Academic journal article Journal of Organizational Culture, Communications and Conflict

Coping with the Impending Labor Shortage

Academic journal article Journal of Organizational Culture, Communications and Conflict

Coping with the Impending Labor Shortage

Article excerpt


Organizations are faced with the real possibility of a coming labor shortage. Today's HR manager will be an integral part of coping with the effects of this shortage and finding solutions through various avenues. Presented are discussions of the impending problems and possible HR solutions generated through productivity improvement and recruitment and retention efforts specifically targeted at women, minorities, retirees and immigrants.


Add this to an HR manager's "to do list": Must attract, screen, and hire an adequate number of employees to compensate for the mass exodus of baby boomers--those born between 1946 and 1964--from America's workforce. This HR manager has read that "by the year 2008, one in six workers will be 55 or older" ("U.S. Unprepared ...", 2001). In addition, this HR manager has heard that 76 million employees will be retiring over the next thirty years with only 46 million Generation Xers--those born between 1964 and 1980--entering the workforce during this time (Eisenburg, 2002). Apparently, there is a coming massive shortage of employees.

According to U.S. Census Bureau projections, "The U.S. will face dramatic demographic changes over the next 100 years" (Little & Triest, 2002). Changes that will create major adjustments in the U.S. labor markets are: the slowdown in population growth, population aging, and the growing role of immigrants. The slowdown in population growth is reflected in the projected yearly U.S. labor force rate of 0.7% between 2000 and 2025 compared to the 1.1% rate of the 1990s ("U.S. Unprepared..., 2001). Population aging is a result of the lower fertility rate of baby boomers, an increase in life expectancy, and the large numbers of baby boomers who are nearing retirement age. Finally, ten percent of the U.S. population growth in the late 1990s was due to foreign-born babies, causing the Census Bureau's population growth projections to swell (Little & Triest, 2002).

For the last three decades, U.S. corporations have been able to shape the abundant labor force to their needs. Labor markets have channeled employees to the most promising industries and companies. As the baby boomers age and the labor crunch hits, employees will wield more power, pressuring organizations to make adjustments in order to appeal to the shrinking labor supply. These adjustments may well change the attitudes of the American workplace and society. Some experts feel that the aging of the baby boomers will become the "transcendent economic and political issue of the century" (Brown, 2002).

If the U.S. does not successfully cope with the downward change in the labor supply, economic growth may slow, taxing support systems to their limits as millions of baby boomers retire and take advantage of those support systems. For example, almost half of the Federal Government's workers (1.8 million) will be eligible for retirement within the next five years (Eisenberg, 2002). Will all of these federal workers retire, adding to the burden on the support system or will some opt to continue to work until Peter Drucker's predicted retirement age of 75 (Garnitz, 2002)?

As older workers retire, they take with them knowledge, expertise, and a myriad of favorable traits such as reliability, loyalty, and conscientiousness. A U.S. General Accounting Office report warned that if American employers are not prepared for the impending shortage of skilled labor, productivity and growth will be threatened ("U.S. Unprepared..., 2001). Losing trained, knowledgeable workers affects organizational performance. Experienced managers and professionals will retire, leading to a decrease in innovation and efficiency, a rise in costly errors due to an inexperienced workforce, and a loss of knowledge and experience which may affect decision-making and undermine growth strategies. The labor market will be "hungriest" at the high end of the scale. …

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