FutureWire - futurism and emerging technology

Wednesday, March 22, 2006

Job Market Rapidly Becoming a "Seller's Market"

The Herman Group, a futurist-oriented HR consultancy oft-quoted here, has been forecasting a fundamental change to the global labor market for several years. Now, it believes that the US alone will face an employee deficit of 10 million by 2010.

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.

The group points to trends worldwide that show increased and more aggressive hiring. In Japan, where job growth has been stagnant, many of the top firms plan to hire 1,000 or more recent college graduates this year -- an unprecedented number in that country. In addition to a worker shortfall, Japanese employers are also grappling with a 30% turnover rate among new hires.

UPDATE: Peter Cappelli of the University of Pennsylvania's Wharton School believes that the situation is not so much a labor gap as a skills gap. In an article published in the Feb. 2006 issue of the ASTD's TD magazine, Cappelli argues that while no shortage of people exists, employers are struggling to get workers up to speed, and don't have good training programs in place. Others, though, insist that the demographics of a labor shortage are very real, and that the labor market faces a shortfall of 7 to 10 million skilled workers with education beyond that of a high school diploma in the coming years. All, however, agree that the US labor market faces a deficit of skills, especially executive, managerial, communications, IT and project management skills.

UPDATE 2: The same article cites a survey by the Association of Executive Search Consultants suggesting the US could face a "brain drain" if overseas job opportunities were appealing enough. Half of the US executives surveyed said that they would be willing to relocate to China, and 35% said they would consider moving to Russia or India.