Educational institutions and the Government
Five articles from Scholarly journals are reviewed in this essay. All these articles are observations based on scholarly studies on the possibility of workforce shortage in the future and the human resource interventions initiated by the society, industry, educational institutions and the Government. First three articles speak about shortages in specific area of profession, namely, of teachers, nurses and skilled manpower in manufacturing.
The last two articles clarify the realities making us believe that there will not be really a workforce shortage in the future, highlighting the possibility of encouraging the ‘baby bloomers’ continue in service for a few more years, because of the increase in life span and their financial dependence to take care of their increased life span. Introduction The present global business scenario would make one think that there would be redundancy all around and unemployment will be the biggest problem.
Paradoxically, these papers observe labor shortage will be seen in the forthcoming years, due to different reasons. The essay goes about reviewing a few papers and articles that appeared in the recent years in professional journals giving more insight into this topic. Teacher Shortage Paulo Santiago, Directorate for Education observes that teaching workforce is ageing and likely to fall into shortage category in many countries. His contention is that the heavy workload and low salaries keep away the young talents from teaching profession.
He relies on the paper “Teacher Exodus – The Melt down Scenario” in the OECD’s Education Policy Analysis 2001, which points out wide public dissatisfaction with the state of education due to teacher recruitment crisis and growing sense of declining standards. In this article, he observes that besides ageing, teachers leaving teaching jobs much before the age of retirement is another cause for reducing teaching workforce. He suggests that Government should take steps to make the profession attractive.
This article enlightens the writer that there will be labor shortage in the teaching profession, and Human resources managers have to take appropriate steps to correct the situation. Skilled labor shortage Kevin Hurley, Empire State Development, gives kudos to Rochester & Monroe County for their plans to assist manufacturers to overcome skilled labor shortages in the forthcoming years. They compliment the formation of Monroe County Manufacturing Partnership (MCMP) initiative to bring about collaborative efforts in augmenting skilled manpower for their key sector of precision tooling and machining.
The article highlights the importance of good labor supply for any economic developer or business builder to start an industry in a particular region. Fact remains that 57% of 15000 to 20000 area machinists are over the age of 55 and the number of apprenticeships today can not adequately replace the retirees in a few years. The chief reason for low entry to apprenticeship is reckoned as the lack of interest among the high school graduates to set their career paths to skilled jobs in the manufacturing sector.
Keeping this in mind, a consortium of business, Government and education leaders has been formed under the banner MCMP. MCMP has identified three areas to lay focus, all concerned with the awareness among students, counselors and society at large, aiming at motivating people to take up skilled jobs. MCMP has been a success story and it has brought awareness among public and clarity to students on various benefits available around the Skilled jobs in the manufacturing sector. Human resource managers have a good message from this paper and as such the writer finds it useful for the purpose of his topic. Nurse Shortage
Joanne Spetz of Center for California Workforce and Ruth Given of Deloitte Consulting in Los Angeles, report shortage of Registered Nurses in the U. S. and attribute less attractive wage levels as the cause of low entries to the profession. They rely on the reports of The Bureau of Health Professions (BHPr) which project a shortage of 800,000 nurses by 2020. The hospitals are aware of the situation and they are making their own efforts by offering higher wages. The paper also observes that nurse shortages are cyclical in nature during the past 60 years span and they vanish once interventions come up from the policy makers.
These authors develop a simple forecasting model with a question as to how high the Registered Nurse(RN) wages should rise to end the RN shortage. They discuss the causes first. Licensure delays, Poor working conditions and inadequate wage increases and early exits from the RN workforce are identified as causes for Nurse shortage. Their simple model implying future RN graduations, using coefficients of regression equations spells out the needed wage growth for balancing the supply and demand of RN workforce by 2020. .Their observations are limited to the assumptions in BHPr forecast on demand for nurses.
Likewise, the trend of nurses’ exit from labor market and nursing school graduations are assumed to continue as they are at present. Their forecasting model also assumes that there will not be much change in the international migration of RNs. Their observation is that RN shortage will be different from what it was in the past. Previously it lasted for three to eight years. This time it will be at least 10 years. They also forecast that in the long term, there will be surplus Nursing workforce, which will be a less serious issue as compared to the BHPr projected Nursing shortage.
