Workforce Shortage

In my spring newsletter under the workforce section I presented some information about workforce shortage projections that have frightening implications for businesses in Canada.

The Conference Board of Canada’s projection for 2020: A shortage of one million workers. 2020 is barely more than 13 years from now. In Canada we are already feeling the pressure of shortages of workers. We can only expect those shortages to grow as our workforce ages and our birth rate, which has been below replacement level since 1970, remains below replacement levels.

What can we expect to see?
The “talent wars” will get increasingly intense. News articles about businesses closing for lack of workers will go from the reasonably rare of today to commonplace. The pressure to reduce minimum age for workers will grow. There will be greater flexibility in work and work relationships. Disenfranchised members of society will have opportunities that did not previously exist. There will be more offshore outsourcing of some types of work. The pressure to meld education with workplace training and development will grow. Self-service will appear in places where it does not currently exist.

What does this mean for the organizations of 2020?
Organizations will increase efforts aimed at attracting and retaining people. Compensation will become increasingly personalized. The transition of command and control management to enabling support will be completed. Successful organizations will find ways to ensure all work processes are efficient and effective.


What does that mean in terms of the day-to-day reality for the people who are working?
The employed will be faced with a constant barrage of calls from recruiters with great opportunities. There will be more work than the existing workers in organizations can do and there will be accompanying pressure to increase hours worked and productivity during those hours. The blurring of work and personal life will be complete and people will be “on call” all of the time. More people will spend periods of time working and periods of time rejuvenating through sabbaticals, long vacations and returns to school. There will be more career changes and they will be easier.


How skeptical should we be about projections of workplace shortages?
The aging population in the first world countries is healthier and wealthier than ever before. Their attitudes about their retirement years are different than those of retirees in the past and many expect to work in some capacity after they have retired. The removal of mandatory retirement will have only a small impact on workplace shortages. Resistance to increased levels of immigration and temporary foreign workers will continue to limit those sources of workers. We are going to see more serious shortages of workers than we are already.


Where does all that leave us?
Depending on how individuals and organizations use the situation, we could be in for the worst of times (shortages of goods and services, poor quality, long lineups, high prices and a reduction in our standard of living) or the best of times (lots of opportunities for people, great organizations producing high quality goods and services, increased productivity).

Looking for more information or need some help with these or other HR issues? Please get in touch.

 

News
Compensation
Summer 2006 will be remembered by many as the year that the rumors and reality of compensation changes merged into an indistinguishable blur. Formal survey data was out of date long before it was published and employers in Alberta struggled to determine what was a reasonable level of base pay. Nearly half of Alberta employers provided an unusual mid-year base pay increase for employees.

In this demanding market I was invited to speak at a Federated Press sponsored Compensation & Benefits Conference in Calgary in late October. My topic “Effective Performance-Based Reward Practices: Selecting the Right Strategies and Practices” (PowerPoint download). If you have trouble downloading the presentation, please contact me.

Legislation
Canadian HR Reporter reported in April 2006, The Office of the Superintendent of Financial Institutions (Pension Regulator for federally regulated private pension plans in the public sector) gave first time ever permission for three defined benefit pension plans to reduce benefits. Similar requests are also occurring at the Provincial level. Pension plans are significantly impacted by the interest rate declines and new actuarial standards that mean higher funding requirements in 2006.

What are the implications of this decision? On the personal level there are the personal financial planning problems created for individuals affected by the reduced benefits they will receive. On the organizational level there is yet another reason for employees to see their employer and benefit plans through glasses colored with cynicism and distrust.

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