We’re surrounded by all kinds of data points about the talent/skill shortage.  I wrote about it here and here.  Today we have two data points:  one comes from SHRM’s Q2 2012 Jobs Outlook Survey Report and the second comes from the BLS 2012 Occupational Outlook Handbook.

SHRM’s Jobs Outlook Survey has some interesting data from a small sample of its 250,000+ members.  (This particular survey was sent to 3,000 randomly selected SHRM members with 336 members responding, for an 11% response rate.)  These quarterly JOS surveys ask HR professionals interesting questions about optimism in job growth, planned changes in total staff levels, categories of workers companies will hire and categories of workers most difficult to hire in the previous quarter.

I was particularly interested in the responses to the question asking which categories of workers were most difficult to hire in the 1^st Quarter of this year.  The sample is small (n=246), so the data are directional at best, but do line up with other data sources.

This data is congruent with BLS (U.S. Bureau of Labor Statistics) data relative to education level attainment and the corresponding unemployment rates in April.  The higher the unemployment rate, the lower the difficulty to hire:

• Less than high school:                                   12.5%
• High school no college:                                  7.9%
• Some college or Associate degree:               7.6%
• Bachelor’s degree or higher:                         4.0%

In other words, it’s more difficult to find skilled professionals and managers in this job market because there are fewer of them unemployed and there are fewer of them overall.  It’s easier to find service workers and unskilled manual workers because more of them are unemployed and there are more of them overall.

But still, as the SHRM report highlights, employers are having difficulty in hiring at all levels.  Which makes me wonder:  are we being unnecessarily restrictive in our job specifications?  Are we hiring people with college degrees when an associate degree would suffice?  Are we requiring associate degrees when a high school degree would be adequate?  I don’t know the answer, but considering the data is interesting.

The Occupation Outlook Handbook, published by the BLS, shows the projected job growth by education category in the 2010-2020 decade:

While the number of jobs created in this decade that will require a Bachelor’s degree or higher is predicted to be nearly 5 million, the number of jobs predicted to be created requiring some college/no degree or less is nearly 13 million.

So if the key to employment (and financial) security for the average worker is a Bachelor’s degree, but the greatest numbers of jobs being created in the next decade won’t require a Bachelor’s degree, how do we reconcile this as employers?

Do we hire college educated workers for jobs that only require a high school diploma?  Are we already doing that now?

Do we work to raise the general level of worker education because we believe it’s the key to global competitiveness?

Do we encourage students to enroll in career and technical education programs in and after high school rather than college because those are the skills needed in the economy?

The data around employers having difficulty finding the talent/skills they need isn’t as simple as it looks.  It’s actually quite challenging.  Under every layer of data is another layer of data.  Solving our talent attraction and acquisition needs won’t be solved with one tactic. But it’s a safe bet that solving our talent challenges will include strengthening relationships between employers and the education infrastructure to produce the skills our economy really needs.

As I look at the data, the optimist in me says we’re covered over in opportunity.  The realist in me says we’ve got a lot of work to do and not a lot of time in which to do it.

There is no irony in data.  Except if you put two graphs side by side that tell the same but different story.

The April employment data was released on Friday by the Bureau of Labor Statistics, which is part of the U.S. Department of Labor, which, of course, is part of the U.S. Federal Government.  The BLS paired these two graphs together.  Chart 1 shows the civilian labor force unemployment rate from April 2010 through April 2012.  Chart 2 shows the growth (or not) of nonfarm payroll employment in the same time frame.

Given this data, it’s a little hard to understand why  the unemployment rate went down .1 point to 8.1% during a month when far fewer jobs were created than in the previous 6 months.

During the slow crawl out of the Recession, many economists and pundits positioned that for the unemployment rate to hold steady month over month, a minimum of 150,000 new jobs would need to be created in that month.  And yet the data show that in a month when only 115,000 new jobs were created and the number of employed people was down 169,000, the unemployment rate still went down.  How does that math work?

Here’s the chart that makes sense of it all direct from the BLS Employment Situation Report:

The civilian labor force actually decreased from March to April by 342,000; the number of employed people decreased 169,000; the number of unemployed people (still looking for work) dropped by 173,000; and the number of people not in the labor force grew by 522,000.  What we can’t tell is how many of the unemployed became discouraged and stopped looking for work.  They drop out of all calculations.

If we do the math, the lower unemployment rates over the last several months are not the result of job growth, but rather a shrinking civilian labor force and a decrease in the labor force participation rate.

