The Future Work Force

Some I/O psychologists measuring workforce trends fear a shortage of labor and talent; others see an increase in global job mobility.

A “demographic time bomb” is ticking as baby boomer retirements head toward a collision with declining worldwide birthrates, according to some industrial/organizational, or I/O, psychologists. That collision, they say, will produce unprecedented labor and talent shortages, the beginnings of which are already being felt.

These shortages “will be the major force affecting workforce composition” in coming years, warned psychologist Fredric D. Frank, chief executive officer of Talent Keepers, an I/O employee retention firm.

The US Bureau of Labor Statistics has projected that from 2002 to 2012, the American civilian labor force will increase by 17.4 million, or 12 percent, to 162.3 million — with the strongest growth in education and health services, and manufacturing continuing its slide from dominance. Meanwhile, according to a 2001 report by the American Immigration Law Foundation, by 2008 the marketplace will have 6 million more jobs than people to fill them.

The net effects, Frank said, include far less discrimination based on age, race, gender, or sexual orientation, as well as the elimination of the “glass ceiling” that has restricted women’s rise into leadership. But these effects also include a scarcity of solid managerial talent and of workers at all levels, and the end of employee loyalty.

“Nothing looms larger on the workplace horizon than employee retention and turnover due to the labor and talent shortages, coupled with the erosion of trust in the workplace resulting from years of layoffs, outsourcing, and corporate scandals,” Frank said. Add in the transition to portable pensions and an improving economy, and “the workforce is poised to walk out on employers in an eye-blink. It is being felt on a global level.”

“The outlook is not that bleak,” countered Marta Perez, associate director of the Office of Personnel Management’s Division of Human Capital Leadership and Merit System Accountability. Perez’s office tracks workforce data for the US government — at 1.8 million civilian workers, the nation’s largest employer. Still, Perez said, “We’re taking the need to recruit new talent seriously. We think there are opportunities for government to do a better job seeking talent” to counter the increasing mobility of employees, who are learning as early as college the value of playing the field.

Michael M. Harris, University of Missouri-St. Louis, who holds a PhD in I/O psychology, said he is also “a little skeptical” about impending labor shortages. He has heard the warnings “for the last few years, but they haven’t materialized yet. Instead, we’re sending jobs overseas and bringing in workers from other countries.”

Harris, who writes a “Global Trends” column in the newsletter of the Society for Industrial and Organizational Psychology, an APS Organizational Affiliate, conceded that some industries — manufacturing, health care, and communications, in particular — will see greater demand for workers than supply in coming years, but increasing automation and global mobility should counter some of that.

“Just because I’m born in the US doesn’t necessarily mean I have to live here all my life,” Harris said. “And just because someone was born in China, it doesn’t necessarily mean they have to live in China all their life. There’s much more mobility now.”

In fact, globalization, automation, and the Internet revolution were three trends that can be considered universal. “Technology will continue to infiltrate nearly every facet of the workplace,” Harris said. Internet-based recruiting and hiring “are exploding,” and the use of “webinars” and e-learning “will continue to grow exponentially.”

Globalization has special consequences for I/O psychologists. “I/O is a product of North America,” Harris said, “but it’s changing, becoming more international. Far too much work is being ‘off-shored’ for us to relegate ourselves only to North America. I/O psychologists will themselves increasingly become part of teams, task forces, and partnerships with people from other countries and cultures” and help develop business leaders with the skills needed to succeed in the global marketplace.