WHY CEOs AND HR EXECUTIVES NEED A NEW WORKFORCE STRATEGY
Dychtwald, Ken, Erickson, Tamara J., Morison, Robert, Aging Today
Has anyone in American business not heard about the aging of the workforce? Business leaders are told regularly that they should be preparing for the coming shortage of new workers. Yet, as Ken Dychtwald, Tamara J. Erickson and Robert Morison state in their new book, Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent (Cambridge, Mass.: Harvard University Press, 2006), "Few large organizations are really preparing for this transformation of the workforce. While marketers are starting to target an older population of consumers, managers are still encouraging mature employees to retire early. Big mistake." In the following adaptation from Workforce Crisis, printed here by permission of the authors and the publisher, Dychtwald and his colleagues provide an overview of strategies for corporate management.
As we explore the changing workforce, remember that the problems are bigger than we imagine. We've never had such an older age mix in the workforce or a generation as large as the boomers preparing to retire. The growth rate of the labor force has never dropped so precipitously or stayed so low before. We've never before relied so heavily on intellectual rather than physical labor. We simply cannot anticipate all of the additive effects of these trends.
At the macro level, we cannot avoid skills and worker shortages entirely, but these shortages are inevitable only for organizations that fail to anticipate workforce changes and adjust in time. Since these changes are largely predictable and imminent, organizational leaders must start planning now. The worst sin is doing nothing. The good news is that our research indicates the management techniques needed to accommodate tomorrow's workforce mix can be applied now to improve business performance, cost structures and employee retention. By overhauling employment practices now, thereby distinguishing yourself in the labor market and ensuring your own talent supply, your company can lessen, or avoid altogether, the inevitable disruptions of workforce change.
WHO OWNS THE CHALLENGES?
Who owns this issue? Who is responsible for an organization's talent supply? Two people primarily: the CEO and the head of human resources (HR). As the integration point of an enterprise and the person responsible for its overall performance and sustainability, the CEO sets the organization's direction and goals and then makes sure that the organization has the business model, processes and assets-including capital, facilities, technology and people-to meet those goals. Depending on business conditions, the CEO may focus on different resources, for example, by securing cash flow and capital in recessions or updating technology and production facilities during expansions. We believe that over the next five years the CEO must address these people issues and talent supply.
Some CEOs make human resources a top priority, but most don't. General Electric is renowned for its investment in developing the performance and potential of its top layers of managementand insisting that these managers do the same in their parts of the business. The result is a cascade of attention to talentespecially the high performer-and the assignments and challenges that will stretch their capabilities. Beyond leadership development and succession, CEOs today should monitor the changing demographic composition of their workforces and recruiting pools. They should understand the overall flow and bottlenecks of talent throughout their organizations, as well as how the corporate brand attracts or repels employees and prospects alike. Most fundamentally, CEOs should insist on a coherent, forward-looking workforce strategy that maintains the talent supply during turbulence and shortage. …