Labor News

U.S. Labor Shortage

As the competition for critical talent in the U.S. intensifies, organizations must better understand the supply and demand for critical workforce segments. Companies must begin to identify the skills in their organization that will help drive future growth. "With the relative aging of the population, it is bound to bring with it many changes to the economy of the U.S.-some foreseeable, many probably not," according to Alan Greenspan, Chairman of the Federal Reserve emeritus.

Today, the average cost to replace an employee is one and a half times their current salary when you factor in benefits, on-boarding and training and development. That cost is expected to double in the next 25 years. According to the Bureau of Labor Statistics, by 2012 there will not be enough skilled workers in the U.S. to staff all of the nation's jobs.

  • The number of people aged 55 and older will increase to 73% by 2020, while the number of younger works will grow only 5%.
  • More than 25% of the working population will reach retirement age by 2012, resulting in a potential skilled worker shortage of nearly 10 million
  • The United States sees a shortage of more than 1 million nurses by 2012 and an estimated shortage of 200,000 physicians by 2025.
  • U.S. colleges will graduate only 198,000 students to fill the shoes of 2.5 million baby boomers scheduled to retire by 2012.
  • More than 400,000 of the 1.5 million IT jobs to be created by 2011 will go unfilled because of the skilled labor shortage.
  • Private pension funds in the U.S. are staggering to the tune of being underestimated by $111 billion - a 425% increase recently and the highest under funded pension liability ever reported.

The real talent gap in the United States involves selected skill sets. Four industries in particular will suffer a mass exodus of employees including: Healthcare, Manufacturing, Energy and the Public Sector. With a decrease in the employee workforce, companies are challenged with the question of whether or not there will be enough qualified workers in the United States to do the work at an acceptable cost. Organizations must be prepared to manage divisions or business units that will be heavily impacted by waves of retirement and the impact retirement will have on critical skill sets and productivity needs.

Reference/Sources:
- The Bureau of Labor Statistics
- Deloitte research 2008-Do you know where your talent is?
- HR Magazine Vol. 50, No. 3