There are big changes coming to the American workforce. While many organizations are watching the economy, there’s another change — almost a revolution — quietly taking place right under our noses.
That change is the massive shift in workplace demographics, with four specific trends to watch:
- Over 40 percent of Americans will be leaving the workforce in the next decade for new opportunities.
- Women are voting with their feet and leaving the corporate world.
- The old minority is the new majority; 92 percent of U.S. population growth is attributed to ethnic groups.
- Temporary worker demand is rising with predictions that 40 percent of the workforce will be freelance workers by 2020.
Are organizations prepared for the shift to come? Let’s take a closer look at how these workplace trends will impact the workforce and identify action steps you can take as you prepare for the future of work.
The Baby Boomers (born between 1946-1964) talk about retiring at 66, except if they don’t, because they need the salary, or just like working. If they do, we are looking at losing approximately 40 percent of the workforce within the next ten years.
If Baby Boomers retire, organizations will lose a lot of talent. Retiring Boomers are going to be hard to replace because Generation X is small, and also because Generation Y has a different concept of how they want to work. So how can you prepare for the loss of Baby Boomers in the workforce? Start with these three tips:
Tips to Prepare For Loss of 40% of the American Workforce:
- Start an intergenerational mentoring program. Match a Baby Boomer employee to a Millennial employee and set aside time for the pair to take turns teaching each other new skills.
- To bridge the knowledge gap, institute flexible work options for Baby Boomers making it possible for them to continue to work part time on their own schedule.
- Invest in education and training programs for younger employees. These training programs can be initiated for certain demographics that aren’t yet employees, in order to prepare them with the skills they need when they enter the workforce, potentially at your organization.
The fact is, Baby Boomers aren’t the only members of the workforce fleeing the scene. Women are also leaving the corporate workforce.
Why are women doing that? Because in 2012, women held 14.3 percent of executive officer positions at Fortune 500 companies and are still paid only three-quarters of what their male colleagues are paid. These statistics don’t match up, considering that according to the 2010 Census, today’s young women are just as likely as men to hold bachelors’ degrees, 50 percent more likely to have a graduate degrees than men, and more than 40 percent of women are now their families’ main breadwinners.
Organizations who understand the value of diversity need to step up to the plate if they want to attract and retain women. Considering rampant second-generation bias and decades of sexism, there’s a lot of work to be done. Based on research about what makes women stay with a company, here are three tips for creating a structure for success:
Tips For Attracting and Retaining Female Workers:
- Start a formal mentoring program. People tend to network with and develop mentorships with people of their own gender. If men have better opportunity for leadership roles and they only mentor or network with other men, men will continue to dominate leadership roles. Women, who are mentored and sponsored significantly less than men, have access to mentors of both genders in a good program.
- Institute flexible work arrangements that don’t have barriers. Fear of negative career consequences, manager skepticism, excessive workload, and a “face time” culture are among the barriers that prevent employees from adopting flexible work arrangements. Create set standards and give managers the training they need to be comfortable managing flextime workers.
- Function as a results-only work environment, and create formal compensation policies with clear criteria.
With women leaving the workforce, and the Baby Boomer retirement exodus on the horizon, what exactly will the future workforce look like? For one, minorities will make up the bulk of it.
The statistics say it all. 92 percent of U.S. population growth is currently attributed to ethnic groups. In the next ten to thirty years, census data says that there will be no ethnic majority in the U.S.
Despite the demographic shift, Harvard economist George Borjas projects that by 2030, the children of today’s immigrants will earn an average of 10 percent to 15 percent less than nonimmigrant Americans, based on former trends. With Hispanic and black youth graduating college at lower rates than their white peers, the future workforce may be less educated and lower paid. Here are three tips to prepare your organization for the new workforce demographics on the horizon.
Tips To Prepare For New Workforce Demographics:
- Start a paid internship education program for high school students from ethnically diverse areas. Spike their interest in your organization early and expose them to the skills they will need to acquire as they navigate higher education.
- Focus on retaining your current minority employees and developing them into your leaders of the future. This will create an inclusive culture, allowing for a seamless transition to a significantly more diverse workforce.
- Invest in a predictive analytics program to collect detailed data about whether discrimination plays a role in your daily workplace interactions, job placement, rate of pay, bonus structures, or advancement. Use these metrics as a baseline to track the results of your diversity efforts.
This more diverse workforce will change the dynamics of the workplace in more ways than one. How people work is also diversifying. There is a steadily rising demand for temporary (or freelance) workers — a stark difference to the workplace reality of previous generations.
These facts may surprise you:
- There are currently 53 million Americans working as freelancers.
- Freelance workers make up 34% of the workforce.
- This rising workforce is already adding $715 billion annually to the economy through freelance work.
Handling the impact of constant turnaround on the organizational culture requires careful thought and preparation. Here are four tips you can reference as you begin integrating a freelance workforce into your organization:
Tips For Integrating the Freelance Workforce Into Your Organization:
- Organizational culture starts with you. When interacting with freelancers, you must model your desired culture in your actions, behavior and communication style.
- Keep organizational vision and values in mind during the hiring process, no matter how short-term the project may be.
- Take time to onboard and integrate your freelance employee into the organization.
- Make sure your freelance employee feels part of your team. This will increase performance.
As you can see, the future workforce is going to look and function entirely differently. Organizations have a lot to consider. I urge you to take a long-term, strategic look at your hiring policies and make it a priority to prepare for the workforce of tomorrow. It’ll be worth your time.