A couple of weeks ago I served on a panel for the Federal Reserve Bank of Atlanta discussing some issues surrounding the impact of the recent recession on the chronically under-employed and unemployed.\u00a0 The following is a summary of what I shared.<\/p>\n
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First, we need to understand the concept of full employment and why a 6% to 6.5% unemployment rate is considered full employment.\u00a0 When our working population reaches these levels, while there are some people who are in transition (family member transferred, finishing school, etc), the majority of this group are people who do not possess the kinds of skills that are necessary to hold a job.\u00a0 These skills fall into two categories, the first being Technical skills\u00a0 These are skills ranging from low-tech, such as welding and heavy equipment operations, to mid-tech, such as machining and manufacturing machinery operations, to high-tech, such as computer software development, medical, and bio-science.\u00a0 These skills can be acquired on the job, but in a labor market where there are plenty of employees looking for work, most employers aren\u2019t willing to make this kind of investment.<\/p>\n
The second type of skills provides a potential employee with the ability to acquire the technical skills. \u00a0These are Fundamental Skills, and include: basic reading, writing and math skills; interpersonal skills; and basic safety awareness skills. Research by McBassi & Associates reveals that those organizations investing in these types of training see the biggest return on their training dollar investment.\u00a0 This isn\u2019t surprising, especially when according to the National Adult Literacy Survey (NALS) conducted by Educational Testing Service indicated that 40% of the workforce population have literacy skills that are at or below high school levels.\u00a0 There is no surprise that this corresponds to our national graduation rate of roughly 30%.\u00a0 Furthermore, the NALS research found that those who were unemployed were more than 7 times more likely to have lower literacy levels than those who were employed.<\/p>\n
So given some of these numbers it isn\u2019t surprising that we would have a population that would tend to experience long-term unemployment.\u00a0 As our work world becomes increasingly complicated, with even simple jobs requiring rudimentary computer skills, menial labor jobs become increasingly scarce.\u00a0 When people lack the basic skills needed to acquire the technical skills needed to do a job, then even on the job training isn\u2019t an option.<\/p>\n
Now let\u2019s take a look at some of the labor history that led up to the recession and beyond.\u00a0 As I shared in a previous post (see The War for Talent Continues<\/a>), in the mid-2000\u2019s we were looking at a looming shortage of employees by the time we would get to 2010.\u00a0 The War for Talent was at full tilt, as employers were scrambling to fill positions with good employees.\u00a0 Unemployment dipped down to 5% and stayed there, and in some states it even dropped down into the 4% ranges.\u00a0 Given the theory of full employment, this meant that many people who simply did not have the skills necessary to hold and keep a job were employed.\u00a0 But with a hot economy, employers needed people to fill positions, often not being picky about whom they hired.\u00a0 But as employees struggled in their jobs they often just moved on, moving from job to job as employers continued to hire unskilled labor and was unsuccessful at training them.\u00a0 These workers simply moved on to the next employer.\u00a0 That is, until the recession hit.<\/p>\n As economic conditions worsened in 2007 and 2008, employers began shedding positions and workers.\u00a0 At first, it was indiscriminate, as skilled and unskilled employees alike were let go.\u00a0 As the situation began to stabilize, employers realized that they still needed skilled employees to keep their operations going.\u00a0 They began to scramble to find those key employees, and even with the unemployment rates hitting above 10% around 2010, employers still could not find the skilled employees that they sought.\u00a0 The prediction that we had made about 2010 was coming true, but for entirely different reasons.\u00a0 It wasn\u2019t because there were more positions than employees to fill, but rather that there were too few skilled employees to fill the positions that were available.\u00a0 As a result, the War for Talent really never stopped, and is still raging.<\/p>\n With an unemployment rate today of about 7.5%, we continue to edge closer and closer to that full employment rate, which may be at a higher level now that most jobs require some level of technical skills.\u00a0 But as researchers from SHRM suggest, as the millennial generation increases its numbers in the workforce we see this generation having a much greater number of minorities in this age group.\u00a0 Unfortunately, minorities have a far lower graduation rate, leading to a larger proportion of workers having lower levels of Fundamental Skills.\u00a0 While some school systems are attempting to increase interpersonal skills, until we also increase literacy skills employers will still be scrambling to find good employees who they can provide on the job training for the technical skills.<\/p>\n So what can an employer do to find and keep the highly skilled workers that it needs?\u00a0 First, it needs to realize that recruiting doesn\u2019t start when a position becomes vacant.\u00a0 No matter what size you are, you should constantly be looking for good people that you might like to ask to join your organization in the future.\u00a0 Don\u2019t just look for those who are currently in the workforce.\u00a0 Get creative.\u00a0 Look for those who might be physically challenged (see the Business Leadership Network for help in this area; www.usbln.org<\/a>).\u00a0 Look for those who are just starting college by networking with college career centers.<\/p>\n Get involved with your local school districts.\u00a0 Look way out into the future of your organization and share your concerns, along with other employers with your school district. \u00a0Go to career days at high schools and middle schools and encourage students to take the classes that will allow them to work for you.\u00a0 Maybe even higher some students part-time and insure that they actually do learn those skills by teaching them to them yourself.\u00a0 I know that I learned a great amount from my experience working part-time as a student from the time that I was 14 until I graduated from college, with some of that experience even still helping me today.<\/p>\n Finally, create a workplace that is a place where employees want to come to work and stay with you.\u00a0 Pay them well, but don\u2019t use pay as a method to attract employees.\u00a0 Higher pay and benefits aren\u2019t what attract the best employees, although you do need to be competitive.\u00a0 If you compete on these areas alone, then you must be the best, and you will only keep your talent for as long as you pay the best.\u00a0 What\u2019s worse is that they won\u2019t be performing at their best all the time, because pay is their only motivator.\u00a0 The best organizations do pay well, but typically in the 60th<\/sup> percentile of all employers<\/p>\n Instead of relying on pay to attract great employees, the best organizations engage employees by offering them great work in a great work environment.\u00a0 What do you have to do to accomplish this? Put People, not profits, first in your organization.\u00a0 When you put People first it is amazing how much more profits you will receive.\u00a0 Build Trust with your employees.\u00a0 Provide challenging work.\u00a0 Make a connection from what people do to what matters to them and what they do best.\u00a0 Knowing that their work is important and makes a difference is critical for getting employees engaged.\u00a0 Give them an opportunity to grow, and allow them to make the important decisions about their jobs.<\/p>\n These approaches leverage the Diamond of Engaged Performance\u2122, a sub-set of elements from the Seven Elements of High Performance\u2122.\u00a0 It allows you to find the employees you need today while also focusing on the future employees you will need for tomorrow.\u00a0 You must get involved and take an active, intentional approach to dealing with the War for Talent, as I don\u2019t see it diminishing any time soon.\u00a0 As the unemployment rate continues to drop, this is going to be the only way to compete in an economically viable way.<\/p>\n Make a Great Day!<\/p>\n","protected":false},"excerpt":{"rendered":" A couple of weeks ago I served on a panel for the Federal Reserve Bank of Atlanta discussing some issues surrounding the impact of the recent recession on the chronically under-employed and unemployed.\u00a0 The following is a summary of what … Continue reading