Slouching Towards a Labor Shortage, Part 2

Author’s note: One of the things I enjoy most about writing for ER Exchange is not just seeing my name in cyber-print (although it is ego reinforcing), but the feedback I receive from readers. That includes not only those who respond favorably, but those who disagree or feel that I missed key or critical points. It also includes those who recommend ignored topics or complain about overdone issues. I sometimes disagree with those comments, and I am sometimes disappointed that “the point” was missed (by my omission or the reader’s), but the inputs are never ignored. We are all victims of the fact that we are only issued one brain, and that brain is all too often limited by our own failings, prejudices, experiences, emotional or visceral knee-jerk responses, or time constraints on personal and professional development. But we are compensated with two eyes and two ears, a hint from the creator of the relative value between observing and listening as opposed to talking ó four input devices versus one output device. So if you have ever been tempted to respond, favorably or negatively, to an author’s article, do so. It makes a difference. But I digress. Now, back to Part 2. Snap decisions based on partial information, when presented with a predetermined bias, are okay if all you want to do is become a future executive. But if you seek to be accurate and make decisions that truly have impact and not merely respond after the fact, then more careful review, research, and dispassionate observation for the purpose of discovery are essential and required. Trend analysis is not for those who suffer from short sightedness or seek “microwave” solutions to “slow bake” problems. It is a careful review of trends and not merely the consideration of all things based on the situation du jour or the core beliefs of the boss of the hour. To many in HR/staffing today, discussing or even exhibiting concern over a pending labor shortage during the current recession is not unlike worrying about a potential famine during a feast. Others assume that this is a non-issue due to the retreat of so many professional jobs offshore, as if that represents an unalterable law of physics akin to gravity. To those who think in terms of the obvious, and not the underlying issues the obvious obscures, I offer the following examples:

  • Glacier awareness. During the ice age, the glaciers spread from their current narrow confines to cover most of the northern hemisphere. During the unusually long winters, the glaciers progress could be measured in miles. However, during the short periods of relative warmth each year, they would recede a fraction of the distance gained. Thus one could say on a bright, sunny day in 12,000 B.C., “See, the ice is receding!” But if that person did not move away from the face of the glacier before the colder seasons returned ó well, keeping food frozen would be the least of their worries. “Inevitable” is not a measure of the time required for an end result to occur, nor is it a guarantee of a constant measured progression toward that outcome. It is merely a statement of that outcome’s eventual transition from “pending” to “arrived.” The current recession is not evidence of a labor shortage reversal. At 3% unemployment in the 1990s, companies scrambled and doubled salaries to meet, barely, staffing goals. At 6% unemployment, many companies feel a false sense of security as pertains to talent acquisition. Can we truly feel secure in the labor pool’s ability to meet future staffing needs with only a three-point separation between feast and famine? As we say in New England, “The glaciers haven’t disappeared; they’ve just gone back to get more rocks.”
  • Titanic syndrome. Many of the passengers on the Titanic refused to believe in the possibility that they were in peril. The repeated frantic warnings by the crew actually served to placate many into disbelief, “See, they said we were sinking twenty minutes ago, fifteen minutes ago, ten minutes ago, and then five minutes after that, and yet here we are still afloat! The crew is just panicking.” Many of these disbelievers clung to this form of self-denial right up to the 200-fathom mark. The extended period of warning is not an indication that the warning is inaccurate, nor should repeated warnings serve to dilute the sense of urgency to respond. It could merely prove that that the warning is timely. Its repetition should not serve to lessen the message, but rather as a reminder that the lifeboats are filling up while you are still dressing for dinner.
  • The disappearing/reappearing auto industry. During the latter part of the ’70s and early part of the ’80s, the predictions flew that the exodus of American consumers from American-built cars to foreign-built cars would spell the doom of American automotive manufacturing forever. Good-bye autoworkers! Well, 25 years later, the big three are still going strong, and many of the automotive jobs in Europe and Asia have relocated back to the U.S., including many of those jobs making “foreign cars” in the U.S. for American consumption. Is the auto industry the same as it was in the 1950s? No. But do we watch black and white TV, listen to 45s on mono-portable record players, draft teenagers into the Army, or have rotary dial phones? Not all change is bad, it is merely inevitable. You either predict and profit from change, or you watch it march by clinging to the way things used to be and thinking in the frame of reference of the past. The trick is not to make the common error of looking at a symptom and proclaiming it a disease. A fever is a symptom of the flu, not the illness itself. In other words, problems are usually multilayered and interactive. Single source assumptions accompanied by similar solutions are inevitability wrong and always counterproductive.

