The ever shrinking middle skilled workforce

If you want to get a cogent, simple summarization of what is going on in the labor market and for the diminishing opportunities and prospects for folks caught in the middle so to speak, take a look at these recent comments and observations from New York Federal Reserve Bank Chair William Dudley:

What Kinds of Jobs Have Been Created During the Recovery?

Firms often change the way they utilize workers and the mix of skills they employ during recessions and recoveries.  The weakening demand during recessions forces firms to look for new ways to be more efficient to cope with hard times.  These adjustments do not affect all workers equally.  Indeed, it’s what we typically think of as middle-skilled workers—for example, construction workers, machine operators and administrative support personnel—that are hardest hit during recessions.  Further, a feature of the Great Recession and indeed the prior two recessions, is that the middle-skill jobs that were lost don’t all come back during the recoveries that follow.  Instead, job opportunities have tended to shift toward higher- and lower-skilled workers.

As we’ll show, these same trends have played out in our region.  While there’s been a good number of both higher-skill and lower-skill jobs created in the region during the recovery, opportunities for middle-skilled workers have continued to shrink.

I believe it is important for us to highlight these job trends and to understand their implications for our region.  There have been significant and long-lasting changes to the nature of work.  As a result, many middle-skilled workers displaced during the recession are likely to find that their old jobs will never come back.  Furthermore, workers are increasingly facing higher skill requirements in order to land a good job.  These dynamics in the labor market present a host of challenges for the region to address.  However one thing is clear: workers will need more education, training and skills to take full advantage of the types of job opportunities being created in our region, as well as across the nation.

Lots to think about from NY Fed President Dudley's remarks, even if they are not surprising, it still seems that we (the big, society-encompassing we) are not doing enough or adequately preparing for this bifurcation in opportunity. The middle skilled jobs that Dudley is referring to were traditionally the majority of jobs in many small and midsize cities in America, and perhaps more importantly, the natural bridge from low-skilled and low paid work into higher skilled and naturally, better paid jobs. Even if an individual himself or herself could not make the leap from construction worker or administrative support into a managerial or exec role, chances were at least decent that their kids would be able to advance, even just a little further up the skill/pay ladder.

I certainly don't have the answers to this problem, but it does seem like better strategies are needed. The commonly cited approaches that call for increased business/community college partnerships for workforce training and development and an emphasis to students that jobs in skilled trades represent solid career opportunities seem valid, but what if via the combination of technology progress, outsourcing, and better tools for automation, most of these middle skilled jobs are simply never coming back?

What then? What if the middle skilled jobs continue to hollow out? What if we eventually become an economy comprised of lots and lots of low-skilled service workers and a relatively few (lucky) high-skilled knowledge and creative workers on the high end?

And what happens when the chasm between these two ends keeps growing larger and larger all the time?

CHART OF THE DAY: What age group has employment rising faster than population?

Quick hit for a busy Tuesday - I wanted to share a chart (and the link to a few more interesting charts), on population growth, labor force growth, and employment growth between 2008 and 2014 for one specific category of workers - those aged 65 and up.

First, here is the chart from Mish's Global Economic Trend Analysis, then some observations and free commentary:

Apologies if the chart resolution isn't great, but hopefully you can still make out the key pieces of data. Essentially, while the population growth of those aged 65+ is really high (about 20% of an increase in this group since 2008), the rates of increase in labor force participation and employment are even higher (about 37% and 35% respectively).

Additionally, this is the only age group where the labor force and overall employment rates are outpacing population growth. For example, 16-24 year olds have seen their ranks increase by about 4%, but employment for that group has declined about 6%.

I know I have posted a few times about the general increase in age of the workforce, and the challenges and opportunities this presents to organizations, but it is probably worth thinking about perhaps more frequently than before. Older workers are often overlooked, and can present great sources of experience, insight, and even value, as any folks in this cohort do probably realize that they might be outside of their prime earning years. Also, many will be motivated by the opportunity to share their knowledge and give back as it were to their less experienced workers - which is exactly the kind of on the job learning and mentoring that the next generation desires.  Lastly, you probably don't have to be that concerned, (if at all), with ongoing development and career pathing with this group - they have likely ran most of their career journeys already.

