As the U.S. economy continues to limp along, unemployment is more of an influencing factor than it has been at any time since the Great Depression.
It is estimated that there are in excess of 25 million people currently unemployed. That means this represents 15 percent of the work force, not 8.2 percent, as government statistics suggest. While the average monthly paycheck is $3,500, the average monthly unemployment check is $1,000, which is costing the government a total of $36 billion a year in lost payroll taxes and unemployment benefits, says Peter J. Munson, managing partner at Executive Career Services.
“The question then becomes one of how the future look for jobseekers, employers and the economy alike,” says Munson. “In addition, how does the HR and talent management industry react to the constantly changing landscape during these uncertain times? This is very much a ‘chicken and egg’ situation, with no clear end in sight.”
Smart Business spoke with Munson about how the current economy is impacting the private sector and how human resource managers are changing their talent management practices to address the change.
How has the economy changed?
The bottom line is that many manufacturing jobs are gone forever, either as a result of outsourcing overseas or simply because certain sectors have become obsolete or uneconomical from a production perspective. Today, more than 50 percent of consumer goods are manufactured outside of the United States, and that trend continues to increase.
For example, the Big 3 auto companies now build more cars outside of the U.S. than they do here at home. Most technology and electronic products are manufactured in Asia. At the same time, most U.S. textile plants have closed down in favor of cheaper Asian imports.
Also, many companies are outsourcing their help desks and customer service activities to countries such as India. Looking to the future, the private sector of the U.S. economy is increasingly dependent on service industries, as heavy industries decline. This includes financial services, technology, energy, green and health care. As a result, human capital will have to be re-educated and retrained to meet the demands of these emerging and changing fields. The solution to this issue is to address the fact that our education system is broken.
How can the education system be addressed?
By any standard, unified school districts in major cities are failing to produce quality results. Therefore, community colleges should put more emphasis on technical skills training in areas such as electrical, mechanical and IT. The fact is that not all high school graduates are capable of completing a college degree, let alone paying the high cost of tuition.
Consequently, high schools, colleges and trade school admission requirements and curriculums should be designed to meet the needs of the changing landscape if we are to rebuild our skilled work force and the infrastructure to support a productive manufacturing base. This should represent the bulk of our production resources and career opportunities.
How are human resources manager changing the way they work?
Human resource managers are now looking at significant changes in their talent management practices in an effort to reduce costs and improve efficiency. Due to the uncertain economic outlook, companies are relying more on temporary staffing than on full-time employees. Fewer companies are outsourcing their search requirements and more are using job boards and social media such as LinkedIn and Facebook to identify talent, from CEOs to trainees.
Many companies have chosen not to provide outplacement services when they plan a reduction in force. Ancillary services such as executive coaching and leadership development programs have been put on hold by many employers, and this means that training for new skills and/or job opportunities is limited.
How has this impacted outplacement and talent management firms?
Outplacement and talent management firms have consequently had to essentially reinvent themselves to stay current. Outsourcing of consultants and virtual delivery has become the norm. Today the industry is more advanced than ever in the development of online career centers, interactive webinars and virtual coaching using such tools as Skype. This allows candidates an option to manage their job search from home by accessing the selected service providers’ websites, as well as selecting online certified job training programs.
The old bricks-and-mortar model of outplacement career centers is fading from the landscape. This change has been slow in coming but is now more the rule than the exception. In addition, there has been a consolidation of the bigger career training firms in an effort to achieve economies of scale.
Most people in this country want to work and be successful. The U.S. work ethic and productivity exceeds most other nations. If we can combine this with a re-education program in which we have round pegs in round holes, we really can win the economic future. But unless fundamental change occurs at all levels, the prospect of a return to full employment will not happen any time soon. The end result of any changes should be to produce a more efficient, economic employment delivery system for all concerned.
We can’t all be lawyers, doctors, CEOs or millionaires. However, in this land of opportunity, there is room for everyone to succeed in their own way. That is what makes America great.
Peter J. Munson is managing partner at Executive Career Services. Reach him at [email protected].
Insights Human Capital Solutions is brought to you by Executive Career Services
