This Week's Herman Trend Alert

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  Press Release
For Immediate Release
Contact: Roger Herman

Confusing Workforce Numbers

Human Resource executives--and their bosses--are bombarded by numbers these days. They know there is a shortage of skilled labor; they experience the difficulty filling critical jobs. They know that employee turnover is increasing; they're facing the challenge--watching people leave. They're reading the exit interview reports. Current activity by organizations like challenge the credibility of what some say is today's reality.

How serious is this problem, really? And what should employers do about it? No one wants to be an alarmist, but no one wants to be caught unprepared either. Alert leaders are watching their external environment, while keeping a finger on the pulse of what's happening in their own organizations. Some feel the numbers may be inflated, so they tend not to invest a lot of resources in recruitment and retention.

Is there a labor shortage?

The wake-up call came with the publication of "Impending Crisis: Too Many Jobs, Too Few People" by workforce futurists Roger Herman, Joyce Gioia, and Tom Olivo. This book, which has appeared on the Business Best Seller Lists a number of times, interpreted employment data from the Bureau of Labor Statistics. The authors forecasted a shortage of 10,033,000 skilled workers by 2010, now just five years away. They warned that the impact would sneak up on unwary employers, creating a labor crisis. Without sufficient qualified people to get things done, companies unable to serve customers would lose revenue and collapse under their own weight.

Numerous surveys have been conducted in an attempt to determine how deep the shortfall really is. Results of these studies are questionable, because many employers will not reveal actual conditions. "It's a strategic issue," they explain. Sure, what employer wants to tell its customers, suppliers, and investors that it doesn't have enough people to fill mission-critical vacancies? That's a proven way to lose business…and vital revenue.

In his work as a convention speaker, Roger Herman asks his audiences of corporate executives how many have essential positions that they can't fill. He reports that 50-60 percent of his audiences consistently raise their hands, confirming the difficulty in finding competent job candidates.

"Technology has raced ahead of job training," Herman says. "We have a lot of people in the workforce, but too many do not have the skills needed for the jobs of today and tomorrow." This condition applies to trade skills, as well as high tech, IT positions. "Our research shows that there are crippling shortages of automotive mechanics, construction workers, HVAC technicians, and kitchen and bath designers. Even though most people think manufacturing is dying in this country, manufacturers are desperate for skilled workers in jobs like chemical processing and operation of computer-controlled production machines."

Turnover rates are increasing.

During the late 1990s, people changed jobs frequently. As we experienced a seller's market in labor job-hopping became a way of life. The economic slowdown a few years ago brought that lifestyle to an abrupt halt as the employment market flipped to a buyer's market. Workers who were accustomed to frequent change have been trapped, notes Joyce Gioia, president of The Herman Group, Greensboro, NC. "People want to move again," says Gioia, "but have not perceived opportunities to apply for better jobs. They've been waiting for the economy to improve to create enough new jobs."

"The economy is improving," reports Jeff Thredgold, CEO of Thredgold Economic Associates in Salt Lake City. "Actual gains in American employment are likely much stronger than what the 'official' job data reports. We continue to suggest," he says, "that manufacturing employment will see significantly stronger gains in 2005." The same scenario applies to construction, service, healthcare, retail, and government employment.

With this improvement in the economy--and the job market, the employment picture is changing. "We're shifting back to a seller's market," observes Ted Daywalt, CEO of, Atlanta. The greater Washington, DC, area, including Maryland and northern Virginia, is experiencing an unemployment rate in the range of 1.3 to 3.0 percent. "The jobs are definitely out there, for people who have the skills and the desire to work. "There is such a demand for veterans, that we're enjoying the most active period in our company's history. And, on the flip side, we are also seeing the greatest influx of vets and active military posting their resumes on our job board. This is an amazing active market," says Daywalt.

Over the past year, a number of surveys have indicated that 30 to 40 percent of employed workers expect to change jobs in the next 6 to 8 months. A recent study by the Society for Human Resource Management and Career revealed that 48 percent of the respondents are actively seeking new employment. The 2004 Job Recovery and Retention Study also reported that 33 percent of respondents are passively seeking new jobs. The fact that 81 percent of workers surveyed are looking at the possibility of changing employers as soon as the right opportunity comes along is staggering.

The Monster Mix-Up

Now something new is happening in the labor market space., worthy of description as a "Big Gorilla" in the on-line job board field, has mounted a campaign to collect more resumes for employers to review. The company is offering prizes as incentives, including a $50,000 grand prize. While this campaign could be viewed as Monster responding to a perceived need in the marketplace for more candidates, the incentive-inspired activity could also give a false reading to the number of people looking for jobs.

Maintain Your Own Nest

The numbers have value to help us understand the threat, the vulnerability. Each organization is different, however, so there is no one right solution. Corporate leaders must interpret the numbers for themselves, then consider appropriate strategies. "There are a number of fundamental things that can be done," remarks Herman, a Certified Management Consultant specializing in employee retention. "The key is to do something, and not just wait to react to circumstances after the fact. Each employer should develop contingency plans based on the best available knowledge gained from books, articles, speeches, consultants, research, and employee surveys. Deliberate action can prevent or minimize problems that could be a serious threat to workforce stability.

The Herman Group is a firm of consulting futurists concentrating on workforce and workplace trends and their implications. Emphasis is placed on employee selection and retention as critical strategies. Included in the firm are researchers, professional speakers, authors, and consultants. The Herman Group is based in Greensboro, NC, with affiliates in Sao Paulo, Melbourne, Hong Kong, and Port Louis, Mauritius. Contact Joyce Gioia-Herman at 336-210-3548 or e-mail:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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