Anyway, this will have to be the last time I go on again about the aging workforce, I think the point has been beaten into submission. Unless I am still blogging say 20 years from now, where I will be screaming about the value of the older workers as far as I can still shout.

Happy Tuesday.

WEEKEND READING: On Age and Scientific Genius

Building on one of the themes of the blog, i.e., the changing nature, demographic and otherwise of the modern workforce, I submit for your weekend long-reading consideration a recent National Bureau of Economic Research working paper titled Age and Scientific Genius, by Benjamin Jones, E. J. Reedy, and Bruce A. Weinberg.

In the paper, the authors examine the relevant literature to determine the relationship, if indeed one exists, between age and great scientific discovery, or 'genius.' Note: Nobel Prizes and great inventions are used as proxies for 'genius' in this analysis.

Turns out there is a relationship, and it might be a little different than your think, and most interestingly, it might be changing.

Take a look at the first of two charts from the paper. First, the 'headline' chart tracking 'genius' against age:

So genius peaks at about 40 or so, then literally and figuratively falls off a cliff as we age.

That can't be good news for one, many of the folks that are reading this post; and two, for workplaces overall that as we have explored before here on the blog, are more and more comprised of 'older' workers.

But maybe the news is not all bad for those 40-plussers. Take a look at how the genius/age relationship is changing over time.

According to the researchers, and like everyone else, geniuses are getting older.

Or said differently, geniuses used to be younger. The peak age for great scientific achievements keeps moving to the right of the curve, particularly since 1965.

So if this trend continues, maybe it is good news for those of us staring at, or even looking back upon, our peak genius years.

On Age and Scientific Genius is an interesting look at the effects of time and generational shifts on the production of great scientific work. Take a look at the paper over the weekend if you have some time, I think even you can spare a few minutes before getting back to the workshop or laboratory.

Have a great weekend!

CHART OF THE DAY: The Return of the Quit

Since many of us in the USA have been a little preoccupied with the relentlessness of global warming that has cleverly disguised itself in the form of the coldest, snowiest, most miserable winter ever, you'd be excused if you didn't notice a little phenomenon or trend developing in your workforce reports and analyses.

Employees are quitting again. 

Well, to be fair, employees always quit, even in bad economic times. But take a look at today's Chart of the Day, from the Bureau of Labor Statistics year-end JOLTS (Job Openings and Labor Turnover Survey) report which suggests that the 'quit rate', i.e. the voluntary separations as your HRIS probably calls them, is trending higher and higher.

Here's the chart, and then (of course), some FREE commentary from me:

Source - BLS Jolts report Dec 2013

Some thoughts:

1. 'Quits' are a function of several factors, (personal circumstances, the magnitude of the jerkitude of your managers, people self-selecting out as not being in the right job, etc.), but most observers of the Quit rate on a macro level ascribe movements in the rate to worker's confidence in their ability to find another, and what they think will be a likely 'better', job.  The rate moving up, to a level that is approaching the pre-recession level, is a signal that overall job market confidence is rising.

2. So while you and many other HR/Talent pros are lamenting about 'hard-to-fill' jobs, simultaneously more of the workforce are thinking of themselves as 'easy-to-place'. I'm not sure how that apparent paradox will work out, (probably very differently depending on location, skills, etc.), but it is kind of interesting and amusing at the same time.

3. How you are thinking about and reacting to news of a good employee quitting is probably changing too. In 2008 or 2009, you might have reacted by thinking, 'What is she crazy? Where is she going to find another job with as good pay/benefits/cupcake Friday like we have here?'. Now? Probably you'd think more along the lines of 'Hmm... She's going to XYZ Corp? I wonder if she could bring me over there too.'

