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    Entries in demographics (13)

    Tuesday
    Nov282017

    CHART OF THE DAY: We're all getting pretty old

    A recurring topic on these Chart of the Day posts for some time now has been the impacts and effects on work and workplaces of an aging population. While in the US the demographic 'time bomb' is not expected to be as extreme as it will be in a place like Japan, there still will be some impact, mainly due to the large Baby Boomer generation exiting the workforce en masse.

    Population pyramids are a cool way to visualize the demographic mix in a place and at a point in time, and the below GIF courtesy of Visual Capitalist presents a moving image of the past and expected US population by age from 1980 - 2050. Have a look (or two or three) at the chart, and then some FREE comments and observations after the data.

    Pretty neat, right?

    A couple of things stand out from the data. In 1975, the median age in the United States was just 28 years old. However, it’s been rising fast as the Baby Boomers age, and it’s expected to break the 40 year mark by 2030. And just watch in the chart how life expectancy and average age both keep creeping up. Feels like that is a good thing but even still, these trends have some important implications for workplaces, governmental policies, and society overall.

    An older population by default means more older workers. Whether it is by need or choice or even employer choice, more and more older workers will be a feature or more and more workplaces. And what older workers, say ones in their later 50s and up will want, need, and expect from work and from employers is by definition much different from what the newest group of college graduate recruits will be looking for.

    And while that has probably always been the case, the numbers and increasing age of an organization's oldest workers make that problem or challenge a little tougher than in the past. The mix of ages of the workforce is skewing older, and that has implications for all areas of HR - from training, to benefits, to workforce management and more. And not to mention the need for organizations to be really aware and cognizant of more younger managers, many who lack adequate training and experience in management, wo will be asked to lead and coach more of their older colleagues.

    I remain endlessly interested and fascintated by how these macro demographic trends will impact work and workplaces. And this one in particular, as sadly, I, like you, am getting older every day.

    Wednesday
    Apr122017

    It's better to have a job when you're looking for a job

    As the 2007-2008 financial crisis and subsequent economic recession fade further and further into the distance, we don't in 2017 talk about unemployment all that much. The sustained recovery in the labor market has pushed unemployment to near "full employment" levels of about 4.5% in the US, and in many sectors and job roles most employers would report 'good help is hard to find'. Until the robots take over. But that is a different story for another time.

    Back to unemployment though. In 2008 and 2009, there was plenty of discussion about the best ways to help the many, many folks who were out of work to get back into the labor force. Lots of job search gurus appeared online, plenty of networking and support groups were created, and certainly significant governmental support, (cars, banking, insurance), was marshalled to try and stop the bleeding in the labor markets and help get people back to work (or keep them in work).

    Around that time, as the unemployment rate topped at about 10%, one peculiar storyline emerged, and pretty consistently as well - namely that folks who were unemployed, and 'actively' looking for work, were often characterized as less desirable candidates than say someone who was currently employed, and may not even be actively looking for something new. The dream 'passive' candidate if you prefer that term. Lots of anecdotes about hiring managers passing on any candidate who was out of work were shared, and plenty of folks, (I possibly was one of them), opined about how unfair that this kind of (for lack of a better word) discrimination against the unemployed was seemingly more and more prevalent. And anecdotal or not, it certainly seemed that looking for a job when you did not have a job was much, much tougher than looking for one when you were already employed.

    But just how much tougher is it, really?

    A recent study by the Federal Reserve Bank of New York looks to put at least some data around these anecdotes by looking at job search activity by unemployed workers, by employed workers, (both passive and active), and people out of the workforce. The entire report is interesting and worth a read but I thought I would tease out two of the report's most interesting findings about job search, and more importantly, job search outcomes.

    1 - Lots of employed people are actively looking for work - almost one quarter of them 'actively' searched in the trailing four weeks of the survey period

    Not shocking I guess, but also the 23.3% doesn't account for the probably much larger number of employed workers that would be open to at least discussing new opportunities, even if they were not in active search. Said differently, one of the reasons contributing to a bias in favor of employed workers is the fact that just about all employed workers are still in the candidate pool anyway. At least partially in.

    So how does this perceived bias influence outcomes? Here's the money chart from the study, depicting how search behavior and application intensity translate into positive outcomes, i.e. job offers.

    I will help you with the fine print here. Unemployed workers make up about 7 percent of the survey sample. They send out 40 percent of the total job applications, but receive only about 16 percent of the total job offers.