While the numbers of the unemployed – that’s people unemployed and actively looking for work – appear to be shrinking, the numbers of people “not in the labor force” is growing.  And growing rapidly – by nearly 3 million in the last year alone.  We can’t tell from this data whether the rapidly growing number of people not in the labor force are Baby Boomers retiring (that wouldn’t be totally unexpected) or more discouraged unemployed people dropping out of the job search.  But it’s a safe bet that it isn’t entirely people – Boomers or otherwise – voluntarily leaving the workforce.

So.  The number of discouraged unemployed workers grows at the same time the number of participants in the labor force is decreasing.  And that results in a lower unemployment rate.  Maybe data is ironic after all.

How’s this scenario?  What happens when the economy and the job market really improve and the discouraged unemployed workers re-enter the job market?  Under this math, the unemployment rate could very well go up.  The more workers are in the workforce — either employed or actively looking for work — the higher the number of jobs we’ll need to create to keep the unemployment percentage even.

Bottom line:  the lowering unemployment rate isn’t about more workers going back to work at all.  It’s about more workers leaving the economy.  Really.

MetLife published its 10^th Annual Study of Employee Benefit Trends on March 19^th, 2012.  At 80 pages, it’s a read.  But it’s a fascinating read.

The report shows clearly that the strong role of workplace benefits in driving employee attraction, retention and productivity continues as reported by these MetLife studies during the last 10 years and persists today during the slow economic recovery.  Interestingly, the study correlates satisfaction with benefits to employee job satisfaction, and also shows clearly that employees who are dissatisfied with their benefits are more likely to want to work somewhere else.

The data are fascinating.  And I recommend the investment of 30 minutes to read it through.

The data point that I found most interesting in the study follows:

I haven’t seen anyone discuss employer loyalty to employees in a long time.  I think I assumed, by looking at other trends, that the issue of employer loyalty was long dead.  Building employee loyalty, however, was a whole other discussion:  we call it employee engagement.  And employers are starting to pay attention to this issue because of the rapid shift in workforce demographics coming down on us like a load of bricks. (See my posts on this topic here and here.)

But where has been the focus on employer engagement? Have we all assumed that employer loyalty is dead and gone forever?  That employees “know the score” and don’t expect employers to be loyal to them?  Well, MetLife reports that between 2008 and 2011 employer loyalty scores have increased 5% from 52% to 59%!  Wait.  What?

In the same time period, however, the perception by employees that their employers are loyal to them has decreased 8% from 40% to 32%.  How pitiful is that?  Employers think they’re doing better, but employees aren’t getting the message.  And in fact, more of them aren’t getting the message as time goes on.

I think this is interesting.  Despite all the attention being paid to employee engagement – through salary, through benefits, through recognition, through providing strong ethical cultures, through providing meaningful and interesting work — in fact, the study finds evidence of a widening disconnect between employers and employees.

Job insecurity and expectations that benefits will be cut may well be contributing to employees feeling less important to their employers.  This “loyalty gap” presents an immediate opportunity for HR and C-Suite leaders to really step up communication and feedback about their increased loyalty.  Of course, the proof is in the pudding, and for employees to believe that their employer is growing more loyal to them, they are going to have to see a change in behavior – if they stick around long enough.

I recently came across a fascinating report published by Lloyd’s, the world’s leading market for specialist insurance.  Lloyd’s Risk Index is based on a survey of global business leaders by the Economist Intelligence Unit (EIU) and Lloyd’s.  It’s the second of its kind, the first having been published in 2009.  The survey is global and breathtaking in its scope.  It measures the top 50 Priority Risk factors for business – as identified by business leaders – as well as measuring how prepared businesses are to face these identified risks.

The headline for this survey is that business has gone from identifying credit as one of the biggest business risks in 2009 to focusing on talent as one of the biggest risks in 2011 and beyond.

As I read the report (see it here), I am struck that in the top 50 individual risks, as many as 12 have to do with people:  talent shortages, impact of regulation, demographic shifts, population growth, industrial/workplace accidents, changing legislation and others.

The respondent profiles are from more than 500 C-Suite executives (although it doesn’t look like CHROs were included) from large global enterprises.  The survey rated their attitudes regarding risk and their preparedness to face risks across five key categories:

• Business and strategic risk
• Economic regulatory and market risk
• Political, crime and security risk
• Environmental and health risk
• Natural hazard risk

As the report explains, anything high on an executive’s risk priority list can be considered in terms of a potential critical point of failure of business.  So we’re talking big risks here.  Identified by board members and C-Suite executives in the largest global businesses in the world.

