Time for Employers to Worry
If you are an employer and you are not concerned about your employees, 2005 could be a wake up call. According to a recent survey by Hudson Global resources, 42% of workers are somewhat to very likely to look for a new job in the coming year. ExecuNet, an internet networking and career change site, stated recently that in its survey 62% of executives are not satisfied with their jobs and that 97% of them plan to change jobs in the next 6 months.
Want more bad news? The Conference Board reports that only 50% of all Americans are satisfied with their jobs! Only 14% say that they are very satisfied with their jobs… Research shows that employees are dissatisfied with pay, burned out by incessant downsizing, and lost trust of senior executives.
Adding to the near term flurry of employee turnover are other long term and potentially more devastating issues. American business will face three critical long term issues that will begin to unfold over the next five years.
The first problem is a leadership drain. Currently most of the business leaders today are Baby Boomers, many of whom plan on retiring in the next five years. A Business Wire survey found that only 20% of senior executives in Fortune 500 companies qualified to retire. In 2010, many companies expect to lose 50% of their senior leadership according to a survey by RHR associates. But, many of the next generation of employees haven’t been groomed for leadership. Due to the flattening of organization structures and the emphasis on specialized skills, well rounded leaders have simply not been developed. Executive Development Associates found that 70% of responding companies cited lack of leadership bench strength as a major corporate challenge.
The second problem is a brain drain. America is losing the race to educate its people and attract scientists, engineers, and academicians from other countries. According to the NEA, America ranks fifth in the number of young people that hold a college degree. It used to be first. Additionally, America has one of the highest high school and college drop out rates amongst other developed countries. 25% of America’s youth do not complete high school and U.S. eighth graders rank 19th in math. According to a Wall Street Journal article “Competitive Edge of U.S. is at Stake in the R&D Area”, the U.S. graduated 60,000 engineers from U.S. colleges, while China and India graduated five times as many. Additionally, 28% of our own PhD graduates are foreign born. Why is this important? 80% of today’s jobs require some postsecondary education and training and the 50 fastest-growing occupations will require education beyond high school.
Can we continue to depend on a continuing influx of highly educated foreign-born immigrants to fill the ranks? The answer is no! In 2000, 179,000 highly educated / skilled immigrants entered the U.S. It is estimated that in 2004, only 65,000 highly educated / skilled immigrants entered the U.S. In fact, many of these talented immigrants are now returning home to China, India, and Ireland. They are leaving and taking their kids with them. Unfortunately, 60% of the National Merit Scholars are children the people that are now returning home.
The third problem is an employee drain. 77 million Baby Boomers will begin to retire in 2008. As the nation ages, the number of employees available to fill jobs will not keep up with demand. According to the U.S. Chamber of Commerce, between 2000 and 2010, the U.S. labor force will grow by 12%, while the number of jobs will grow 17%. The result of this demographic trend is that their will be 10 million more jobs than people to fill those jobs by 2010! Exacerbating the problem is that many of the available workers will not be able to perform the duties of the jobs in the future, so the real gap may be significantly larger than 10 million. By 2020, our population will have increased by 18% while retirees will increase by 100%.
Will offshore outsourcing bridge the future gap in American businesses? It is not clear that all the needed jobs can be filled by through outsourcing. According to Forrester Research, 3.3 million jobs could be outsourced by 2015. This is only a fraction of the worker shortfall predicted by 2010.
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