Skill Shortages, Leadership and
the Labour Market
International/Australian Trends
Human Capital
Paul Baker
Director
Federal and NSW Government, Education, and Public Health
Hudson
May 2007
Major Franklin and the
Importance of Silver (19 Century)
Global Labour Shortages
Global Labour Shortages
Unemployment Rates for Key Economies
Netherlands
6%*
Canada
6.4%
Sweden
5.6%
United
Kingdom
5.3%*
France
10.1%
United States
4.7%
Portugal
6.5%*
Brazil
11.5%
Note:Periods vary
Source: Quickseek (August
2006)
Germany
10.6%
Japan
2.4%
Austria
4.4%
Australia
4.6%
New Zealand
3.6%*
Labour Force Growth will
Slow to a Crawl
Compound Annual Labour-Force Growth Per Decade
3
2.6
2.5
2
1.7
1.6
1.5
1.2
1
0.8
0.8
0.5
0.4
0.2
0.3
0.2
0
s
0'
5
19
s
0'
6
19
s
0'
7
19
s
0'
8
19
s
0'
9
19
Data: Watson Wyatt Worldwide 2004
* Projection
s
0'
0
20
s
0'
1
20
s
0'
2
20
s
0'
3
20
s
0'
4
20
s
0'
5
20
0.2
Declining Employee Tenure
25
20
15
10
5 Depression
Survivors
0
50's
60's
Pension
Seekers
1/3 in Jobs Less
Than 2 Years
“Free Agent
Nation”
Victims
70's
80's
2/3 in Jobs Less
Than 5 Years
Source: U.S. Department of Labor (BLS) Employee Tenure Surveys, 2004
90's
00's
½ Employed on
Interim or
Contract Basis
Powerful Forces Drive
Human Capital Pressures
Human Capital
Drives Corporate
Retiring
Baby Boomers
Globally Deployed
Work Force
Movement to
Knowledge Economy
Human Capital
More Transient
Labor Pool
Acute Shortage of
Skilled Workers
Shortening Technology
Life Cycles
Australia has a Number of
Unique Characteristics
•
Significant change in the Australian labour market in the
past decade:
10.5M…………….
“Australian Workers”
7.35M (70%)…….
“Permanents”
3.15M (30%)…….
“Contractors/ casuals”
growing at 2-3% per annum – 60%p/t;
14%f/t (as at June 2006 est.)
•
If trend continues by 2015 the majority of Australian
workers will be contractors/casuals
•
Over 2.25M (22.5%) Australian workers change their job
each year- internal /external changes
The bottom
Theline……..
bottom line
Where precisely is the Australian labour
market heading?
What are the timelines?
Why should we be concerned?
Looking Forward: Growth in population of working
age
3
2003-04
Per cent
2.5
2
1.5
1
0.5
0
1944-45
1964-65
1984-85
2004-05
2024-25
2044-45
Evolving Job Market
EVOLVING JOB MARKET
MARKET DEMAND
WORKING POPULATION
BABY BOOMERS
RETIRING
2002
2007
X and Y GENERATION
X(29-41yrs) and Y(17-28 yrs) Generation
Are there significant generational differences?
Where and how will this affect the supply of
labour?
Where do the “baby boomers” sit in all of this?
“Skill Shortages, People Management and
Leadership”……what is possible and
which directions should we consider?
The Equation-a framework
•
“Increase” the supply of people.
•
“Decrease” (prioritise) positions
•
Improve the “matching” process.
(All possible strategies and responses fit under one of
the above)
Increase Supply of People
Supply Measures –(Indicative examples)

“Valuing” existing employees-new benchmarks in
retention, incentives and conditions….. (major piece of silver)

Innovative sourcing and mapping candidate
communities; Talent Pools; Search Strategies

Institutional linkages -University/tafe/Schools

Increased Marketing –Media and Celebrities

Internal Mobility -valuing/retaining workers

Integrated “Solutions”

Recruit to “culture” and “attitude”
Demand
Demand Measures-(Indicative examples)
• Recruitment – In house first option -Valuing existing
workers/ easier access. Then to “Broker”
• Significant continuing Growth in Contracting /
flexible work patterns
• Employment Brand-value proposition
• Management “Talent Pools”; Managed /Master / Other
Vendor strategies
• Outsource-In House – A major trend
Increasing pressure on Wages and conditions- need to
reward those employers who train and educate (e.g. through
the taxation system) tax those who do not.
Improve “Matching”
Better Matching – (of people and positions)
If people were placed one day earlier in 2004 - have returned
$3000 million to the Australian economy.
• Continuing growth of technology partnerships with
Human Capital services
• Relationship with Human Capital Services extends
to “in-house” all employees
• Greater need to coordinate and sequence match
training with internal/external work experiences.
• Importance of vocational training- enhanced fit to
prospective job in recruitment process before and
after.
Skill shortages……….
• Require responses from each of the forgoing
categories…
• Applied to your situation
(Major piece of silver)
What type of leaders do we require? What strategy?
Leadership … McKinsey Research
INNOVATION (a highly desirable and sought after quality):
• Requires a “whole of workforce” commitment
• Workers require “quality improvement” and “transfer of
skills” to be rewarded…….without fear of losing their jobs
• With four generations in the workforce…..communicating
effectively (to all four equally) is a necessary major
challenge for anyone aspiring to lead
What McKinsey Research is saying
Strategies and Responses …………..
• The right leaders convince people opportunities are worthwhile
• Success depends on the whole leadership team
• “Heroic Leader” is a myth
• Focus is on: activities fostering team action; channelling team
discontent; minimising intrusions; and encouraging reflection
• Developing internal talent………moving non producers out of
leadership positions
What McKinsey Research is saying
Managers of People and Leadership Teams:
• Must be trusted and respected throughout the organisation
• Inspire and command
• Listen with an open mind; consistently truthful; becoming more
approachable
• Leadership Teams require a common direction; shared
understanding of goals and values; a capacity to expand
capabilities in response to change
Words/Phrases most frequently used…………
• Visionary
• Inspirational
• Trusted
• Truthful
• Respected
• Consistent
• Leadership “Teams”
• Internally developed
• Communication – across all generations
A reality check!
• So you have all these qualities, your people are
highly trained and motivated, and the team is a “well
oiled machine”………..
• Are you bullet proof?
The Reality
• “Valuing” your existing workforce has just taken on a whole new
dimension.
• “Leaders” at anytime have… capacity to “inspire” and “focus”
the talents of many different people.
• Economic conditions and the need to survive are going to
demand a greater attention to these issues than organisations
have experienced at any point in their existence.
• The issues compound for geographical areas outside of major
labour supply areas.
If you were able to take anything with you from the
present and transport it to 2010 as improvements in
the supply of Human Capital …….
What “Silver” would you take?
What would be your priorities?