Recently, some articles appeared warning us of imminent labor shortages. They look at the retirement of baby boomers and claim that due to the future, smaller labor force, the “war for talent” will intensify as soon as the economy turns around, so companies better use all their resources to bind employees. There is however one important fact that most authors overlook: shortage is not the result of the number of available candidates, but of a lack of suitable candidates.
On the current labor market, scarcity and abundance go hand in hand: despite increasing unemployment, some (technical) profiles are scarce. We also observe another trend: People live longer and remain healthier. Retirees continue to hold part-time positions, for financial reasons or because they want to contribute to society. The total labor force therefor becomes more fluid, and is not decreasing as fast as retirement charts make us believe.
The ‘rise of the creative class’ as predicted by Richard Florida has become the reality: to earn a good salary, an employee must have unique talents that can’t be copied or automated easily. Thanks to the internet, unique talents can be utilized anywhere in the world. For people without an education it’s becoming increasingly hard to find a job: the number of cash registers in the supermarket has been halved since the introduction of self-scanning, and online shopping grows every year. This phenomenon is called the “consumerization” of work: where in the past you needed a middleman (clerk, cashier, travel agent, etc) to buy or use something, through technology you can now serve yourself online.
And although we think that after the crisis everything will return to “normal”, the “new normal” will not automatically lead to the creation of jobs. The ‘jobless recovery’ means that human labor is being replaced by automation, robotics and artificial intelligence. And don’t assume this only pertains to simple tasks: robots can now perform surgery, drive busses and trains and fly air planes. Based on these developments, a smaller workforce is not necessarily a bad thing, but no guarantee for full employment either.
Companies like Apple (60.000 employees) and Google (33.000 employees) earn their billion dollar revenues with much less employees than the traditional companies, that engage in one restructuring effort after the other. Our main challenge will be how we deal with an economy where work is automated and the need for technical know-how increases every day. How can we ensure that people are educated in such a way, that they can fulfill the future demands of work?
The current debates about retirement age and flexible labor contracts make painfully clear how little governments are prepared to deal with the changes presented by the future, global labor market. A long term vision is urgently needed to ensure the future economic growth of many countries.