New Ideas From OMS

Changes in Work Force Size Require New Thinking on Training and Development, Employee Retention

By Richard Allon, Ph.D., C.Psych, Executive Director, OMS

(A version of this article appeared in the Summer 2008 issue of "Moving Business Forward," published by the Guelph Chamber of Commerce.)

I went grocery shopping last weekend. The store was crowded, so I hunted for the shortest check-out line. No sooner did I start to unload my purchases than the person bagging groceries walked off and someone came up behind me with their cart. It was clear that even though it may have been the shortest line, it now wasn’t going to be the quickest, and backing out was no longer an option. So as the clerk started to scan my groceries, I began to pack the bags. The scanner seemed to be emitting error beeps with a frequency well beyond my comfort level. This was only made worse by the check-out clerk enlisting me as a handy helper: “What kind of mushrooms are these? Are these green beans or long beans?” I decided that it would be prudent to have a look at my receipt before I left the store. There were 3 errors among 21 items, an error rate greater than 11%. I went up to the manager and asked him why he was letting an inexperienced clerk work unsupervised, particularly with the store so busy. He informed me that she wasn’t a new hire. I asked him why there weren’t packers at every check-out; he said he was advertising without success to fill vacant positions.

I’d be surprised if you haven’t had a similar experience, if not at the grocery store, then at the coffee shop or the dry cleaners or the fast-food outlet or, indeed, anywhere that requires service staff. Get used to it. It’s only going to get worse. It’s happening for many reasons, but the two most obvious are that members of the baby boom generation, with an unusually large number of people in it, are beginning to retire, while the sizes of the generations following are small by comparison. It was about a year ago that David Dodge, at that time Governor of the Bank of Canada, indicated that the input of labour into the population was going to drop from the 1.25% per year at the time he was speaking to 1% by 2010 to 0.6% by 2015. In simpler terms, this means we will have a shrinking labour force. J.D. McNiven, a policy advisor at Halifax-based Canmac Economics put these same numbers into a more practical context: within the next 4 to 5 years, for every 8 jobs open in Ontario, there will only be 6 workers available to fill them. We are entering an economy where there will be more jobs available than people to do them, resulting in longer waits and poorer quality work and service. Over time this will affect not only entry-level and skilled trade positions as it does today, but will spread right across the job spectrum, including the professions.

What does all of this mean for your company? First off, you’ll likely be changing your recruitment procedures. While you and your competitors will continue to want the best possible candidates for every position, the new numbers suggest that you might realistically have to settle for a warm body that shows some potential to learn new skills. The number of available outstanding candidates will decrease, while the number of open positions will be getting larger. This in turn means that your company will have to significantly invest in effective training and skill development strategies to bring new hires up to desired standards. Having trained these workers, it is obvious that you will want to retain them. Providing workers with meaningful, satisfying jobs and effective rewards to motivate them will become central to the employment process. The only way this labour shortage will be solved is by increasing productivity. If you don’t have enough employees to fill all the vacancies, you will need to get each employee to do more. This won’t mean working employees harder and longer for the same money. With jobs going begging, they’ll just leave. It means having your employees work more effectively and efficiently. That happens when you both train and treat them better. To answer the question I asked at the top of this paragraph, these changes in worker demographics mean that your company will have to improve and increase its “people skills” in order to attract, develop and retain skilled workers. I can’t overemphasize the urgency of the situation. These shifts are already taking place. Focussing on recruitment, retention and productivity is not something you can think about looking at next week; it’s something you should have started working on yesterday.