Working in the 21st CenturyAccording to the traditional view of the American dream, a person grows up, goes to college, takes a job in his preferred career, works a lifetime while making contributions to both his business and his society, and then retires to enjoy the fruits of his labors.
There are still some places where that pattern holds true. Large academic institutions, for example, offer tenure, lifetime employment, and full retirement and health benefits. A high school graduate can enter the military, earn degrees, rise in rank, and receive retirement benefits after 20 years of service.
But the traditional working path has changed dramatically in most places. For example, some jobs are simply vanishing, perhaps never to return. According to a recent report from the Bureau of Labor Statistics,1 there will be 150,000 fewer American farmers andranchers by 2014, as large corporations take over the business of providing the nation’s food.
Stock clerks and employees who fill orders are being replaced by supply chain innovations, such as RFID tags and other automated technologies. Mail clerks, mail-machine operators, and parts sales staff will also be replaced, as electronic tracking and ordering become mature technologies.
Off-shoring is replacing traditional U.S. jobs such as sewing machine operators, while computer operators, who still run the larger, more complex mainframes, will eventually be made obsolete by newer, more intuitive designs. Those same intuitive designs are putting secretaries out of work, as their bosses choose to use their own computers instead of dictating.
And some 22,000 meter-readers are fast being replaced by transponders that communicate customers’ utility billing information to satellites for relay to the electric and gas companies.In other areas, however, the demand for workers is booming. According to the Herman Trend Alert,2 the demand for skilled and educated workers in the field of energy and power generation is about to explode, as demand increases in China, India, and elsewhere. Engineers, technicians, and heavy machinery operators are in short supply, pressing the energy industry to its limits. Plants that make windmills aren’t operating to full capacity because of an inability to find workers to manufacture the blades that produce the power.
As more capacity is required, design and construction engineers, as well as production and operations specialists, will be in great demand. The shortages run deep into many industries. Across the globe, skilled construction workers and tradesmen are needed.3 Electricians, plumbers, carpenters, welders, pipe fitters, heavy equipment operators, and civil engineers are all needed to fuel the boom in commercial and industrial building, home remodeling, and the maintenance or new construction of highways, bridges, electrical grids, and water or sewer lines. In short, the structures ? and infrastructures ? of the world are expanding faster than the work force. And any time a natural disaster strikes, it makes the shortage that much more acute.
At the higher end, there was until recently a growing shortage of doctors, due to the high cost of malpractice insurance and the litigious nature of tort lawyers. But with political change and recruiting efforts, the number of doctors is now rising, according to a report from the Association of American Medical Colleges.4
The class entering medical schools for the 2005-2006 academic year set a new record, with more than 17,000 students, an increase of 2.1 percent over 2004. The major increase in prospective doctors came from Hispanic and Asian applicants, with both ethnic groups up 8 percent over 2004.
However, nurses continue to be in short supply, according to a report from The American Association of Colleges of Nursing.5 There are almost 100,000 vacantpositions for nurses and a turnover rate greater than 50 percent. The cost of this shortage is estimated to be $4 billion a year. This is true despite the 185,000 new nurses that were brought into the system between 2001 and 2004. The majority of those were foreign-born. Many of the rest were nurses over the age of 50 who were returning to the workforce. This shortage, which is expected to worsen over the next decade, has led to a dramatic rise in salaries for qualified nurses.
Law school enrollment is also up, according to a 15-year study by the National Association for Law Placement.6 The new lawyers reflect more diversity than in the past. In 1982, when the tracking of law school demographics began, women represented 33 percent of law school classes, while minorities weren’t even counted. By 1997, women and minorities represented 63 percent of all law school graduates.
Another change in the nature of work is a growing population that has simply dropped out of the workforce.7 The largest group in this category are people who had been employed for more than 10 years and were laid off when their blue-collar jobs vanished. Many of these employees, particularly the older ones, simply don’t have the education or skills ? especially computer skills ? to re-enter the job market.
Many fell into a kind of “culture shock” in which they subsisted on food stamps, unemployment benefits, or family help, though most will eventually re-enter the job market at some point.A second group of the “voluntarily unemployed” consists of white-collar workers.8 In many cases, the frantic pace of the high-productivity and cost-cutting revolutions has left them burned out. With big severance checks, they feel they deserve a rest. Unable to find jobs up to their expectations, some stay out of the market for a long time, subsisting on home equity loans or 401(k) distributions.
