Last updated on September 18, 2024
Forbs recently published an article about the current talent shortage facing businesses. It didn’t have much new to say, except it added context to the size and scope of the problem. Finding skilled workers is a huge problem facing businesses in the US and across the globe. The article hints at the root cause and where the solutions lie but never makes it clear.
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Where is all of the talent?
The talent shortage should not be a surprise. While the media has focused on overpopulation for the last half-century, world population growth has declined during this time. All developed nations have fertility rates below replacement and rely on immigration for population growth. Additionally, young workers are not participating in the workforce at the same rate as in the past. Compounding the problem is the complexity of modern business, which requires employees to possess and constantly improve complex skills. It is not surprising that there are fewer young workers available to replace older workers as they retire.
The article mentions but does not explore the large number of older workers who leave the workforce due to unemployment. The media has largely ignored this phenomenon, despite falling labor participation rates and underemployment among older workers. Human resources departments have failed to make use of this large and productive labor pool. I think that there are three reasons for this.
Why are older workers not working?
Let me get to the most controversial reason right away. Age discrimination is acceptable in human resources, especially in technical positions. While businesses have been diligent in addressing discrimination based on race, gender, and sex, age discrimination is integral to the talent search process. Human resource processes such as creating job descriptions and evaluating resumes eliminate older workers from consideration.
How we create job descriptions is a big part of the problem. Human resources software has become keyword-oriented to make it easier to weed through thousands of resumes. Great for finding specific technical skills such as proficiency in a programming language, keyword matching is terrible at figuring out expertise. For example, a programmer who knows a large number of computer languages can most likely learn new ones easily, and it is advantageous to know idioms and design patterns and how they are applied in different domains. To address the talent shortage, human resource departments and their software tools need to develop a deeper understanding of business problems and how to find talent that possesses hard to describe skills.
Lastly, older workers have higher salary expectations than younger workers. This can often be justified by their increased productivity, but not always. Businesses need to find ways to compensate older workers for their experience and expertise without breaking project budgets. Flexibility and reduced hours are two ways to provide value to older workers, which would make lower salaries more appealing.
Experienced workers must be part of the solution to the talent shortage
The talent shortage is severe, and it is affecting living standards and economic growth. If we ignore the most talented and productive section of society, we will never resolve the talent shortage. There is no collective solution that will bring older workers back to the workforce. Each business needs to examine its human resources processes to eliminate barriers to hiring experienced workers. Open positions reduce production and adversely affect corporate financial results. The companies that address talent acquisition are going to have an advantage.
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