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Saturday Feature
 
Why we need to hire more not-so-fresh blood
Richard Donkin
2/4/2006
 

          Resource re-entry is a dreadful American recruitment term but the concept is one that European companies will need to get to grips with in the next few years as demographic changes begin to influence management and employment policies.
The idea of re-recruiting older and mid-career employees in previous employment with the same company is explored in a forthcoming book, Workforce Crisis, How to Beat the Coming Shortage of Skills and Talent, by Ken Dychtwald, Tamara Erickson and Robert Morison.
Dytchwald's earlier book, Age Wave, was one of the first to consider in detail the implications of the baby-boom generation moving towards retirement at a time of falling birth rates and increasing life expectancy across the industrialised world.
Now, he and his collaborators have assembled a package of approaches that companies might adopt to stave off what they argue is an impending employment crisis for those who fail to prepare, or to adjust their attitudes to, recruitment and employee development.
While most of the examples and statistics in the book are drawn from the US, its warnings are even more pertinent for companies in Europe where birth rates have been lower than in North America.
The problem of the post-war demographic bulge has been accepted for some time but it may be worth revisiting statistics reflecting that this unprecedented shift in population age distribution is no longer something that can be regarded as a problem on the distant horizon.
Nearly one-third of all Americans, 76m people, were born between 1946 and 1964, a population surge that is sandwiched between depressed birth rates in the inter-war years and those throughout the 1970s. But while US birth rates appeared to have steadied around the replacement rate of just over two children for every woman, those in Italy (1.2), Germany (1.3) and Japan (1.4) in the 40 years to 2000 have been well below the rates needed to sustain a healthy workforce. The rates of 1.7 in the UK and 1.8 in France are less acute but still problematic.
Without a radical change in birth rates or immigration, this will mean that by 2050 the German, Italian and Japanese workforces will have been reduced by 25, 30 and 38 per cent respectively.
The British working population is expected to rise by 7.0 per cent up to 2020 then decline by the same proportion to 2050 so that the UK should have the same number of workers in the middle of the century as it had in 2000.
Birth rates, however, are only part of the picture. The authors point out that industrialised countries have begun to experience a "longevity boom".
As they also note: "The milestones of life are shifting upward. What is middle age? When are workers no longer productive? At what age do employees stop seeking new challenges?" The answers to these questions, they argue, will help companies shape future employment policies that must reverse an entrenched system of channelling people towards mid-career plateaus. This is the stage where people often leave or lose their way, under the plausible assumption that their employer is concentrating on younger, less expensive and more, easily manipulated employees.
The problem is not eased by the book's prediction that, in the US at least, a shortage of skills will precede the shortage of workers.
The Employment Policy Foundation has estimated that the creation of 23m jobs in the US this decade will outstrip the supply of new workers by a wide margin at a time that the workforce is losing technical skills through retirement.
Offshoring, a cause for political alarm in the past few years, has done little to undermine the overall position of the US as a net importer of jobs. In finding the people to do these jobs, the US appears to be faring somewhat better than many of its European competitors. By 2020, says the book, immigration will account for virtually all of the net workforce growth in the US.
In the same period the EU will need either a two-thirds increase in productivity or a significant influx of employees through immigration if its economic output is to avoid contraction. "Germany alone is likely to need 1.0m working-age immigrants a year to maintain its workforce," it says.
The effect of these coming shortages, however, can be offset by more effective employment policies, particularly in the way companies recruit, train, retain and re-engage existing and, in some cases, former staff. The boomer bulge, it is clear, must remain a source of economic exploitation. To wave people off to early retirement is a recipe for economic reversal.
The spending potential of the boomers has been as important as their working potential in sustaining economic growth. That will only be kept up by maintaining their contribution to the workplace.
One important solution, say the authors, will be to create recruiting channels that attract older workers, the retired and women who want to re-enter the workforce after raising families.
Monsanto named the policy that it introduced to bring back former workers "resource reentry". Its programme now has about 300 employees, who would otherwise be retired, working part-time.
But more work can be done, say the authors, in revitalising the careers of existing employees, often those over 40 who may have become stuck in a particular role due to family commitments or in the face of competition for fewer managerial positions.
"They've made compromises at work and at home, and career and life decisions may have painted them in to corners," says the book.
Relatively straightforward changes, it says, can quickly reinvigorate a seemingly tired employee. These might comprise a fresh assignment, rotation to a different part of the company, extra or specialised training, an in-house career switch, or a sabbatical. As it points out: "To retain mid-career workers tomorrow, you must re-engage them today."
Attitudes, it says, must also change towards the re-employment of people who have left the workforce. "Organisations hire young workers primarily on the basis of their capability and potential more than immediate experience. They should be open to hiring all people on that basis."
Young recruits, who may leave after three years, are always viewed for their potential yet the same view is rarely applied to a 55-year-old who has the potential to contribute another 10 or 15 years to the business if encouraged to build on existing experience.
The re-think of employment policies surrounding this crucial ageing segment of the workforce, I believe, is one of the biggest resourcing challenges facing companies in the next few years.
Mr Dychtwald and his coauthors have produced a timely body of work that addresses one of the most significant economic concerns of policy makers in the industrialised world.
....................................................
Workforce Crisis, How to Beat the Coming Shortage of Skills and Talent, by Ken Dychttvald, Tamara J Dickson, and Robert Morison, is published in April by Harvard Business School Press, price $29.95

 

 
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