Agreed, there is always the chance that the predictors of doom and disaster are either flat-out wrong or overstate the consequences of their dire prognostications. Consider, then, what the consequences of a predicted pending disaster are realistically, even if not totally accurately. The question needs to be asked, “Is it realistic to assume that a partial labor shortage will only pose a partial problem for your business partners to achieve their business plan?” For example, should you feel vindicated if you ignored the predictions you would lose all your money in the stock market, in the end only losing 50%? Was your rejection of the prediction truly modified by your ability to say, “See, I told you I wouldn’t lose all my money!” The further erosion of jobs from the American market begs the question: Are they only leaving due to cost issues? Or are other factors such as the shortage of qualified, stable and readily obtained talented labor additional factors contributing to the overall trend? Is the offshore movement of jobs the “fever” or the “flu”? After all, salary is not the only factor of a cost factor. So, my premise remains. We are suffering from a growing labor shortage, temporarily obscured by a recession and offshore job loss. In trying to understand and deal with issues involving HR/staffing, we often suffer from the age-old problem of seeing ourselves as unique and suffering from consequences not to be found in the daily activities and operations of our business partners. After all, we deal exclusively with people, and people present issues not to be found in the non-people functions of business. This is true, to a point. But that does not mean that there does not also exist a sufficient quantity of similarities in our shared efforts to not attempt to gain insight by looking at the labor issue through the eyes of others. It requires being willing to put aside our tendency to use humanistic terms and phrases and be willing to first consider the situation and potential solutions dispassionately. In this instance, I refer to purchasing, our business partners involved in the non-human acquisition process. Purchasing has a mission not unlike that chartered to HR/staffing:

  • They must have established supply chains to provide the timely delivery of the traditional finished or raw materials needed to support the production function.
  • They must constantly investigate alternative supply methods based on the volatility of existing suppliers and forces of the market.
  • They must conduct long-range planning to insure that changes in the company’s need for different materials based on product changes are investigated and in place before needed to ensure an uninterrupted flow of materials as the company alters or changes product lines or services.
  • They must have alternative resource planning in place to deal with changes in the cost of supplying the business based on changes in material cost or availability, as one always interacts with the other.
  • They must interact with the supply chain at both an immediate and strategic level to ensure suppliers have the feedback needed to improve their ability to meet their customer’s immediate and strategic needs.

To accomplish the above mission, purchasing is traditionally involved in all short-term and long-term product planning meetings. That includes the first meeting where someone in product development/marketing says, “I have an idea for a new product.” It is not possible to predict product cost, and therefore profitability or delivery time, without resolving the following:

  • Does the material exist in sufficient quantities to support the effort?
  • Will the cost of acquiring the materials impact the ultimate cost of delivery and planned profit of the effort?
  • Will the supply chain deliver the material in the needed quantities in the time required to meet production goals?
  • Do alternative materials exist that will meet the demand in a more cost effective and more timely delivery schedule provided product development/marketing and production are willing to look at alternative design considerations? (Does the widget have to be stainless steel, or will stainless steel-plated suffice with design modifications?)
  • The security of supply chain is equally as critical. It is here today, but will it still be here in the future when we are committed to that supply? And who else will be vying for the abundant or limited material?

If the premise of a potential labor shortage is one worth considering, then the solution exists in looking at it in much the same way our business partners in purchasing have learned to deal with their supply issues for decades, outside the actual purchase order (read: job requisition). That includes:

  • Inclusion
  • Predicting
  • Planning
  • Influencing

That is where we will pick up in my next article. Meanwhile, consider the following: Over the last fours weeks the economic forecast has dragged itself slowly and reluctantly to a more favorable outlook. Nothing to celebrate yet, but better than the slow downward trend or standstill of the last 12 quarters. The unemployment rate dipped to 5.75%. Not a big deal, unless you consider the fact that one-twelfth of the safety margin between “feast and famine” disappeared in less than three weeks. Maybe it is not indicative, or maybe it is. But either way, HR/staffing and purchasing both have planning to do, just in case someone asks for a left-handed monkey wrench, engraved, and nobody knows where to find one, who makes them, or a decent alternative. Have a great day purch… er, I mean, recruiting.

Ken Gaffey (kengaffey@comcast.net) is currently an employee of CPS Personal Services (www.cps.ca.gov) and has been involved in the Department of Homeland Security, Transportation Security Administration project since its inception. Prior to this National Security project Ken was an independent human resources and staffing consultant with an extensive career of diversified human resources and staffing experience in the high-tech, financial services, manufacturing, and pharmaceutical industries. His past clients include Hewlett Packard, First Data Corporation, Fidelity Investments, Fleet Bank, Rational Software, Ericsson, Astra Pharmaceutical, G&D Engineering, and other national and international industry leaders. In addition to contributing articles and book reviews to publications like ERE, Monster.com, AIRS, HR Today, and the International Recruiters Newsletter, Ken is a speaker at national and international conferences, training seminars, and other staffing industry events. Ken is a Boston native and has lived in the greater Boston area most of his life. Ken attended the University of South Carolina and was an officer in the United States Marine Corps.

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