Last week the U.S. Labor Department reported that employers added almost 200,000 jobs in February. This means the unemployment rate is now 9%, at least temporarily. Frankly, these unemployment discussions distract attention from what is really a more important problem for many executives. That is, the increasing complexity and prevalence of critical skill shortages.
For example, in nursing one byproduct of the recession is young nurse graduates are having a hard time finding good jobs because veteran nurses are working longer than expected. As a result, according the nurse executives I’ve interviewed recently, potential replacements for older nurses are now pursuing other careers and not using their training. This is only going to exacerbate the skill shortage in nursing, which will come when those experienced nurses do eventually retire.
Shortages exist today in jobs ranging from residential electricians, actuaries, systems engineers, nuclear physicists, nurse managers, and primary care physicians. The shortage of young talent in each of these roles is being created by a different combination of factors, such as:
- Time to train replacements
- Economic incentives
- Attractiveness of the field to younger workers
- Resources available for mentoring
- Recruiting practices
One problem with high unemployment numbers is they feed management’s uncertainty about economic trends, which makes some employers reluctant to hire younger workers. These new hires should be in the pipeline now training to take over future high-skill jobs and leadership roles. When new jobless figures grab your attention in the months ahead, there are at least three things to consider:
1. Unemployment numbers are irrelevant to the real risks that critical skill shortages hold for your organization’s performance?
What are the risks if a lot of your retirement-eligible older workers or disgruntled mid-careers suddenly depart? What capabilities or competencies would be seriously degraded? Do you have an accurate read on your staff’s level of engagement and the likelihood they will stay when the economy really does improve? We know some big organizations that are holding their breath over all those boomers piling up at the door, temporarily delaying their departure. What if they all go at once?
2. Have you made explicit plans to transfer capabilities from key veteran workers who will leave sometime?
Are you clear about the performance risks created around the loss of specific capabilities? We’ve recently used a new tool called the Knowledge Silo Matrix very effectively with clients in a number of industries to pinpoint these risks and to reduce the costs of critical knowledge loss. This allows the development of a much clearer road map for knowledge transfer.
3. How do you know that your existing initiatives to address potential skill shortages are working effectively?
In our recent research on talent initiatives, more than 70 interviews with senior executives and top talent experts revealed that few have effective measurement systems to evaluate these essential programs. We suggest a variety of solutions to measurement problems in our new book The Executive Guide to High-Impact Talent Management.
One of the first steps is to make sure you have defined recruiting, onboarding or knowledge transfer results, for example, so they are detectable or observable in some way. If the results of your program aren’t detectable then they aren’t worth investing in. (This insight came from our favorite measurement guru Douglas Hubbard.)
The recent rise in long-term unemployment is a tragedy in this country. My company has invested considerable resources in identifying solutions for this problem, which is particularly difficult for older job seekers. But skill shortages became virtually undiscussable during the recession, even though they have not gone away. Contact us for more ideas on how you can improve your retention of critical capabilities.