So of all 50 identified risks, guess what made the number two spot?  Talent and Skills Shortages (Including Succession Risk).  Woah.  Here’s what it looks like:

Talent and Skills Shortages — Priority and Preparedness by Region

The big headline for me is that more than 500 of the business leaders of largest businesses in the world agree that that the talent shortage is real.  That it’s big.  And it’s global.  And it threatens every business.

The second big headline is that this evaluation is being made by business leaders who do not identify themselves as HR Executives.  And that’s big.  If the board members and C-Suite executives of the largest enterprises in the world believe that the second biggest risk to their success is the looming talent shortage, then HR better be prepared with solutions for critical talent acquisition, retention and development.  And they better be prepared today.

If you live in Dallas, Chicago, New York, Miami, Los Angeles or San Francisco I’d like to invite you to attend a complimentary seminar that introduces and discusses groundbreaking new research and analysis about Recognition and Rewards.  Sponsored by the good folks at Achievers, this will be great morning with a little breakfast, a little networking, a couple of HRCI credits — and a whole lot of new data about what’s working to engage employees more effectively.  Join me, Josh Bersin and Razor Suleman.  I guarantee that you’ll leave smarter than when you arrived.  It happens to me every time I’m with Josh and Razor.  It can happen for you too.  Just  send an email to Loren Maisels at Achievers asking for an invitation (Loren@achievers.com) or call her at 415-967-7809.  Tell her I invited you.

In doing some research for a speech I’m giving, I came across The Talent Management and Rewards Imperative for 2012 from Towers Watson and WorldatWork.  It’s chock full of interesting data based on the 2011/2012 Towers Watson North American Talent Management and Rewards Survey and an unpublished Towers Watson 2011 survey of over 10,000 full-time employees in North America on topics such as total rewards, communication and other work-related issues.  Because I’ve been looking at data about the state of the talent pipeline (see Data Points #3, #5, #6), I thought this would be interesting reading.  Little did I know!

A couple of the data points that stood out to me challenge the “conventional wisdom.”  See what you think:

• Only 11% of organizations have trouble retaining employees generally
• Fully 68% of organizations identify high potentials, but only 28% inform those employees who have been identified.
• Organizations underestimate the effect work-related stress and work/life balance have on employee retention, and do not recognized the significance of job security in attracting top talent.

Wait.  What?

It’s the last point that brought me up short.  Look at the chart below.

There are important disconnects between what employees report will attract them into a new job and what employers believe will be important in attracting talent into their organizations.  And if you look at the differing views between employers and high potential performers you’ll be even more surprised.

In all of the writing on this topic that I have seen in the last 18 months, no one else reports the significant importance of job security as part of an organization’s EVP (employee value proposition).  And look how it ranks as #1 for all employees as well as high-potential employees.  #1.

Not meaningful work.  Not alignment with the organization’s mission.  Job security.  Am I the only one surprised by this finding?

Look at the disconnect between the top 5 factors for all employees and employers’ top 5 factors.  Outside of base pay it’s a total mismatch!

On the high-potential performers side, outside of base pay and career development opportunity it’s a total mismatch!

It looks like we’re totally out to lunch when it comes to knowing what’s motivating in terms of EVP and the talent pipeline.  Out. To. Lunch.

In a world that observes the incredible talent acquisition strategies and investments at organizations like Zappos, PepsiCo, Rackspace and AT&T, we’re encouraged to believe that creating cultures of happiness and engagement are what it takes to delight customers and retain employees – high potential or otherwise.  And I chose the organizations because I know the ground-breaking work each is doing in terms of building their talent communities and the engagement of their workforce.  They truly are ground breaking.

It turns out talent attraction may be a bit more mundane than “creating a little weirdness.”

It turns out that some of the basics like job security and base pay still hold huge sway in our workforce.  And I think this is good news.  It gives” regular” employers doing good work and being good to their employees a fighting chance to keep their employees and attract the talent they’ll need going forward.

Basic blocking and tackling.  Basic management competence.  Basic HR.  Can’t get away from them if you want your organization to succeed.

Managers and supervisors (especially in the Baby Boomer cohort) in almost every type and size of business have been known to lament the lack of loyalty and so-called business savvy in the Millennial generation.

• “They want to be promoted too fast!”
• “They don’t want to pay their dues!”
• “They don’t understand how things work!”
• “They want too much flexibility!”
• “When things don’t go their way they quit!”
• “Why won’t they stay?”

The bottom line is that organizations are finding it challenging to keep Millennials engaged and on the payroll.  In fact, with the average employment tenure of workers in the 20-24 year -old age group at 1.5 years (per the BLS), it’s challenging to keep all our employees engaged and the on the payroll.  (See my previous post on the Quits vs. Layoffs gap.  It might not be what you think!)