Since the writer’s topic is relating to Future labor shortage, this information is very useful to him. Will there really be a labor shortage? Peter Cappelli, Wharton School Professor, gives a detailed analysis and observation that there will not be really a labor shortage in the future. He observes the baby boomers’ entry into labor market as the dominant demographic event, which preceded a long period of economic stagnation. Between 1998 and 2001, the labor market was tight and wages began to rise sharply.
The baby bust demographic event, which is clearly visible now, will not be able to adequately replace the jobs held by baby bloomers. There is a third larger cohort referred as “echo” of the baby boom, which along with immigration saw the labor force grow roughly at the rate of 1% every year. Still faster rate is contemplated by 2014. Since the life expectancy is 15 years higher than what it was when the retirement age was fixed as 65, even a small increase in the retirement age will increase the labor supply substantially.
If older workers are persuaded to continue working, it will not only provide more labor supply but also good quality labor supply. The article also discusses on the labor supply’s relationship to economic growth. If the labor market is tight, efforts to increase the labor productivity will follow, which factor will ease out the tightness. Also, when tightness increases, the HR managers tend to go for alternatives like off shoring jobs to contractors, if not carrying out the operations in countries where labor supply is abundant and cheap.
The period 1998-2001 offered up new challenges in addition to tight labor markets, such as increased employee turnover and pressure to hire new skills and expertise. In 1999 employers’ problem was to retain their best workers, although not all workers. By the middle of 2001, however, retention problem evaporated for many employers as new jobs dried up by then. As the baby boom ages, the pool of retirement age individuals will look for alternative working arrangements. Policy changes in this direction will help human resource management to have competitive advantage in availing this talented and willing workforce.
As the writer’s topic goes with the effect of future labor force shortage on Human resources manager, this article is of good value to him, as it suggests important HR interventions like Policy changes. Labor shortage in the Small Business Workforce. Bruce D Phillips of National Federation of Independent Business (NFIB) conveys the message that Small businesses will not be affected by labor shortage in the future. His paper explores four specific scenarios: 1. Increase in labor force participation rate (LFPR) of the baby boom generation, which in turn will increase he overall labor supply 2.
Spot shortages in rapidly growing sectors, such as, labor intensive construction and manufacturing. 3. Continuing trend of immigration in the current rate for the next 10 years 4. Small business owners employing more of semi-retired and self-employed persons to avoid additional costly benefits. He quotes the observation of Bureau of Labor Statistics (BLS) that small businesses do dominate major sectors that contribute two thirds of the job growth during 2002 through 2012 . Commenting on the supply side of labor, he observes that during this period the workforce in the age group 55-64 will outnumber the others.
Relying on the articles by Horrigan and Toosi in Monthly Labor Review of February 2004, he suggests that Small businesses mitigate the labor shortage by creating incentive programs for existing workers to postpone retirement, increase overtime work, shift fulltime workers to part-time, improve the size of legal immigrants, and introducing similar interventions. On the basis of different studies of Employee Benefit Research Institute (EBRI) and Congressional Budget Office (CBO) he observes that baby boomers would need at least 80% of their pre-retirement income whereas they have saved only around 50%.
This fact alone will make them come back to work. These studies and those done by the American Association of Retired Persons (AARP) and University of North Carolina predict that 45-70 percent of baby boomers will continue to work after 65 years of age. Immigration trend being inevitable in the future as well, the labor shortage in small firms will be augmented by that source too. This article is also very useful to the writer as it gives good knowledge on the status of future labor supply relating to his topic of interest. Conclusion
We have gone through five papers published in the accredited journals, explaining the possibility of workforce shortage in forthcoming period of a decade. Specifically labor shortage is contemplated for teachers, nurses and skilled trades. Never the less, by the scope of baby boomers’ continuing in employment beyond the present retirement age of 65 and viewing the trend of legitimate migration, the labor shortage will be sufficiently mitigated, particularly in the small business sector. We also went through various sources the authors have relied upon these observations.Sample Essay of RushEssay.com