The Myth of a Talent Shortage

Jul 31, 2008
This article is part of a series called News & Trends.

We have been bombarded for a decade with news reports, articles, stories, and books about the looming talent shortage about to overwhelm our industries, businesses, and economies.

Taken at face value and looking at traditional work styles and jobs, there is some validity to these stories. Human resources people, recruiters, and some business people will affirm the shortage anecdotally. But it’s hard to find real examples and real numbers.

Certainly, anyone trying to hire a surgeon in North Dakota, a Starbucks barista in Oklahoma, or a stock broker in Alaska may have to look long and hard. But if you are looking for these folks in urban areas or places with significant populations, the number of qualified applicants increases substantially.

After all, it has never been easy to attract skilled professionals to rural areas, and it has become even more difficult as people leave the country for large cities. Rural parts of the world are emptying into cities — especially those located in coastal areas or those with significant educational and cultural activities.

Richard Florida’s books on the Creative Class point out in stark numbers and colorful graphs and charts the shifts in population away from some less desirable (and often semi-rural) cities and toward others that offer the lifestyle and engaging employment desired by the emerging creative class.

Sure, thousands of baby boomers are poised to retire over the next decade or two and, yes, there are somewhat fewer young folks behind them; but is that really going to be a problem? And will the number of boomers who choose to retire reach the predicted numbers?

Studies I have seen indicate that boomers will most likely defer retirement for some time because they have not saved enough to make retirement possible or because they remain healthy and want to continue working.

We will most likely also need fewer people to reach the same productivity levels of today.

The nature of work has changed dramatically. Today only about 2% of Americans grow food or work on farms. This is truly amazing considering the amount of food produced and exported. Farms have grown much larger and are more automated. Completely automated, GPS-guided tractors cultivate fields that used to take a dozen men and several dozen horses to plow.

I was recently at a copper mine in Chile where GPS-guided ore trucks will soon obsolete the need for drivers. The widespread adoption of the Internet and its associated applications has simplified many work processes and will continue to reduce the number of people needed in many areas of the economy.

Manufacturing, too, has moved to automation or outsourcing. It was the 20th century’s economic backbone and required a huge supply of raw manpower. For the most part, workers needed to be equipped with little more than a high school education and a willingness to do hard physical labor.

But today only about 11% of workers remain employed in manufacturing and those workers are more skilled and experienced than at any other time in our history. Automation and outsourcing have replaced thousands of semiskilled jobs and the need for raw manpower has reached very close to zero.

So it is unlikely that there is any broad-based shortage of traditional talent or any need for drastic measures. Any shortages that may exist can be attributed to geographical location, the nature of the work, and the pay scale.

I am a believer that when the time is right, the solution appears. If organizations were really feeling the pain of shortages, they would have started training programs, raised wages, and lobbied educational institutions to change curricula. None of those things have happened on a wide scale.

And many of the solutions are expensive and socially or politically inconvenient. For example, as it becomes more and more difficult to find people willing to work for relatively low wages, retail stores are reducing the number of sales associates. They have installed systems that let customers do their own check out. And, without much additional trouble, they could install scanners that would use bar codes to bring up information about a product and answer customer’s questions. I think it is likely that we will see a “black box” retail establishment at some point, but no one would accept it today.

There are hundreds of other areas where automation could reduce the need for or replace humans if the costs were justifiable and it was socially acceptable.

Business has a responsibility to ensure its supply chain of talent and has gradually been putting programs into place to do this. Over the past decade there has been increased interest in internal leadership development programs, internships, and similar development activities. Companies are investing in diversity programs, training, college recruiting, and retention activities to ensure the supply chain.

The challenge for government is to find ways to partner with business to retrain and re-skill thousands of people who are no longer needed in traditional occupations. Educational systems from high school to university are not meeting the needs of our economy and make false promises to students by implying that they will be employable after graduation.

Recruiters know that neither a high school diploma nor a college degree is enough to ensure a job offer. Most occupations require extensive training and take years to master, but we have not built bridges between education and work.

For most people, figuring out how to get a job with no experience is the most significant challenge they face. This should force organizations to build bridges, which could be internships, short-term work assignments, part-time work, apprenticeships, and so forth. This means we need to lobby for changes in human resource policies and for changes in employment laws that limit their ability to build these bridges.

Our current employment system is based on the assumptions that workers need protection, are victims, are not able to work or make decisions for themselves. We need to wake up to the fact that the workers we need and want to hire are making choices every day about who to work for and why. They are opting for employers that provide training, ongoing development, personal growth opportunities, and flexibility.

The concept of a talent shortage is based on projections that assume tomorrow will look like today. It is also largely based on a mindset that arose out the manufacturing era when masses of unskilled, compliant labor was needed.

We now need fewer, but highly skilled, creative and independent people to propel us forward. This is the real talent shortage we face.

This article is part of a series called News & Trends.