Achievers and Experience Inc. fielded their annual survey of graduating college students in January.  The data are eye opening.

Despite what we think we know about them, the vast majority of these about-to-enter-the-workforce Milllennials would really like to stay with their next (in most cases, first) employer for 5 years or longer!  Wait.  What?  Look at the chart below:

47% of the 8,000 college graduating respondents in the Achievers/Experience Inc. survey indicated that they expected to stay with their next employer five years or longer.  Note the language:  expect to stay not would like to stay!  That means when they join our organizations they have every expectation of making a career with us.  They’re not just accepting a job.  They’ve evaluated our EVP (Employer Value Proposition) as a match for the meaning they want to create in their lives through their work.  (Interesting to note that the biggest percentage of respondents expect to stay with their employer for 10+ years!)

So, OK.  This has got to be their youthful exuberance and relative inexperience speaking, right?  Well, I wonder if that really matters.

Employers need these Millennials.  Employers need these Millennials now.  Employers will need these Millennials more every day.  (See my recent post here.)

And employers need them to stay a whole lot longer than 1.5 years!

So what happens between “I expect to stay with my employer for 10 or more years…” and “…after one year with the organization I’m leaving for a better opportunity”?  I think we all know that answer to that question.

We don’t live up to the EVP we sold them.  We don’t engage Millennials the way they tell us they want to be engaged.  Instead, we…

• make sure they fit into our existing career paths and job descriptions
• focus on making sure they “pay their dues” – the way we did
• keep our processes and rules rigid and unbending – and only pretend to listen when they offer up “different” ways of working
• resist the notion that work can be done with excellence anywhere but in a cubicle
• make it difficult for Millennials to interact with senior leaders
• make it difficult for Millennials to collaborate with colleagues
• designate social responsibility activities a perk instead of a foundational value
• try to “lure” them to stay with tenure-based plaques and timepieces

These data are a wake-up call for employers.  It’s a message from our talent pipeline that they really do want to engage with us; they believe our employer brand marketing messages; they want to learn and grow with us.

It’s time to listen harder and make sure our employer brand messages aren’t experienced as bait and switch tactics.

I don’t know about you, but I’d hate for the Millennials to have such negative employment experiences at the beginning of their careers that they opt out of organizational life altogether before they’re 30.  We’d really be in a pickle then!

SHRM’s research group works tirelessly to bring relevant, actionable trend and survey information to its members.  And if you aren’t a member (why aren’t you?), the value of SHRM’s research services alone is more than the cost of membership. *

Workplace Visions is part of SHRM’s Workplace Trends and Forecasting program and is published multiple times each year – as new data become available.  The reports are useful signposts for new developments that impact organizations, talent management and HR professionals.

The first such report published this year is “Changes to Retirement Benefits:  What HR Professionals Need to Know in 2012” (member protected).  It’s full of useful observations about changes coming to 401(k) plan rules, Social Security changes to keep an eye on and great data from EBRI (The Employee Benefits Research Institute).

One of the discussion points piqued my interest:  data from EBRI about the reduction in confidence by Baby Boomers that they will have enough money in their retirement years to live comfortably.  See the chart below.  This has big potential impact for employers.

The aha! is that while a steady stream of Americans still plan to retire in their early to mid-60s, many more workers are unsure when they’ll be able to retire – or if they’ll be able to retire.  As you can see from the chart, in 2007 70% of EBRI survey respondents reported some level of confidence in their retirement plans.  That number fell to 49% in 2011.  SHRM also cites data from Towers Watson surveys with similar outcomes.

What does this mean for talent management professionals?  Well, SHRM thinks that providing a stronger hand in retirement planning and financial education for Baby Boomers will help reduce retirement-related anxiety.  I absolutely agree.

Additionally, though, SHRM counsels HR professionals to “weigh the positives and negatives of employing an older workforce.”   They counsel that “older workers are often costlier to keep on board, due to higher salaries and health benefits costs.” Woah.  The  thought that employers will have robust options besides Baby Boomers and other older workers to staff their organizations isn’t supported by the demographic trends.

