A Gen Z'rs Response to @Josh Bersin's Article - Not Enough Workers: Rethink Recruiting In The New Economy
“What are you going to do after high school?” I asked my 17-year-old friend.
“Probably get a job as an electrical tech. They make $25/hour and I can start right after school finishes, and I can learn from skilled people who’ve been doing it for a while. Besides that, it’ll be a good challenge” he told me.
What??
Not go to college?
Not take a gap year?
Not spend $40k when you don’t know what you want to do with your life while your parents pressure you into just doing “something” for the sake of looking good to everyone else while you start life in debt and end up with a fairly useless degree that you can use to get an entry-level job making the equivalent of $10-12/hour until you can “land the perfect career-building position”?
Thomas isn’t alone in his choices… in fact, according to a recent study by TD Ameritrade’s research division, 1 in 5 Gen Z’rs say they’ve decided NOT to go to college.
Let me repeat that. 20% of your potential workforce doesn’t believe a degree after high school is worth it.
Employers, get ready, because @Josh Bersin is absolutely right in his article: Not Enough Workers: Rethink Recruiting in the New Economy when he says it won’t be long before “there won’t be enough workers to go around.” Well, at least there won’t be if American companies continue thinking about recruitment the same way as they did pre-pandemic.
Three Forces at Play
There are three forces at play in the American labor economy:
A shrinking workforce population
An increasing number of available jobs
A workforce population that wants to enter the workplace earlier (1 in 5 Gen Z’rs are not planning to attend a university)
As @Josh Bersin reminds us, while America’s labor participation rate remains about 61%, the fertility rate has dropped (now it’s 1.7), and baby boomers are retiring at record rates.
The problem? Here’s what Josh says:
The US GDP is around $21 Trillion and we have about 151 million people working. This translates to around $139,000 of economic activity per worker. If the American Jobs Act adds $3 Trillion to the economy, this translates to about 21 million new jobs created. That’s a 14% increase from where we are today. Where are those people going to come from?
As a Gen Z’r, I suggest some additions to Josh’s proposition for solving the workforce challenges we are facing.
#1: Automation
If the economic activity of each US worker is approximately $139,000 and yet the supply of labor is decreasing while cost is increasing, rather than creating 21 million new jobs, the market will be pushed to automate the lower end of the labor spectrum, effectively “pushing” jobs up the chain. The United States is long overdue for an overhaul in thinking with regards to American manufacturing, food service, and other minimum-wage jobs.
To take a simple example, look at the automation of food service in Japan. Sushiro Global Holdings, Japan’s top sushi chain operator, has leveraged robots, tablet ordering, and conveyor belt technologies to create a “staff-less” experience. All the while, in 2018 they reported revenue growth of 12% to 174 billion yen ($153 billion) over the previous year, while net profit rose 15% to 7.9 billion yen, yet maintained their 100 yen per dish price.
While other quick-service companies were forced to raise prices to keep up with the cost of labor, Sushiro effectively removed that from the equation.
Yet, in America, we’re still clinging to the ideas of human touch and “keeping food service workers employed”. No one seems to think about “helping food service workers grow”.
With the exception of a visit to Chick-fil-a, how often are you wishing your fast-food experience was less efficient? Or that you had time to enjoy the human touch? I doubt it’s often.
Here’s the thing. Employees in the industry will be forced to move “up the chain” and companies must adapt to help them so we can continue innovating and progressing as a society.
#2: Creating Candidates
How can companies solve their labor supply problem? I echo Josh’s perspective that companies MUST shift focus from recruiting candidates to creating them.
20% of Gen Z is choosing not to attend a 4-year university, meaning, they might be working a minimum wage job, but are high-potential candidates ripe for recruitment and career development.
Instead of working minimum-wage jobs, these Gen Z’rs skills would add a much higher percentage of economic activity to the US economy beginning a career path early. Here’s what this could look like:
Foodservice (and other minimum-wage staff) workers are “automated out” of their companies. Where do they go?
Companies develop career pathways for high school-educated employees, requiring an investment shift into learning & development for their workforce. They absorb candidates who are willing to grow but may have not had the resources or capacity to attend college.
Employees begin in entry-level positions, then grow through upskilling, lateral movement, and internal training.
Effectively, employers are creating their own candidates while improving the efficiency at the bottom of the labor supply chain.
#3 Improving Employee Experience
There’s a reason the turnover rate in hospitality is approximately 70-80% annually, according to the Bureau of Labor Statistics. It’s not a secret that most front-line staff work long hours and are paid relatively little, among other problems.
I propose the solution is not forcing an increase on the wage’s market value, rather, firms must do a better job of automating the lower end of the labor market and moving staff into more fulfilling work.
We could spend hours discussing the elements of employee engagement, but I’ll simply focus on this primary element: Moving employees into work with greater skill (and thereby, potential for greater pay) and leveraging company resources to “create employees” while automating the work few people wish to do, will positively impact the nation-wide employee experience.
With Gen Z already saying that salary is the most important consideration for their first job, employers must think about creating higher-valued work that warrants higher pay to keep Gen Z engaged.
Moving Forward
Employers, as someone who is a part of the next generation, I urge you to think outside the box about recruiting and career pathways for incoming candidates. Now is the time to move forward, or our labor supply will not keep up with the demand in the very near future.
If you haven’t read @Josh Bersin’s article, take a few moments to read it. There are specific strategies he has seen companies like Ashley Furniture take to solve manufacturing labor shortages. It’s well worth the read.