4. Last, while the Quit rate increasing kind of feels like it is a good thing, there is certainly some warning signs as well. For one, those recent quitters might find that their skills and experience are not in as high a demand as they figured, and thus end up spiking the unemployment rate in the short term, (as well as having to take a boatload of grief from people questioning their sanity for quitting a perfectly good job). They might find, even today, that keeping a job is much easier than finding a job. And increasing worker confidence might put pressure on companies to increase wages, which can also have a detrimental effect on growth and profits.

So take a look at the JOLTS report if you are interested in this kind of data, I think it gives a little more color and depth to the more widely reported headline of the total rate of unemployment.

Are you seeing an increase in 'quits' in your shop?

Ready to quit yourself?

Have a great Wednesday!

An aging workforce case study: When clowning isn't cool anymore

I've posted a few times over the last year or so on the blog about the really interesting and important demographic changes happening in the American workforce. Mostly, these changes break down into two, related areas. One, the workforce and the population overall is aging. And two, the overall US labor force participation rate is falling, due in large part to the increasing number and pace of retirements of baby boom generation workers.

But those posts of mine I've linked to above, and honestly most of the 'Econ' type articles on these trends (and their implications for workplaces, companies, and policy), tend to be pretty dry and mostly academic and not really the kinds of pieces that really make anyone think for more than a minute or two about them. Bar charts with fancy shading or graphs with some trend lines can only move you so much. None of seems all that real if you get my meaning.

So for this re-set and take on the aging workforce and what it might mean for you, instead of dropping another chart and trying to convince you that this stuff matters, I want to point you to a short, but fascinating piece from the NY Daily News titled National Clown Shortage May Be Approaching, Trade Organizations Fear that illustrates just how these trends are playing out in the real world, (if 'clowning' could be considered the real world that is).

Turns out there aren't enough people, especially younger people, taking up professional clowning as an occupation. Check some quotes from the NYDN piece:

Membership at the country’s largest trade organizations for the jokesters has plunged over the past decade as declining interest, old age and higher standards among employers align against Krusty, Bozo and their crimson-nosed colleagues.

“What’s happening is attrition,” said Clowns of America International President Glen Kohlberger, who added that membership at the Florida-based organization has plummeted since 2006. “The older clowns are passing away.”

“The challenge is getting younger people involved in clowning,” said Association President Deanna (Dee Dee) Hartmier, who said most of her members are over 40.

“What happens is they go on to high school and college and clowning isn’t cool anymore,” he said. “Clowning is then put on the back burner until their late 40s and early 50s.”

Right there, in the micro-micro world of professional clowning you can see just about all of the major issues with much wider swaths of the workplace and jobs landscape today.

The job has been around a long time, but kids don't see it as cool anymore, and not enough of them are entering the field.

The incumbents are all getting older, retiring, even dying off and shortages are manifesting.

But the job, believe it or not, has higher standards for entry than in the past, so at the same time that interest in the field is falling, the barriers to entry are rising. And customers, the end customers I mean, are demanding more and more for thieir dollar. According to Ringling Bros. Director of Talent David Kiser, “Our audience expects to be wowed. No longer is it good enough to just drop your pants and focus on boxer shorts.”

Ok, at this point, if you have not already bailed out, I want you to think past the scary clown shortage, and consider the roles and people in your organization.

There is almost no doubt you have some of these kinds of 'clown' roles in your shop - ones that are important to the business, but for some reason do not attract enough of a pipeline or candidate flow to sustain once the incumbents trail off. But at the same time as these jobs get more important and pressing to fill, business or technology changes make the qualifications you are looking for even more difficult. Finally, these are still 'clown' jobs after all, they are not the best paying, most socially desirable kinds of gigs.

Oh, one last thing - in the 'If my suitcase doesn't show up in baggage claim within 5 minutes of touching down I am going to tweet about how terrible this airline is' age of the social media enabled customer, the demands for service and performance of this clown role (that you can't fill) are just getting worse.

Maybe not today, maybe not tomorrow, but soon I think, you will have to face the same kinds of challenges that are facing the circuses. 

What are you going to do to prepare for when (Insert whatever it is your company does) isn't cool anymore?