Tuesday, March 01, 2005

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.

Next: How to prepare

Thursday, February 03, 2005

Sports, Business, and Human Endeavors

The biggest concern I see on a regular basis as a consultant, business leader, and frankly while talking to friends and colleagues is that business leaders / owners think of their business as a big machine. Most are content to think of their employees as resources and expenses, looking to pump more work through the same workforce. Some leaders work harder to invest in the well being of employees, in order to increase retention or boost productivity. Few realize that these steps barely scratch the surface of the potential welling within each and every employee.

As I think about organizations, I always think about sports analogies. Being a Midwestern born man, it inevitably leads me to think about football. Football, to me, is the best example of team sports. In the NFL, every player has a role and nearly everyone on the active roster plays on Sunday. With free agency, limited rosters, the salary cap, and the way the draft order is determined, every team has the potential to build a winning organization.

Yet, each year there are surprise teams that catch lightning and rise to the top in any given year. There are teams that seem to be cyclically improving or declining. There are those teams that perennially cannot seem to get off a losing track. Then there are those teams that seem to have figured it out. Year after year they seem to win. How can this happen in a league that is set up to be so balanced?

Not surprisingly, the same things that make a football team great make a business organization great. I think it starts with knowing who you are as an organization, why you do the things you do, and how you go about doing it. Knowing this cannot be constrained to being in one persons head, but the entire organization must be cognizant of it. In fact, cognizant is too lightweight a word. Everybody must feel it to their core and buy into it completely!

Why? Because businesses and football teams are human endeavors! Any human endeavor that has the potential for greatness can only achieve that greatness through the motivation and actions of its people or by pure luck! Which one do you think you can rely on regularly…?

So, why should it matter? We are paying these people to work after all and in return we expect them to do their jobs! Well… yes and no. It doesn’t take too much effort to go through the motions to get a job done, but it does take a lot of effort to do a job well while looking out for the best interests of the company. How many employees are punching in, operating at a spinal cord level, and punching out each day? How many can’t wait to get into the office because they know they get to make a difference? I’d venture to guess that only a small fraction of the workforce is excited by their jobs.

Is that all? Just rally the troops and sit back and watch the money flow in… Not exactly, but it’s a big step towards tapping into the real potential of your company.

Friday, January 07, 2005

Welcom to BizBlogBuzz

After thinking about it, I just did it and started a Blog I can call my own!

My aim is to add commentary to the stream of consciousness on the symptoms and illnesses of a business world gone wrong.

I beleive that we are in the very beginings of a business revolution... A revolution that will change the dynamics of the marketplace and redefine how businesses are architected. To survive, businesses will need to develop a conscience and become more of a community of likeminded people, instead of being run by the numbers.

Why?

Resources move too freely to be cornered by any massive company... Information, capital, and human resources will move quickly to where they are best used.

By 2010, qualified employees will be the scarcest of all resources in the US economy, despite the emergence of global outsourcing. Businesses will have to rethink how they will attract and retain employees that to date they have basically abused!

Baby boomers who populate the leadership ranks of most companies will retire leaving an enormous vaccum, but a huge opportunity for new thinking.

Today's bright young business minds know two things: (1) speed kills and (2) fortune favors the brave... The best business will be small and nimble, populated with committed and talented people, and who are constantly searching for the next innovation.

We are surrounded by the symptoms of a business world that is out of balance, but there is a growing glimmer of hope...