Winds of Change
Minnesota’s workforce is on the cusp of somemomentous changes. Are you ready?
BY SARAH GILBERT
Editor’s note: This is the first of a two part article on changes that are affecting the state’s workforce. In this installment, we look at those changes and the factors behind them. In the next issue, we’ll explore strategies to address them.
Last summer a teamf rom the Minnesota Department of Employment and Economic Development (DEED) traveled fromthe far northwestern corner of the state to its very bottom, at the border with Iowa, hoping to spark a little dialogue about economic development. In each of its eight strategic stops around the state, the team spent half a day listening to local leaders, conversing with economic development professionals, and getting input from both the forprofit and nonprofit sectors of the economy. And in each of those eight stops, that teamheard the same concern come up over and over again. “The workforce issue was something that came up quite regularly,” reports Kirstin Morell, a DEED spokesperson.
With good reason. The availability and quality of workers has a direct impact on a company’s products and services — and its profitability. And while Minnesota companies have long enjoyed a powerful competitive advantage in that realm, the state’s workforce is on the edge of some massive changes.
“The business community is thinking about this and they’re certainly aware of what’s coming down the pipe,” says Martha McMurry, a research analyst with the Minnesota Demographic Center. “We get a lot of questions from people who want the demographic numbers. But what they do with them, I can’t really say.”
What they should be doing is thinking ahead. Aging workers, from hourly employees to senior level executives, will begin to retire within the next few years; their exodus will continue for more than two decades. State of Minnesota research notes that labor force growth will shrink to 6 percent between 2010 and 2020 and then to 3 percent between 2020 and 2030. But replacing those workers will require more than just finding enough able bodies, although that’s certainly part of the problem. As a whole generation of the workforce leaves, it’ll take with it decades experience and knowledge.
“The loss of knowledge as baby boomers start to retire is one of the interesting things that businesses need to be thinking about,” says Rachel Hillman, a regional analystwith DEED. “That knowledge retention can be critical to a business, to the history of a firm, even to the history of the local community.”
Most experts familiar with the numbers suggest that now is the time to start thinking about the future. And although many in Minnesota seemto recognize that a problem is looming, it isn’t clear whether or not they’ve begun to prepare for that yet. Offshore outsourcing, technical advances, and productivity enhancements will ease some of the burden, but they won’t be enough. “Alot of times,” McMurry says, “ businesses tend towait and see what happens — kind of like government, I guess. They react to the problem rather than planning for it in advance.”
OLDER AND BETTER?
The largest group of workers available to help fill the gap left by retiring workers will actually be those retiring workers themselves. Some will want to kee pworking; otherswill need to. Recent research byAARP reports that almost 80 percent of baby boomers will continue working after age 65, at least in part to cover their living expenses. And by some estimates, the national 65-and-older labor force will more than triple between 2000 and 2030.
“That’s one thing [companies] might want to think about — ways to keep older workers in the work force,” Morell says. “If they can start to think about flexible schedules and other ways to accommodate these older workers, they might be able to retain more of them.”
While older workerswill be more plentiful, they’ll also present some challenges. One immediate concern is howto deal with generational conflict. Will a company’s 30- and 40- something managers grasp how to supervise and motivate their 60-something (and perhaps even 70-something) employees? On the flip side, will older workers be able to take orders from relative youngsters?
Still, several studies over the past several years have shown that older workers are reliable, loyal, flexible, and willing to learn new skills. What’s more, The Concours Group, a Texas-based consulting firm, recently published a report noting that workers over the age of 55 tend to have stronger social skills than their younger counterparts, which makes them a good fit for positions that involve customer contact. On the flip side, they may not be well versed in the the latest versions of software and business processes — or even workplace cultural policies, for that matter.
Tom Murphy, executive vice president ofmanufacturing and wholesale distribution for RSM McGladrey, a national business consulting firm, puts a premiumon training and retraining for all employees, regardless of age. “To retain employees, you have to make sure you’re creating a work environment that’s positive and challenging,” he says. “You need to keep training the employees in newchallenges and techniques andmethods. It’s a lifelong learning process, and we need to provide that for our employees.”
THE IMMIGRANT FACTOR
Training will also be a requirement for the other pool of potential replacement workers: immigrants. During the last two decades, new waves of immigrants have settled in Minnesota. The Twin Cities area has seen a steady influx of Somalis, Russians, Hmong, Laotians, Bosnians, and others. Many outstate areas have considerable immigrant populations, too. According to U.S.Census Bureau statistics, the state’s foreign-born population rose from just over 110,000 in 1990 to nearly 250,000 in 2000. The pace has picked up in the years since. From 2000 to 2005 (the last year for which figures are available), nearly 69,000 immigrants moved to Minnesota. And although many come with the knowledge and skills needed to fill even high-level positions, others have needed substantial help gaining job skills.
“Clearly, the main reason we see so much immigration in the United States today is because there is a demand for their labor,” McMurry says. “What kind of jobs they take varies a lot, and depends quite a bit on their educational background — but a lot of the immigrants who come here are taking that jobs that are hard to fill, like meatpacking, lawn work, and other heavy labor-type jobs.”
Finding away to tap into the immigrants who come to the United States to earn their educations is another essential part of solving the workforce problem, Murphy says. It’s a shame, he says, that our country is more than happy to grant them visas to come here as students—but not for them to stay and join ourworkforce. “We train them, we educate them with our tax dollars, and then we send themback to their home countries to compete against us—is that right?” he says. “We have to fix the immigration problem. I don’t necessarily have the answer, but I can say this: This is a country that was founded on immigrants. If we can’t figure this out, shame on us.”
But Murphy also acknowledges that the immigrant population is just “part of the solution to this puzzle. ”He believes that industry must also look far down the ladder for future employees. Junior high is not too soon to start educating kids about the opportunities available in certain industries, particularly in themanufacturing sector. “We need to start recruiting in high schools or even before,” he says. “We need toworkwith community colleges to get programs in place to train kidswith the skills they’re going to need.We have to get involved at a younger age,maybe even consider offering scholarship programs so that they can go to school, then come towork for you.”
READY FOR ACTION
Perhaps the best strategy businesses can have, Hillman says, is to address the coming changes head on . “The best way to prepare is to be open to changes,” she says. “Be willing to have amore diverse workforce. Be open to an immigrant workforce. And be prepared to address the communication differences that stem from generational differences.”
There are awide range of approaches to the issue. Mentoring programs that pair older and younger employees offer one option. Another is to nurture relationships with colleges and universities to directmore students into the pipelines for specific industries. Murphy has even heard of professional groups offering summer programs for high school educators so that they themselves understand the job opportunities that their students will have upon graduation. “That’s been fairly effective in terms of reaching the teachers,” he says.
All of those are good ideas, each one a small step toward a solution for what will soon be a pressing issue. Those and other creative approaches will be needed, says Murphy. “American ingenuity gets a lot of things done,” he says. “And we’ll figure this out too.”