The Herman Trend Alert|
March 22, 2006
Shortage of Skilled Labor Spreading
We have focused quite a bit of attention on the growing shortage of qualified workers in the United States. Based on our interpretation of data from the Bureau of Labor Statistics, we anticipated a shortage of 10 Million skilled labor by 2010. We presented our case in our book, “Impending Crisis: Too Many Jobs, Too Few People.” While there have been some challenges to our forecast, many others now use our projections. Whether the actual shortfall will be 8, 10, or 14 Million, it is clear that employers find it increasingly difficult to hire and retain the people they need.
In 2004, in our “Red Alert Paper,” we reported that the employment market was shifting from a buyer’s market to a seller’s market. Now, employee turnover is increasing even faster, as talented employees seek better job opportunities. The phenomenon is not limited to the United States or North America. We see these conditions developing at an alarming pace in developed---and some developing---countries around the world. This global shortage of skilled workers---educated and trained to perform the work of today and tomorrow---will affect everyone.
Recent reports tell us that leading Japanese companies have begun preparing to hire next year's graduates. Their intention to recruit large numbers of new graduates is a radical change from their restrained hiring in recent years. The employment market in that country is now characterized as a “seller’s market” by the Japanese media. Hiring plans announced by employers include Toshiba’s plans to hire 1,570 new graduates, marking the first time in 13 years the electronics manufacturer has taken on more than 1,000 new graduates at once. Honda expects to hire 1,120 new graduates, its first mass recruitment in 16 years. Financial institutions also intend to employ many recent graduates. Mizuho Financial Group, Inc. plans to hire 2,350, while Sumitomo Mitsui Banking Corp. plans to hire about 1,100.
The employment situation in once-stable Japan is complicated by the tendency of more than 30 percent of young workers hired after graduation quitting within three years. The trends we have highlighted are increasingly global in perspective.
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