Now that companies are having trouble finding qualified workers, many of them are using “strategic planning initiatives” to identify exactly what kinds of workers will be needed at various points in the future, and then preparing existing workers through training and education to fill those jobs. This eliminates the pain of laying off one set of workers, only to hire another set with a new complement of skills.
The Society for Human Resource Management released its 2006 study, the Access to Human Capital and Employment Verification Survey, which shows that 59 percent of companies are offering to pay for undergraduate education for employees, while 48 will help with grad school. In addition, in-house skills training and internships are on the rise.9
Another major change in the employment picture is the demise of pension plans. The Bureau of Labor Statistics recently reported that 61 percent of employees expect to receive traditional retirement benefits, but only 21 percent of them were actually involved in such a plan. That disconnect reflects the changing nature of the American dream.10
The Employee Retirement Benefits Research Institute says those benefits won’t materialize again, so today’s employees face a different kind of future that requires a new kind of planning. Companies from IBM on down are freezing or ending the so-called defined-benefit plans. Microsoft, Southwest Airlines, and JetBlue have no such plans. Verizon recently froze its plan. And new companies simply don’t institute them anymore.11
The needs of workers are changing too. Most will hold 10 jobs before the age of 40, so they don’t care about retirement the way they used to.Given this trend, we offer the following five forecasts for your consideration:
First, the nature of jobs in America will continue to change. Ever since the American economy began its shift away from agriculture and manufacturing and toward services and knowledge work, the nature of work has been gradually changing. We are now seeing the culmination of that change as it accelerates under the influence of a global economy. Expect this to continue as the nature of work is redefined.
Second, the global building boom will create a new class of elite workers who make significant six-figure salaries in what the old economy refers to as blue-collar jobs. For example, even today, supervisors on off-shore oil rigs can earn more than $100,000 a year. They work 14 days on the rig and then have 21 days off, which means that they’re on vacation for three-fifths of the year. This type of work, which is available worldwide, will create a burgeoning population in which consumer spending and household wealth are on the rise. That, in turn, will keep the economy growing.
Third, conflicts around the world will provide career opportunities. We live in an era where violence is common. But everywhere there is violence, skilled workers are needed to support those who are trying to establish or maintain the peace, as well as to rebuild infrastructure. For example, many workers going to Iraq earn more than $175,000 a year. If they stay 12 months, the first $80,000 is tax-free. This type of opportunity is going to create a new and growing job market, in which American workers can go abroad, earn a nest egg, and return home to rejoin the U.S. workforce with a new house or retirement fund in place. Entrepreneurial companies are already emerging to serve this growing class of workers. This movement, in many cases, can help to reestablish the American middle class on a stable footing.
Fourth, our entire educational system will undergo a shift in the coming years, as it becomes clear that we need a new generation of construction engineers, production specialists, operational leaders, and designers. A new emphasis will be placed on teaching math, science, technology, and communications. In addition, more attention will be paid to making sure that those students who go to college are taking the right career path, while others are trained in the scores of “skilled trades” that the world will welcome with open arms.
Fifth, novel working arrangements will continue to grow, as technology makes it less and less important to have synchronized activities in a centralized location. Except where the labor is physical or mechanical, much of the work in our service and knowledgeeconomy can be accomplished, increasingly, from anywhere in the world. With globalization shifting time zones, expect this trend to accelerate.
References List : 1. For a look at the Bureau of Labor Statistics’ employment projections, visit their website at: www.bls.gov 2. To read the Herman Trend Alert commentary on job opportunities in the energy field, visit their website at: www.hermangroup.com 3. To read the Herman Trend Alert commentary on employment in the construction trades, visit their website at: www.hermangroup.com 4. To access a report on medical school enrollment, visit the Association of American Medical Colleges website at: www.aamc.org 5. To access The American Association of Colleges of Nursing’s study on the nursing shortage, visit their website at: www.ahca.org 6. For information about law school enrollment and demographics, visit the Minority Corporate Counsel Association website at: www.mcca.com 7. For infomation about workforce ‘dropouts,’ visit the Herman Group website at: www.hermangroup.com 8. ibid. 9. To access the Society for Human Resource Management study, visit their website at: www.shrm.org 10. Fortune, June 22, 2006, “The End of a Dream,” by Geoffrey Colvin. ⓒ Copyright 2006 by Time Warner, Inc. All rights reserved. 11. ibid.