    In contrast, folks who were employed and were actively looking for work make up about 20 percent of the sample but receive almost half of all offers. Further, the employed not looking for work (and who do not apply for any jobs), receive about one‑fourth of all the offers in our sample—more than the unemployed who are the most active searchers and applicants.

    So how much better is it to be employed when looking, (or in many cases not looking) for a new role?

    Well, according to this data, much, much better. Roughly it takes eight times the effort in terms of time spent and four times the application rate for unemployed folks to generate a similar rate of job offers that employed workers realize - many of whom are not looking for work at all.

    Hopefully we won't have another dramatic economic or market shifting incident like the financial crisis that drives up unemployment and will make these findings and their impacts top of mind again. But it is good food for thought for any of us who may not love the job we have now, and are looking for something better.

    We just might want to hold on to that crappy job as long as we can, because having it makes our odds of finding the next (hopefully less crappy) job that much better.

    Friday
    Jul292016

    CHART OF THE DAY: Big Trends in Working Age Population

    Super quick hit for a summer let's-get-out-of-here-and-head-to-the-beach Friday where, at least here in the USA, many of us are going to tire of the phrase 'Corn Sweat' (go ahead and Google it).

    Today's chart comes from our pals at the Economist, from a piece titled 'Vanishing Workers'. First the data, then some quick observations from me before you can power down and crack out the sunscreen.

    In a nutshell, this data suggest the working age populations, (15 - 64),  in China, Japan, and Europe are all set to fall (relative to a 2015 baseline), somewhat dramatically in the next few decades, while by the same measure, this group will continue to rise in the US, (albeit at a slower rate than the recent past).

    What happens (in general), when there are relatively fewer available workers, and what might be the implications in the USA where we will be bucking against this trend?

    1. Fewer workers generally lead to rising wages, at least in the near term. And there is plenty of evidence of this already happening in China, where increased competition for workers (especially in manufacturing), has driven up wages for these workers, and made many firms think again and re-evaluate the cost advantages of locating these kind of operations in China.

    2. Falling working age populations impact industries in different ways. With fewer workers, (and an increase in the dependency ratio, the total number of children and elderly divided by the working age population), housing and construction tends to suffer, as there is less demand for new, and larger housing from workers overall. But health care, child care, and related service industries might fare better, with an increased burden of care demanded by larger proportions of kids and older people.

    3. For the US, one of the few industrialized economies that will not see such a fall in working age population over the coming years, the news is pretty positive. Larger proportions of working age folks tend to have a pretty direct and beneficial impact on GDP, output, and overall quality of life. And of course more folks in their prime earning years reduces the overall drag on the economy that can result from a higher dependency ration, all things being equal. There should be less need to raise payroll and corporate tax rates for example, in order to continue to fund things like Medicare and Social Security. The downside risk of course, is that jobs and opportunities for workers have to rise commensurately with this demographic trends, or else you end up with higher than desirable levels of unemployment or under-employment. But balanced against the alternative, potentially not having enough prime age workers to meet demand, (which will send investment elsewhere), it seems the US position to be the more desirable one in the long term. And for my line of work, the HR Tech space, it seems clear that growth and opportunity for HR Tech companies will continue to primarily reside in the USA, as Europe and other countries working age cohorts, (the 'users' of HR Tech), continue to fall.

    Love the data. Love labor market demographics. If that makes me some kind of a geek, so be it.

    Me fretting over me Level in Pokemon GO also makes me a geek, but for a different reason.

    Monday
    May162016

    CHART OF THE DAY: More Americans are Working Longer

    I am a total mark for labor force data and today's Chart of the Day fits the bill perfectly. Check out the below chart on the Employment to Population ratio for Americans aged 65 and up over the last 50 years, and of course some FREE comments from me after the data

    (Chart courtesy of Bloomberg)

    Lots of interesting points we can tease out of this data, so let's go..

    1. Just under 19% of Americans age 65+ are currently in the workforce, according to the BLS. This is the highest percentage of working people in this age cohort since the early 1960s. 

    2. Why are folks in this age cohort working in greater numbers than before? The most commonly cited reason according to a recent study from Transamerica is that they need the income and benefits. The financial crisis, and the tech bubble that busted a few years before that, devastated many baby boomers' retirement savings accounts, and has forced them to work longer than they had originally planned.

