leveraging The Predictive Index’s behavioral assessment, job assessment and cognitive assessment to ensure the best fit for all applicants and make the best use of all who apply. For example, once my clients understand the needs for each position within their company, then they are able to leverage the science and technology of The Predictive Index software platform to find the best fit for all applicants regardless of the position they actually apply for. They are also able to use the same analytics to ensure current employees are in roles, career paths and succession plans where they fit the best. In addition, the management and performance reporting tools enable faster development and personal growth - getting employees up to speed in record time. Combine that with investments in supervisory, management and leadership development and many clients are achieving results they never thought possible.
While the next ten years will be challenging, it is exciting that psychometrics tools such as PI will equip a growing number of organizations with the powerful science and technology of a validated psychometric tool. They will need such a tool to face these talent challenges, deliver great job design, successfully hire and inspire employees to achieve great things. Yes, Dan, these really are the good old days.