Dear Members:

Though workforce management typically falls under the realm of human resources, it’s still a vital component of a CEO’s strategic planning process, and there’s a human resource issue that has been on my mind lately. I recently watched an insightful webinar by Ron Hetrick called “The Demographic Drought.” Packed with insightful data, Ron outlines the demographic dilemma businesses are beginning to deal with and the implications this will have on the future of the workforce nationwide. He discusses at length how the decreasing labor force combined with the declining birthrate means that the current population is not being replaced.

What this means for organizations like yours and mine is, in short, that the employee pool will keep shrinking, and we need to prepare to adapt to this challenge. In other words, we need to begin strategic planning for the recruitment and retention of employees and to recognize workforce planning as a strategic business issue because it will impact what our organizations can achieve for years to come.

But how do we even begin to tackle such a large issue? In recent discussions with my human resources staff, we’ve identified a few areas of focus to help mitigate these challenges, which I hope you will also find helpful. 

Think about how to improve current business processes via technology/automation. Though this step may take a little time, reducing manual, time-consuming work with automated processes will allow for growth without the need to continually add to our workforces. In the short term, it will be helpful to ask ourselves a few questions about the effectiveness of our processes: What can be streamlined or eliminated? What can be automated? Is there technology we can invest in that will save a significant amount of time and free up our employees’ resource time?

Think more flexibly about employee recruitment and development. This may look different for every organization, but I believe there are a few recurring themes to consider. For example, HR departments have traditionally expected that an applicant must meet every one of an open position’s extensive list of requirements. But with the labor shortages we’re facing, perhaps now we prioritize an applicant's growth mindset traits, such as curiosity, adaptability and positivity, rather than an overly long list of technical knowledge and/or specific skills. In addition, we should be looking for employee growth opportunities internally, identifying future leaders and investing in developing the knowledge and skills that we will need from their position in the coming years. And finally, our organizations can find creative ways to hire additional staff by leveraging experienced professionals on a part-time or consultative basis.

Think differently about human capital. Retention of good people, i.e., engaged employees, is critical. Like never before, we need to view our human capital as valuable resources, listening to them and partnering with them to achieve business objectives. This includes competitive compensation, employee preferred benefits, continual communication, managers’ leadership capabilities, a healthy and respectful culture, and the ability to differentiate ourselves as an employer of choice.

It’s important to keep in mind that this demographic dilemma is not a temporary issue. The success of overcoming this challenge is dependent upon almost every aspect of human resources and will be accomplished through the C-suite and business managers’ efforts. Though there’s not a one-size-fits-all answer to this dilemma, and we exist in an ever-evolving business environment with competing business priorities, I believe those organizations that invest time, effort, and money to implement and adhere to these new ways of thinking will be more successful at retaining their workforce and achieving their business objectives.

Best,