What’s Wrong with America’s Job Engine?

What’s Wrong with America’s Job Engine? – by David Wessel

Wednesday July 27, 2011

 

And… CEOs in Their Own Words: Don’t Plan on Hiring – Willa Plank

 

In reading, both articles the winners are the temporary firms hiring folks for ‘just-in-time’ needs and those with college degrees. Yet that doesn’t explain the entire trend of what to do with the ‘Change’ in the demographics of our workers. Employers are also saying they can’t find the needed skill here in the U.S. In the past, several years since this financial debacle meltdown began people have returned to Universities, Community Colleges and updated their skills. What is it that the American worker is missing for skills?

If I were a betting person, which I am not – I would say it has more to do with the geopolitical and worldwide economics than the skill set of the American worker. America still has top talent, yet can this talent compete worldwide at a price that the market currently is demanding? As mentioned in previous articles the burn out factor is significant in those who currently have jobs. People are working at the top level of their productivity and compensation is stagnant. The question we hear is how can we increase productivity in the American worker?

The answer is hiring more people, as the current people are tapped. The productivity can only be driven harder by incurring additional workers. The slogan is ‘doing less with less’ not ‘doing more with less’. Those working today are doing less with less as the productivity margins are at the tip point, and unless tipped the break-even state remains.

That brings us to the big question of change, no one likes it, especially when key motivators such as money, bonuses, perquisites, additional benefits hamper or benefit the change.

Will there be change?

This is a huge question and is truly to be answered by those in the C-Suite. The strategy and tactics that are employed have not significantly changed their motivators therefore their behaviors have not changed.

If we truly want the C-Suite to recognize the value of their employees as their competitive edge, the change then would begin with them. It is a rarer organization that has made any significant change in their own abilities to lead and receive compensation that shows they are changing with the times. Creative use of human capital is been through treating the worker as a product, to be used temporarily and just in time. What if the C-Suite was subjected to just in time hiring, would the end-results change in their organizations? I don’t know the answer to that, yet by continually changing leadership brought in from outside and promotions from inside the organization may yield more innovation and yes maybe more genuine concern for their employees.

…WSJ’s Willa Plank reports the nation’s CEOs do not see an economic recovery underway and do not plan to hire workers anytime soon. Also, over the past ten years, the American adult work force has dropped to 1983 levels. Photo: REUTERS/Lucy Nicholson

Over the past 10 years:

• The U.S. economy’s output of goods and services has expanded 19%.

• Non-financial corporate profits have risen 85%.

• The labor force has grown by 10.1 million.

But the number of private-sector jobs has fallen by nearly two million.
And the percentage of American adults at work has dropped to 58.2%, a low not seen since 1983.

Something else is going on, too, a phenomenon that predates the recession and has persisted through it: Changes in the way the job market works and how employers view labor.

Executives call it “structural cost reduction” or “flexibility.” Northwestern University economist Robert Gordon calls it the rise of “the disposable worker,” shorthand for a push by businesses to cut labor costs wherever they can, to an almost unprecedented degree.

No one talks about that any longer. Between the end of 2007 (when American employment peaked) and the end of 2009 (when it touched bottom), the U.S. economy’s output of goods and services fell by 4.5%, but the number of workers fell by a much sharper 8.3%. Today’s puzzle: How and why employers managed to boost productivity, or output per hour of work, like never before during the worst recession in decades?

In a survey of 2,000 companies earlier this year, McKinsey Global Institute, the think tank arm of the big consulting firm, found 58% of employers expect to have more part-time, temporary or contract workers over the next five years and 21.5% more “outsourced or off-shored” workers.

“Technology,” McKinsey says, “makes it possible for companies to manage labor as a variable input. Using new resource-scheduling systems, they can staff workers only when needed—for a full day or a few hours.”

More
CEOs Say Don’t Expect Much Hiring
Business Leaders Press for More Work Visas
In Their Own Words: Executives on Hiring

Even though the government counts 4.68 unemployed workers for every job opening, some employers insist they can’t find workers with the skills they need at wages they can afford.

Write to David Wessel at capital@wsj.com

CEOs in Their Own Words: Don’t Plan on Hiring – Willa Plank

By WILLA PLANK
Wednesday July 27, 2011

The CEOs are speaking. And the message isn’t encouraging: Don’t expect many new U.S. jobs anytime soon.

WSJ’s Willa Plank reports the nation’s CEOs do not see an economic recovery underway and do not plan to hire workers anytime soon. Also, over the past ten years, the American adult work force has dropped to 1983 levels. Photo: REUTERS/Lucy Nicholson

These executives remained consistently cautious. They were willing to invest only in growth businesses or international markets, largely Asia.

Some of the most optimistic remarks came from temporary-staffing and labor-outsourcing companies. Much of this growth actually represents a negative for the overall jobs picture, as many of these posts represent short-term demand from other companies that are too cautious to hire full-time workers.

And even then, much of the growth is coming abroad.

Write to Willa Plank at willa.plank@dowjones.com

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About Linda Savanauskas

An accomplished talent management professional with experience in curriculum design, development of learning strategies, and professional skills development training programs for the workplace. Collaboration in training programs includes small and medium size businesses (SMB) to larger organizations from Raleigh to Charlotte, North Carolina. Virtual instructor led training can be offered to any location.


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