My take is a little different.  Here’s what the data say:

• the U.S. population is growing more slowly leading a more slowly growing civilian work force (http://bls.gov/news.release/pdf/ecopro.pdf),
• the Baby Boom generation moves entirely into the 55-years-old+ age group by 2020 and will represent 25.2% of the work force (up from 13.1% in 2000)
• the “prime-age” labor cohort (ages 25-54) is projected to drop to 63.7% (from 71.1% in 2000) of the work force

So the engagement, development and retention of Baby Boomers and other older workers will be a very critical part of most organizations’ talent strategies because they’ll make up 25% of the available work force.  Providing incentives to stay, financial education for pro-active retirement planning and unique engagement strategies — among others — will all be part of talent strategy in 2020.  There won’t be any weighing the positives and negatives of employing an older workforce.  But there will be significant effort spent in figuring out how to keep the Baby Boomers’ skills, talents,and  organizational knowledge in play in the work force — and in our organizations.

At 25% of the available workforce, there won’t be other options.  We won’t be able to succeed without Baby Boomers.

*Full Disclosure:  I am SHRM’s former Chief Operating Officer

The U.S. Department of Labor/Bureau of Labor Statistics is a gold mine of information.  It crunches massive amounts of data having to do with labor and the economy, and is prolific in providing projections for the future.  (See previous posts here and here.)

An interesting monthly publication put out by the BLS is the Monthly Labor Review.  The January edition included an Overview of projections to 2020 based on its Employment Outlook 2010-2020.  The overview contains a review of the underlying data behind all of the BLS’s projections.  Labor force participation by demographic, the connection between GDP and productivity, job growth by sector/industry, job growth by occupation, job growth by education level – all are included in this overview.

What I found most interesting was a graph and brief discussion comparing the most recent recession and the resulting time to labor market recovery to the previous four recessions.  Take a look at the graph.

We all know that the effects of the 2007-2009 recession are still being felt.  In fact, the graph shows that we are a long way from reaching “recovery to level at start of recession” — some 30 months out from the official end of the recession.  No surprise, but perhaps the combination of the length of the recovery together with the continued gap between where we are and the “recovery to level at start of recession” is noteworthy.  Also of note:  this overview reports that the BLS sets the “natural rate of unemployment” at 5.2%.  We’re still a long way from the recovery to level at start of recession rate — and a much longer way from the natural rate some 40 months from the official start of the recession.

The real question is, why is this recovery taking so long compared to the previous recoveries shown in the graph?  Labor market analysts discuss the cyclical vs. structural causes that continue to depress hiring and job creation.  Cyclical unemployment occurs when workers are laid off because of weak demand, but who expect to be re-hired when demand picks up – usually by the same organization, and usually in the same occupation or industry.

Structural changes in the economy also create job loss – our most recent recession proved that unequivocally.  Structural unemployment could also be caused by weak demand, but is fundamentally caused by other dynamics that impede workers’ abilities to return to work when demand picks up.  For example, new technology and resulting productivity gains may reduce the need to rehire workers with less current skills and may reduce the number of workers needed even after recovery.   As time goes on, the skills deficit of the structurally unemployed gets bigger and so they may well experience longer periods of unemployment.  Retraining in new occupations will be required for these workers in many cases.  Sound familiar?

As HR and talent management professionals take into account the impact of both cyclical and structural unemployment in their locations and industries, their approach to creating a robust talent pipeline will be far more realistic and attainable if they focus on causes of structural unemployment.  Just as employers are having difficulty finding the skills they need, the structurally unemployed are having difficulty finding new homes for their outdated skills.

Surely the answer is obvious to more than me.

A great example of this came to my attention yesterday.  On Monday AT&T announced an investment of $250,000,000 over the next five years to improve high school graduation rates.  Here’s how their announcement began:  “ As access to skilled workers becomes increasingly vital to the U.S. economy, AT&T is launching a quarter-billion-dollar campaign to help more students graduate from high school ready for careers and college, and to ensure the country is better prepared to meet global competition.”

Investing in JAG – Jobs for America’s Graduates – is an example of strategic corporate investment in the future of the talent pipeline.  JAG, the most effective program of its kind – is a state-based national non-profit organization dedicated to preventing dropouts among young people who are most at-risk.  In more than three decades of operation, JAG has delivered consistent, compelling results – helping nearly three-quarters of a million young people stay in school through graduation, pursue post-secondary education and secure quality entry-level jobs leading to career advancement opportunities.  The kids in the AT&T Aspire video are great examples of JAG at work in the trenches.

Who wouldn’t hire those kids?

I ended my Data Point Tuesday post yesterday with this imperative:  “The sooner talent acquisition professionals and learning/development professionals in organizations begin to work together on workforce planning and tackling the education deficit, the sooner the talent pipeline will begin to be prepared for 46 million new jobs.”

Looks like AT&T is out in front.  Again!