Blog Post: The Crisis That's Taken a Backseat

Pursue the Passion got a chance to interview Tammy Erickson, a McKinsey Award-winning author, Harvard MBA graduate, and President of the Concours Institute on the Pursue the Passion tour last year.  She is responsible for the book, Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent, and below are excerpts of our interview concerning the Workforce Crisis.

Brett Farmiloe: You’re the co-author of the book Workforce Crisis.  I was wondering if you could explain the workforce crisis.  What it’s all about and why we should be worried about it? 

Tammy Erickson: Absolutely.  Actually, you should not be worried about it (laughs).  You should be delighted being as young as you are.  

Basically, what the workforce crisis means is that anybody who wants to work going forward, young or old, will probably be able to find a job.  There should be good jobs out there for anyone who wants to participate in the workforce.  

The people who are worried and should be worried are corporations.  Because there won’t be enough people.  Particularly not enough people with a college degree.  The essence of the workforce crisis is that we’ve had a lot fewer children over the past two or three decades.  Birth rates have fallen substantially.  That’s now catching up with us.  The smaller groups of people with lower birth rates are now entering the workforce.  And it’s happening right about the same time as a big group of people, the boomers, are leaving the workforce.

People in their twenties today can just about replace the boomers.  Just about, but not quite.  But that assumes you have the same level of skill and experience, and it doesn’t allow any room for growth.  If organizations want to grow and hire more people than what they have today, which presumably all the organizations will do, we are going to be short.  

So for young guys like us, what do you suggest?  Do we hop on with some corporation and ride it out for three or four years and be at the top of the pyramid?  What’s the deal? 

Well, that’s a good question.  I think it depends a lot on what you enjoy.  The reality is you’re not in all likelihood, ideally suited to the way you prefer to work.  The reality is corporations were designed by your grandparents.  And your parents, more or less, went along with the rules as they were stated.  

So corporations to you are probably going to seem pretty stuffy.  They’re hierarchical. They have very rigid decision making processes.  They’re slow.  I think a lot of people in their twenties just are very frustrated by that.   

My message is a couple of things.  One is I hope some of you stay in corporations.  And I hope you help change them.  Because corporations need to change.  They need your passion and your energy to change and do things in different ways.

On the other hand, I think realistically, a lot of folks in their twenties are thinking more about entrepreneurial activities.  Doing things on their own, being their own boss.  Because they don’t want to be in the corporate world. 

How is that going to evolve then?  Do the companies have to change?  

One thing I tell companies when I advise them is you better be prepared to educate your own workforce.  You are almost certainly going to have to hire people below the level of formal education that you would like.  And you’re going to have to provide that education.  Whether you pay for them to go back to school or you do it through in house training, somehow companies are going to have to participate more in education.  That’s one point.

The other thing that is interesting to me, is that maybe over time, college degrees will become less important because more companies will hire people with only high school degrees.  It may have a little bit of an ironic bowback.  If there aren’t enough college grads, and you have to hire high school grads, does the college degree become less valuable?  I don’t know.

It will be interesting to see.  It might open up a lot more opportunity for people that don’t have the finances to go off to college.  As long as they have that ambition and drive. 

It could be.  It really could be.

It’s all about the value you bring, I guess.   

Yep.

That’s good advice.  Do you have any questions? 

Zach Hubbell: I was going to ask when is the time for young people to take advantage of this workforce crisis.  Is it now?  Is it in the next five years? Is there a specific window that these companies are going to be looking for people? 

It’s a good question.  It’s definitely getting worse all the time.  To put it on a spectrum, five years ago when I started doing the research, people laughed.  ‘Why are you wasting your time?  Ridiculous issue.  No one had a problem.’  

About a year ago, technically from an economist perspective, the line between supply and demand crossed.  We switched over into a supply constraint, from a labor perspective market in the United States about a year or a year and a half ago.

Even that’s very unequal.  You go to some parts of the country where jobs are still tight.  It’s hard to get a job.  But you go to other parts of the country, the West Coast, the East Coast in many cases, and workers are tight.  It’s hard to find labor.  

Essentially it depends a bit at the moment on the job and the geographic location.  But over the next three or four years, it’s going to become much more widespread for most occupations and most geographies.  

So how do you beat the workforce crisis? 

That’s a really interesting question and a whole set of dimensions to it.  It’s very unlikely that technology will materially change the projections.  The reality is women are actually getting out of the workforce more than they’re getting in.  Almost 40 % of all women drop out of the workforce when they have children, so we don’t expect women to solve the problem.  Immigration probably won’t solve the problem.  So there aren’t a lot of options out there.

The fastest one for any company is to extend the retirement age.  There’s no question.  The easiest, simplest thing for anyone to do is to convince people who are thinking of retiring to work a couple more years.  That’s easy.  They’re already educated and trained.  If they could work a couple more years, you’ve bought yourself some time.   

The second thing you have to do is you have to be really good at attracting you guys.  Generation Y.  I say to companies that if they want young talent, you better be absolutely the best there is because they’re going to have their pick.  They can pick and choose and work for any company they want to.  So you better be really good if you want to attract top young talent. 

That’s how you can beat the workforce crisis.

Brett Farmiloe and Zach Hubbell are a couple Generation Y guys who interviewed over 300 professionals about how they came to find their passion in work.  Their Pursue the Passion tour has become a program of the Jobing Foundation, where Brett and Zach speak to companies and conferences about how to retain and attract Gen Y workers, and how to channel, promote, and revive the passion within organizations.  Click on this link to view their speaking trailer if you’re interested in hearing their message.