    3. The next most commonly cited reason for 65+ folks to remain in the workforce is that, well, they like their jobs and want to remain a part of their organizations. You probably know, or maybe feel this way yourself, that traditional 'retirement' is not at all that appealing. From the same Transamerica survey, 36% of respondents indicated enjoying their work and wanting to stay involved in the workforce was a primary reason to delay or postpone traditional retirement.

    4. Finally, a couple of other trends are factoring in to help drive the employment ratio up for older workers. Some organizations need the experience and expertise of these workers, and would have a difficult time replacing them should they begin to retire in greater numbers. In certain, less exciting industries, these older workers remain essential to the organization, and are being incented to stay in the labor force. And one more thing - folks are just living longer and remaining more productive later in their careers than in the past.

    Add it all up and it seems that these trends suggest that more and more of the workforce will be comprised of older, 65+ workers. Business and HR leaders that want to take best advantage of this situation will make sure they are not ignoring older workers in their recruiting, are willing and able to make necessary adjustments and accommodations as needed, and are actively engaging their older workers in important projects and in mentoring their younger, less experienced workers.

    We are all getting older. It just seems like it is happening all at once.

    Have a great week!

    Thursday
    Dec102015

    More on the performance curve

    About a year ago I published a piece called 'The Performance Curve', a quick look at how in professional baseball decades of analysis of player performance reveal a very typical average performance curve. Player performance, (hits, home runs, wins for a pitcher, etc.), almost universally 'peaks' at about age 29 or 30, and almost always begins to decline, sometimes steeply, at about age 31. The chart I used in that post is below:

    The specifics of the Y-axis values don't really matter for the point I am after, (they represent standard deviations from 'peak' performance', but simply looking at the data we see for both the original study sample (veteran players with 10+ years of data), and 'less restricted' players, (more or less everyone else), that performance peaks in the late 20s and declines, predictably, from there. Keep this data in mind the next time your favorite team drops a 7-year, $125M contract on your best 31 year old slugger. 

    Last year my point in running the post was that these kinds of performance curves likely exist, and are becoming more discoverable, in all kinds of jobs due to the increase and improved capability of tools and technologies to better manage, track, and analyze performance. I still think those conclusions to be true a year later.

    But what got me thinking about that post from last year was yet another chart I saw this week, this one excerpted from the bank HSBC on the macro-impact of changing demographics, particularly in the workforce of industrialized countries. Take a look at the chart below, on the generalized productivity (as defined by output), across the typical worker's life-cycle:

    According to HSBC, and unlike the data we see with baseball players, 'performance', (again, in this case limited to a measurement of productivity), continues to climb during a worker's life, peaking at around age 50 or so. And worth noting, even though the productivity peak hits at about 50 and this average worker still has about 15-18 more years of work ahead, that the relative productivity in that last decade+ is still relatively high.

    Said a little differently, HSBC is saying that a workforce made up of 50 - 65 year-olds would be, on aggregate, more productive than one made up of 30 - 45 year-olds, all other things being equal. Obviously, this is data that should be taken in a very general sense, as we have seen from the baseball example, there are many roles whose physical requirements negate the increased productivity effects of age/experience have on other roles. So while a 55 year-old first baseman will never be able to compete physically with a 28 year-old one, change the role from 'first baseman' to 'accounting manager' and we may have a very, very different outcome.

    Last thing I want to leave you with on this, and the thing to take away and really think about is what is happening, (again, in a general way), in labor forces across the industrialized world, and what will continue into the next 10 years or so. Here is another chart that shows how the workplace and workers are skewing older, courtesy of Jed Kolko:

    The combination of more rapid population growth and increasing labor force participation among older workers are expected to result in about one-quarter of the workforce by 2024 being aged 55+. That is a huge increase from only 20 years prior, (1994), when the percentage of workers aged 55+ was only about 12%.  And workers 65+ are expected to make up almost 10% of the workforce by 2024, up from less than 3% just 20 years prior.

    There is plenty to think about here for sure, and as usual, no simple answers. The workforce is certainly skewing older, that seems to be indisputable. But what that means to organizational performance is not as clear, unless you are managing baseball players. For the rest of us, thinking about how these changes will or at least should impact how we hire, develop, coach, train, and mentor employees in the next 10 -15 years is probably one of the most important human capital challenges we will face. Think about it.

    Ok, that's it - I'm out. I need to get back to being super-productive (judging on where I sit on the curve).