Demography & consequences of aging populations -- HIGHLIGHTS:

Overlooked MARKET OPPORTUNITIES,
New worker VALUES,
International LABOR supply

Note: Upon numerous requests, here are highlights from the several threads addressing the soon-arriving upshot of a critical demographic shift: the world's aging population. Tamara Erickson and Bob Morison, co-authors of the highly recommended new book Workforce Crisis, joined several discussions. (Find the main one, which includes an interview with Erickson, here.) Below are selected comments from Erickson and Morison on the main themes that emerged.


Workforce shortages worldwide
Tamara Erickson: The reality is most international markets are facing an even more significant shortage than we are.  Growth in working age population will actually DECLINE in countries like Germany, France, Spain, Italy, Russia and Japan over the decades ahead.  Many of these countries, particularly those in Europe, will address their shortages in part by tapping supplies from other countries -- those in Eastern Europe, for example, where both numbers and, even more importantly, skill levels remain high.  But many countries will be competing to attract talent from increasingly limited sources.  And the US is currently losing many of its most highly educated immigrants as they return to opportunities in other countries.

Industries facing skills and labor shortages right now
Bob Morison: Already, healthcare and various forms of engineering, including aerospace and petroleum, are struggling. Automotive is tricky -- GM and Ford have problems, but Toyota and Honda build factories. Jobs with a United Auto Workers package of security and benefits are disappearing, but the industry as a whole is not doing badly. Also note that GM's buyout offer to 100,000+ employees seems staggering, but under 20% of employees (typically far under) take such buyouts, so the resulting job loss amounts to a fraction of a fraction of a percent of the American workforce.

Life expectancy and birth rates contributing to trouble
Erickson: Another important point -- the Baby Boomer phenomenon is only one factor contributing to the dramatic changes that are underway in the workforce -- in fact, in my view, the least important of three.  The two more important issues are the astonishing increase in life expectancy that we've experienced throughout the industrialized world over the last century, and the dramatic decrease in birth rates that occurs in country after country as the local economy develops and more women enter the workforce.  These two factors will be with us long after the Baby Boom bulge passes through, and are present in most industrialized countries today.  Together, they create a possibility for a workforce crisis (in the form of a shortage of available talent) in many areas of the world.

Possible strategies for tapping international labor sources
Morison: An international labor strategy might focus on countries with different (and younger) demographics -- India, Brazil, China (though so much is going on there -- the one-child policy with favoritism for males, eventual population shrinkage, the transition from an agrarian to an industrial base -- that the situation is very unpredictable). For these countries to emerge as talent suppliers for the world, they need infrastructure, both physical and educational. Brazil seems to be missing the opportunity. India and China are cranking out college graduates, which by sheer numbers makes a difference. However, much of their populations remain largely unaffected by the educational progress, and recent studies call into question the quality of the degrees granted. Fascinating developments all around.

Overlooked future market opportunities resulting from population aging
Erickson: I think there may well be some opportunities that are different than the ones everyone's been talking about so far.  Most of what you read re business opportunities to serve the Boomers in "retirement" assumes, not surprisingly, that the Boomers will "retire."  So the things most people focus on are business opportunities related to the use of leisure time -- travel, golf courses, hammock manufacturing, home projects -- as well as the inevitable focus on health care.
 
What if just a bit of my optimism re how Boomers will spend their time is more the norm?  That would indicate a host of opportunities around, perhaps, helping people start new entrepreneurial businesses (classes in entrepreneurship, accounting services for small business owners, distribution services geared at helping small business owners get their products efficiently to market, etc.).
 
There are very likely to be lots of opportunities related to helping older workers re-engage with more traditional employment opportunities -- retraining, career counseling aimed at figuring out your second career, placement agencies specializing in this age group's needs.  Across the workforce, I expect there to be a boom in "talent agencies" -- think of the film industry.  Fifty years ago, the big studios "owned" their talent, just as most corporations have full time employees today.  Now the talent is tapped on a project basis, via talent agencies, with the agencies increasingly putting together entire "packages" of talent in response to the needs of each film project.  I expect that model will spread to more categories of employment in many industries over the years ahead.

Education will be big across the board -- as I've mentioned, we're simply not educating our youth with the skills needed for tomorrow's workforce.  Companies are going to have to take on a significant educational burden, and many will prefer to do that through the expertise of an external provider.  Many people will look at learning as one of their greatest leisure pleasures -- I know lots of people who are looking forward to those classes in art history or the clarinet that none of us have had time for while working hard and rearing children.
 
And, what about my view that we'll see a renaissance of charitable work -- any business ideas there?  Ways to match people who want to give back to organizations that need them most?  You can see my line of thought -- the key, I think, is to look beyond the obvious leisure opportunities (which will be there, too -- no doubt) to also consider work-related opportunities driven by these changes.

Morison: We also mention in the book another widespread opportunity (for those who anticipate it) and eventual imperative (for the rest) for any business in direct contact with consumers. As the older population grows, retailers, for example, will be smart to have their sales and service staff reflect the demographic of their customers. Especially where the customer seeks trusted advice -- CVS/pharmacy has already figured this out. So there's an opportunity to employ experienced and mature people in service of their experienced and mature customers.

Newly emerging worker values that employers will want to understand
Erickson: Though it's critical to note that worker values will be incredibly diverse, let me be reductive here for the sake of brevity and usefulness and offer my personal view of three key values that are emerging.

1.  The re-surfacing of long-submerged questions re "has my life had meaning" -- One of the things we looked at in our work was how teenage experiences influenced each generational cohort's assumptions about how the world works.  When people hit "mid-life" what they are essentially doing is taking stock in their life thus far, and the extent to which they're on track to meet their teenage goals and ideals.  For many people who are hitting that reflective point today, the teen goals that resurface were ones formed in the wake of Watergate, Civil Rights, and Vietnam:  a strong desire for personal activism and recognition that the world needs to change.  More than their parents' generation, for whom upward mobility was more likely to have been a teen goal, this group is seriously questioning whether the way they've spent their life thus far has had the impact they wanted to have.  For employers, this often translates into a growing lack of emotional engagement with work -- a sense that more people are present in body only, with hearts and minds occupied elsewhere.  At the same time, the competitive challenges in many corporations are not ones that can be solved by people "going through the motions" -- innovation, collaboration are activities that require all hearts and minds to the fore.

2.  Tribal behavior -- Many people in the 35 and under age groups have a loyalty to their network of friends that many people over 40 find difficult to comprehend.  Coming from a generation who went where the company said to go, many older managers are astounded by younger employees who turn down opportunities for advancement if they mean relocating away from their "tribe."  I've seen this played out at every level -- from kids who won't apply to colleages that their tribe is not planning to attend, to a (young) CEO candidate for a major firm who declined rather than relocate.  This value, by the way, also links back to the teen experiences of this cohort -- working mothers and high divorce rates, created the first generation of what many call "latch key kids" -- teens who came to rely on their friends for significant support.

3.  Reduced desire for "responsibility" -- One of the statistics that I personally found most surprising came from some research done by the Families and Work Institute.  They do the same survey every 10 years; one of they questions they have asked is if you'd like a job with more "responsibility."  The answers have plummeted over the past decade!   Today only about a third of ALL women in the workforce say they'd like more responsibility, and only half of all men.  The most amazing cut of the data to me was by age:  in the under 23 category, the desire for more responsibility has fallen from (only) 80% in 1992 to an astonishingly low 60% in 2002.  On the surface, this appears to imply that 40% of all our 22 year olds are content with the level of responsibility they hold today!  Surely a much lower number than the percent of Boomers who would have had their hands up at the opportunity at that age.