Recovering Economy, Retiring Workforce and Universal Healthcare...the making of the Perfect Storm.
Today's blog post is especially important for those readers who take on Human Resource Solutions and/or Procurement Professionals that oversee Indirect Services.
There are 3 factors on the horizon that we see as creating a "Perfect Storm" in the world of workforce planning and optimization.
Recovering Economy - In the past 3 recessions (1982, 1991, and 2001) the use of contract/contingent labor surged post economic trouble. While unemployment hit a peak of 10.8% during the 1982 recession, the number of jobs in the contingent workforce grew by 577% between 1982 and 1998. According to the US Government Accountability Office, jobs in the overall economy increased by 41% during the same period.
In the aftermath of this recession we anticipate:
- Intensified growth in the contingent workforce over the next 10 years to two times the current average daily employed (6 million).
- Expansion of the current trend to broaden the skill segments used.
- Escalation in the "war for talent". Demand will be high and supply will be low of experienced knowledge workers.
Retiring Workforce - Recent Surveys of the "baby boomer" generation suggests that many intended to work during the typical retirement ages. The labor force participation rate of older workers (55+) actually began increase in the mid-1980's. By 2006 the group's participation in the labor force had risen significantly to 38.0%. It is anticipated that this strong upward trend will continue: in 2016, when baby-boomers will be between 52 and 70 years old, The Bureau of Labor Statistics projects that the labor force participation rate of older workers could reach 42.8%. This significant increase in retirement eligible workers will cause a significant decrease in the available experienced knowledge worker in the market.
Universal Healthcare - In spite of this initiative clearly stalled on Capital Hill, the U.S. must prepare for the fact that we may see a cost-effective, portable health insurance product available for the U.S. citizen. This coverage will enable the unemployed and those who elect to participate in the contingent workforce to maintain cost-effective, portable health insurance. Some studies show that 42% of U.S. workers remain in their current positions for the health insurance. If a viable public alternative was made available, we may see large numbers of full-time workers exit their jobs for contingent workforce flexibility while having a healthcare option.
I light of these 3 items we urge you to organize your Human Capital Management Programs and your Indirect Service Procurement practices so that they can easily scale to manage your organizations future requirements by providing visibility into your demand for productivity and use of Independent Contractors.
To read more about this. Request a complementary White Paper called Ahead of the Curve, The Steps you Need to take Now, authored by HCMWorks, Inc. This report will explore in greater detail the pending storm ahead.