It’s been a tough 4 years for the US economy. Unemployment is still dragging the overall economy down; if people don’t have jobs, they can’t buy homes or can’t afford to pay the mortgage on homes; plus they consume unemployment benefits and don’t pay taxes. It’s a morass, which takes time and political resolve to fix. Sadly, political resolve is similarly dragging the overall economy. But then there are the 92% of Americans who have jobs, who are paying taxes and mostly paying their mortgages.
The employed represent an interesting transitional challenge for all employers over the next couple of years. 50% of working Americans will be eligible to retire next year. 50%. That’s a LOT of people. This includes everyone who is on a formal pension plan: unions, government, military, etc. Therefore, eligible to retire doesn’t necessarily mean leaving the work force. As an example, both GE and Philips have early retirement programs that subtly push out their most tenured baby boomer managers. But many of these baby boomers will begin to enter an extended ‘peri-retirement’ period of their lives. Most baby boomers don’t want to fully retire; and most baby boomers don’t want to fully work, either. So balancing the boomers’ expectations of quasi-employment, with the needs to be fully staffed will represent an interesting management challenge to the Gen X’rs who are anxious to push the boomers into rocking chairs.
At the same time, 53% of employees claim to be ‘burnt-out’ and 44% of employees are either receptive to leaving or ready to leave their current employer. Employee engagement levels hover around 33%, with ‘almost engaged’ at 24%. The combination of those numbers is roughly equivalent to levels in 2008; but still represents a pool of employees that are disengaged or largely going through the motions of 43% of the employee base. The engagement levels are highly correlated with age, with Boomers 36% engaged and GenY’s 23% engaged.
What’s this all mean? It means that the War for Talent, which is here and growing daily will be uniquely shaped by quality of life issues that we’ve never faced before. Management of engaged part-time producers seems illogical; but it’ll become far more commonplace over the next ten years. The ability to retain employees will largely be a complex mix of offering challenging assignments and quality work environments with flexible hours and variable vacation benefits. Keeping talent will require some managers to simply say ‘thank you’ for being here; others may be far more challenged to provide enough interest to keep tenured employees.
Attracting new talent will also bring new approaches. ‘Filling a job opening’ will give way to creating an enticing opportunity to unique talent that may not be actively looking. The need for professional recruitment practices will grow and won’t be marginalized by internal recruiting departments that are largely charged with ‘filling openings’. Recruited talent is markedly different than applicant talent. The techniques, interviewing process and approach to attracting are profoundly different. Yet, most companies treat recruited talent like applicants and lose them before the offer stage.
Currently, US companies experience an average turn-over of employment of 13%/yr. That means that a company would need to hire 100% of its current employment every 5.5 yrs. There has to be a better way to attract and retain talent and to keep them actively engaged in the business. Companies with the highest levels of engagement report 19% higher average earnings than companies that have average engagement levels. In companies with low-engagement scores, their earnings are 44% below average. There’s something to attracting and retaining talent who is engaged in the business. It starts with recognizing that talent within your own company and developing a process to retain them. Quality talent attracts additional quality talent. The trick is to recognize how to identify quality talent; yours and others.
It’s been a remarkable year for us. We’ve hit our second largest revenue in our history and have a large backlog into next year. We’re actively interviewing and hiring for our own office and feel very bullish on 2012 and beyond. The numbers are strongly aligned behind us: the retirement of Boomers, the alienation of disaffected quality talent and the need for our client companies to meet the demands of adapting to the rush of technology into a traditionally staid industry. We’re excited for the future and we’re also very thankful for the trust of our clients and candidates.
It’s that time of year when collectively as a nation we say ‘thanks’.
To all who read this… thank you.