Labor shortage ahead?

A government-projected shortfall of some 10 million workers by 2010 could trigger widespread turmoil at workplaces in need of skilled employees, contends Joyce Gioia, president of The Herman Group, a management-consulting firm in Greensboro, N.C. The shortage, she says, would cause a drop in the quality of goods and services and force even stable companies out of business.

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The most sobering footnote, says Ms. Gioia: Few businesses are prepared for this looming problem. Corporate executives still place far too much emphasis on the next-quarter stock price than on long-term strategic planning, says the co-author of the new book "Impending Crisis: Too Many Jobs, Too Few People."

Labor shortages already are creating "pockets of crisis" in the economy, Gioia says, pointing to the healthcare industry, where job vacancies top 50 percent, and cities like Madison, Wis., where the unemployment rate hovers around 2 percent.

When the economy recovers, these pockets will spread to other sectors across the country, she forecasts. Workers empowered with multiple job offers, and fed up with bosses who "just don't get it," will seek work elsewhere, she says, making the corporate world's scramble for skilled employees in the late 1990s seem like a warm-up session.

The Monitor caught up with the business futurist recently to hear her thoughts on the coming crunch:

On its impact on consumers:

"Employees are going to be jumping from job to job as never before. We're going to have a lot of people in a lot of different businesses who are not able to be as efficient and effective as their predecessors were. We're going to feel like we're not enjoying the same standard of living that we once had.

"Take this for example: You buy groceries at your friendly local food store, and have come to depend on the person behind the fish counter. You show up one day to buy your fish, and that person is no longer there because he's changed jobs. The person who is there doesn't seem to know what he or she is doing, and furthermore, doesn't really care much about you.

"And you're not the only [one] who feels that way. There are other customers who feel the diminution of services, and they choose not to go there any more. Now that store is in trouble. Because it cannot find good people to serve its customers, its sales drop. You go back again, and not only is there not a nasty person behind the counter, there's nobody behind the counter, and you have to call for somebody to help you."

On corporate leaders who "don't get it.":

"Many, perhaps most, have never learned how to lead. We have a combination of the Peter Principle, which says people are continually promoted to their level of incompetence, and management by anointment.

"The way that goes is someone will say 'Hey, Joe has done a really great job on the line. Let's make him a supervisor.' [They] haven't given him training [or] told him how to coach his people.... But he's now a supervisor.

"One of two things can happen: He gets fired from the job, or [they] just keep promoting him in hopes that he will be better at the next job."

On the impact on workers:

"Approximately 72 percent of people who are employed in the United States today don't like their jobs. When the economy turns around, you will see massive churning in the labor market. For employees, there is definitely a silver lining here. They are going to be more highly valued by the employers that are getting it; the ones that we call 'employers of choice.'

"Employers who are not employers of choice may still be able to stay in business, but they won't be nearly as profitable. They're going to be spending a ton of money replacing people. Employee turnover is extremely expensive. If companies understood what it means, they would be nicer to their people."

On how to attract and retain skilled workers:

"In study after study, it's not the money that keeps employees. It's being appreciated, being able to know that the contribution that the employee makes, makes a difference to the bottom line. People want to be challenged, they want to learn and grow, and be able to stay marketable.

"One of the things that we know improves morale is cross training and providing cross experiences. When you give people the opportunity to stretch their own personal envelope, it makes people feel good about themselves and about the job they're doing."