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A non-IT specific article debunking the labor shortage myth
Submitted by softwarejanitor on Wed, 08/27/2008 - 3:58pm.
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What Labor Shortage? Debunking a Popular Myth
http://knowledge.wharton.upenn.edu/article.cfm?articleid=837
Its an older article (2003), but all the points in it still seem to be valid. It does a good job of pointing out one of the underlying mistakes most people make -- that of overestimating the effect that baby boomers hitting the traditional retirement age will have on the size of the labor pool.
This is especially true given the number of boomers who will not be able to retire even if they want to because their savings have been largely wiped out in 401k and other investment losses due to either the 2001 crash or the current real estate and financial industry meltdown. What hasn't been outright lost is also being shrunk by rising inflation too.
Boomers who don't retire and keep their talons in their executive and management jobs means that Gen-Xers will have to similarly try to hold on to what we've got provided we don't get age discriminated out, which will further ripple down to the Gen-Yers and after as there will be fewer entry level opportunities available to them.
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This is the key paragraph from the entire article:
If there is no impending shortage of labor, why do employers feel that the tight labor market of 1998 to 2001, when companies faced the challenge of finding workers and wages rose sharply, somehow represented a major shift from what they had known before and presaged a bleak future? One reason, Cappelli believes, is that the pressure to hire laterally from the outside to bring in new skills, which was accelerated during the late 1990s, is a new development in the history of human-resources management. The breadth of jobs that today are filled from the outside – ranging from the mailroom all the way to the CEO’s office – stands in stark contrast to years gone by when recruiting was almost entirely focused on entry-level positions. An increase in outside hiring contributes to higher turnover, which forces employers to be in a state of continuous hiring and gives rise to the feeling that there is a shortage of workers.
When I entered the full-time workforce in 1998, I was under the illusion that I would eventually be promoted up the ranks. Then I learned much later that I was stuck where I was, me and my fellow engineers had no chance of doing anything other than what we were already doing. Some guys had been there for 15 years, and didn't move up an inch....not because they weren't capable, but because they weren't even considered.
It's like your PC: If there's no upgrade path, the PC is doomed to be discarded.
I definitely agree, not only do employers not want to invest in building employees to advance (by assisting with training or allowing more senior people to mentor), they seem to prefer to hire in ready-made employees or use contractors to bring in new skills rather than let employees learn on the job or apply new skills they've learned on their own time. They would prefer to allow existing employees to become "outdated" and discard them than let them advance. I think this is often a calculated move to try to control payroll costs. It also is a result in many cases I think on fears of people above that ambitious underlings may advance and challenge them. And then there are the fears that if companies let their workers learn and advance themselves that they will lose that investment because the employee will get hired away. That argument is particularly short sighted in my opinion because employees who aren't allowed to get ahead will often leave anyway if they have a chance. I think the article has it exactly right that employers mistake constant churn due to their own policies as there being a shortage of workers. Its probably especially bad for companies that are of the "binge and purge" type or high pressure environment that quickly deplete their area of people who haven't already worked for them. Companies like Dell are examples of the former, and companies like Microsoft the latter.
The job market has changed. Before people were expected to be loyal to employers, and had a chance to rise up from within the ranks in return. Nowadays the best and often the only chance to move up is to switch jobs.
As for a chance to learn and advance - it's really a perk. Some employers offer it and attract a better quality and therefore more expensive workforce, and others choose to go with a bargain version. It is really up to each person to choose for themselves.
If only there was much choice for tech workers these days. With the lack of opportunities out there, most of us just can't afford to be picky. We've pretty much got to take what we can find and make the best of it. Back before the crash it was so much easier to change employers to find ones that treated people better, and there were a lot more opportunities in general.