Gazing into a crystal ball does not always paint such a clear picture. But where the workforce is concerned, demographics can certainly provide some significant clues to what the future holds.
The workforce of the 2030s is being born now. Those who are in middle and high school will move into jobs in the next few years. And trends in both age groups point to a long-term decline in workers. In Europe, for instance, demographers have noted that the birthrate is in a full-blown recession, down 3.5 percent between 2008 and 2011, according to Eurostat.
While population shifts may not fully impact the workforce for years, some trends are now starting to be felt.
“The changing legal and statutory responsibilities and requirements of being an employer would keep me up at night,” said Bruce Steinberg, an independent economic and employment expert. “Another challenge would be how to grow my business without growing the employee count, since good employees will increasingly become difficult to recruit and retain.”
So what does the future hold for workers — and their managers? A look at some of the coming shifts:
This is an area in which the numbers don’t lie. “The plain and simple fact is that the current demographic profile of the age group that is entering the workforce for the first time (16- to 24-year-olds) is flat or on a downward trend,” Steinberg said. “There simply are fewer of them due to the decline in the U.S. birthrate in the late 1980s and early 1990s and historic improvements in high school completion rates in the 1990s and 2000s.”
As if the sheer numbers weren’t enough, add in the fact that the younger generation is more inclined to head to college after high school. “That has made a real dearth of individuals that want to go into the service industry, be that retail or manufacturing,” said Shira Harrington, a career consultant and founder/president of Purposeful Hire Inc. “All of these industries are in a real crunch when it comes to a labor shortage. There just aren’t enough people that want to do that kind of work.”
With the lack of native-born workers willing to perform service industry jobs, many employers must look to immigrants. Harrington said that is a cycle that is somewhat repeating itself. “My grandfather was part of a whole generation that was happy to have a job. No job was looked down on. It was all noble and worthy.”
Immigrants possess some of those same characteristics, she said. “Not everyone, of course, but the immigrant population really reflects a lot of what the traditionalists felt from back in the day. They came from a lack of provisions and it led to a similar mindset: ‘I’m happy to have a job.’”
Of course, relying on immigrants can create management challenges that come with cultural differences and potential language barriers — not to mention the legal issues that can come along with undocumented workers.
In some ways, it will be an employee’s market and “retention, which always has been a major challenge to service sector employers, will continue to intensify as more opportunities arise,” said Steinberg, who publishes his analysis on his website, www.SteinbergEmploymentResearch.com. “In a way, the growing number of opportunities is the flipside of the declining demographic trend. When there are fewer workers to fill open jobs, there are more open jobs. To retain workers, employers need to be creative in coming up with recruitment and retention programs. Just hanging out a ‘We’re Hiring’ sign won’t cut it any longer.”
Both recruiting and keeping the workforce of the future — particularly millennials — will mean employers need to tap into what is important to them. “Even though the J.O.B. may not be ideal, what the employer can do is create an engaging culture,” Harrington said. “You want to create an environment where people feel like they are at home, a culture of camaraderie, of being appreciative of your staff.”
She recommends little perks and ways of saying thank you. “When people feel appreciated, they’re often able to perform better,” she said. “It’s especially important in customer-focused careers. If they feel appreciated, they are more likely to treat the customers better. And they are less likely to think about the work itself and focus more on the people they work with and the environment in which they work.”
Steinberg noted that entry-level workers often can be swayed by the number of assigned work hours, supervisory experience and flexible schedule. Beyond that, “employers who are able to clearly communicate and demonstrate the benefits of the jobs they are providing will be able to attract suitable candidates. And benefits go way beyond salary and any other statutory-required benefits. Employers must figure out what employees really value, which can be more than money, and communicate how they can provide those non-monetary benefits.”
There is another demographic trend that could create opportunities for employers: baby boomers. As many of them reach retirement age — but don’t necessarily want to golf or work crossword puzzles — there is an opportunity to recruit them.
“There are boomers who would be open to something like that because of underemployment, or perhaps they don’t want the classic desk job anymore,” Harrington said. She recommends visiting a local career center — called OneStops in many states. “If they go there to post jobs or go to job fairs, they can make known to the counselor that they are looking for boomers who don’t need a glamorous job and just want to stay active.”
The national push to create a “living wage” could have a tremendous impact on the workforce of the future — regardless of the age of the employee. As some cities — notably Seattle — have set this as the minimum wage, it has had an immediate effect, not all of it positive.
“There is an accepted line of thinking that there are really no labor shortages that a wage increase won’t solve,” Steinberg said. “Think about it: If fast food restaurants started to offer $35 an hour, would they have any trouble recruiting and retaining workers? Of course not, but that wage is not reasonable for its business model.”
He anticipates that the costs of the service could rise to the point where customers are no longer willing to pay for it, or employers will be forced to automate more.
All of these pressures may create more freelance or temporary workers. And the responsibility will fall to leaders to manage better. “If they were managing employees and directing them what to do, they may need approach the business from the other direction,” Steinberg said. “Instead of managing employees, they may need to manage the work.”
Steinberg cited the example of a small business owner with an in-house bookkeeper who handles the payroll. “If the small business owner cannot recruit or retain a bookkeeper, then processing the company payroll can be handled on a project basis by an outside service, or possibly even a part-time bookkeeper provided by an outside company.”
That may require a “paradigm shift” in the way business owners manage their businesses, Steinberg said. “Managing contractors and subcontractors successfully requires a different skill set than managing one’s own employees.”
Whether all these trends come together or whether society and businesses create an alternative future, one thing is certain. The small business owner will certainly need to anticipate changes to overcome whatever the future holds.