The last five years have seen significant power reside in the hands of employers as the supply of workers has far outpaced the demand. 2014, however, looks like the balance may shift and employees will gain the upper hand.
There are several reasons for this shift – a tipping point, actually – and the ramifications will be with us for years. To start, the financial meltdown of 2008-2009 has finally reversed its course. Companies as diverse as Starbucks and Proctor & Gamble no longer see millions of applicants for thousands of jobs. In addition, the Federal Reserve Board has seen fit to scale back on quantitative easing while the Federal government is once again hiring in significant numbers. Both situations portend a more employee-centric job market.
At the same time, many large American corporations – sitting on more cash and liquid assets than ever before – are looking to expand their operations and capitalize on the ready labor market. Finally, the first wave of baby boomers have started to retire, as many as 10,000 per day according to some government estimates.
For this reason, many corporations are looking to our southern neighbor to increase the available work force but that strategy will only work for a certain number of skills. More educated and easily trained employees will start to see higher demand. The question that corporations need to ask is whether their retention strategy is sufficient to keep their best employees in place.
Simply put, a solid retention plan is key to the future success of any company. With a rapidly diminishing trained work force, a company will no longer be able to have its so-called “pick of the litter” when it comes to employees. Even worse, they can no longer rely on minimal training and hope for the best. Instead, a development plan must be instituted to keep employees motivated and committed.
Development and retention plans do not normally come fully formed but HRIS systems and Professional Employer Organizations can help jump start your efforts. Consider them when reevaluating your strategy for dealing with the “new normal” in the shrinking labor market. The real risk is not that you will run out of employees, just that you will have to deal with all the problems associated with sub-par ones.
For more information on HRIS systems and PEO companies see the following resources:
compareHRIS.com
PEOcompare.com
