HRevolution

In the last post, the CEO of Manpower predicted that businesses will fail for lack of planning ahead for the talent shortage. It’s his job to create a market for his services. Spreading fear about how rough it will be is a ploy. While he may be adept at running a staffing firm, his approach belies a lack of understanding of how businesses behave. Instead of taking his ‘sky is falling’ to heart, what do we think will happen in the talent shortage?

First of all, we know businesses adapt to changing conditions. To think that managers assume the same models that are effective today will work as well tomorrow is folly. Companies have adapted quickly and effectively to changes in financial models, disruptive technologies, logistical improvements and customer preferences. Businesses adjust all the time. That said, they don’t have all the answers to how to deal with a long term labor shortage – nor do they claim to. Business, at it’s core, is opportunistic, and can’t stand being reliant on dwindling resources. It will seek alternative methods, models, and resources. The one thing we can be sure of is that companies will adapt.

What does adaptation look like? Automation of every possible piece, outsourcing pieces that are labor intensive. Taking the company elsewhere (where the shortage is less severe), expanding immigration to ease shortages. These are things that can be done that we already know. In business, historically the mother of invention is necessity. Business hasn't felt the necessity yet, and so we haven’t seen much invention.

From a Manpower survey we’ve learned that “employers are not just looking for bodies to fill sales jobs, they want experienced sales people who know their respective industries and can drive revenues.” Sure, we all want people who can show up and make us money. We want lots of things. The survey says so. It doesn’t say we’re entitled to them. It doesn’t say what we’ll do when we can’t have them. It doesn’t say the economy will fail if we don’t get them. Here’s a thought, today’s just-in-time hiring approach presumes an endless supply of trained, experienced people. If you can’t just buy those folks, where do they come from? Hmm. Maybe companies will have to train their own people. Maybe an employment relationship lacking in commitment or investment in human capital won’t work in the future.

Mr. Joerres' prediction that businesses will fail for lack of the right talent also states the obvious. It happens all the time. Many companies succeed or fail today based on the behavior of managers or executives. Failure to get the right people at that level often results in the demise of a company. While failures are often cloaked in mergers or acquisitions, they are failures. What’s new in Joerres’ report is that failure to get the right people won’t be limited to executive ranks, but widespread among line workers. And, yes, that will be new. Services depending on people will slow, and quality will slip. We will require new and creative methods to approaching human capital. And, given the lack of ingenuity applied to this precious resource, the labor shortage should produce some long overdue creativity.

Interestingly, the article points out that staffing firms show increased profits in this labor shortage (like oil companies during gas shortages). In response, Manpower has “refreshed it’s brand and streamlined it’s activities” focusing on higher margin markets. Manpower can wail doom and gloom all the way to the bank. But who cares? The sky isn’t falling. It’s just another round of change. My money is on business, and it's capacity to change.