Strategic HR: Demographics Alert

For many of you this may have gone unnoticed. For some of you your thought may have been "that is interesting" or "I am not surprised." If you are a strategic HR person your thought should have been "What impact will this have on our employee base? How will this impact our HR system as a whole?"

"What is he talking about?" you ask. What I am talking about is the article that appeared in the WSJ on the September 29 Online edition. The article was entitled New Vow: I Don't Take Thee - Young Single Adults Surpass Married Peers Amid High Divorce, Cohabitation Rates. Author Connor Dougherty starts off with " For the first time since the U.S. began tallying marriages, more Americans of prime marrying age have stayed single rather than tied the knot, the culmination of a tectonic shift in the role of marriage and relationships that began in the 1960s."  The author continues with "... data released Tuesday by the Census Bureau show that for the first time the proportion of people between the ages of 25 and 34 who have never been married exceeded those who were married in 2009—46.3% versus 44.9%, according to an analysis by Mark Mather, a demographer at the Population Reference Bureau, a non-profit research organization in Washington." If you combine this with adults who have been divorced the married population has dropped to 52%, the lowest share in history. Compare this to 72.2% in 1960.

The article talks about a lot of the "whys" of this, but to get that information you need to read the article. What I was most interested in, and want you to think about, are the implication for your particular workforce in the coming 5 or more years. I want you to think strategically. What will this impact possible be for you and how will you be prepared to handle it.

Here are some of my general thoughts:

• Recruitment- Might this have the effect of opening up a market of candidates that might be more willing to relocate in the future? What effect might this have on your pool of candidates? Will it make it easier to find people?
• Compensation- Because there are more women getting college degrees and more women in the workforce who are now forestalling having children will this raise the overall compensation of women in the workforce. Will this have any impact on your pay policies (it shouldn't if  you have been doing it right before this, but you never know?)
• Benefits- How will a workforce composed of a large group of single people impact your benefit structure? Of course, many of these single people have "partners" (both hetero- and homosexual). Does this mean you will have to alter plans to cover more domestic partner situations?

Those are just three areas that quickly come to mind. What else might be included? That will depend on your company's circumstances. But you need to be thinking about it now, proactively, and producing a contingency plan that will allow you to say to upper management "Here is a trend, here is how it will impact us near-term and long-term, and here is what we need to do about it." Talk about earning your stripes.

Of course this may have been unnecessary for me to say. You already recoginize this stuff and do this strategic environmental scanning all the time? RIGHT!

Strategic Knowledge: Hidden Unemployment and Its Impact

I taught a SHRM prepartion class on Saturday to a new group of students. The first module discussed in the prep course is on Strategic Managment. Part of this discussion centers around environment scanning and one of the areas that all good HR pros should pay attention to is what is currently happening with the current workforce. As part of that discussion I mentioned that unemployment was officially about 9.5% on a national basis and about 10% in Georgia. However, I said that unofficially it was more like 16% because "official" numbers did not count those who had dropped off the rolls and were no longer collecting unemployment benefits nor did it count those who were "underemployed". These folks include people working part-time jobs. For numbers purposes they are counted as employed, but if you ask them they are not working enough or in their field of expertise. They consider themselves unemployed and are holding a part-time job to help pay bills while looking for "real" work.

Well after having made that statement in class I went home and was reading some news where I discovered an article The Jobless Effect: Is The Real Unemployment rate 16.5%, 22% or ...? Author Pallavi Gogoi reports on surveys that have shown that the real unemployment rate may be 22% or even higher. This has led the researcher to question the accuracy of the Department of Labor Statistics numbers and, as the writer reports, this is not the first time. A number of researchers, writers, academics and others have long thought that the government "cooks the books" when it comes to unemployment figures. However, at this time it has potentially devasting consequences. One of these is that lawmakers base their legislative actions on a picture that is less grim than it actually is. Additionally, businesses may ramp up based on such figures only to be disappointed because consumer demand is not there due to the fact that more people are unemployed than was reported.  One writer suggest that one of the reasons that unemployment benefits have not been extended is the much "rosier" 9.5% reported than the actual, near depression level, of 22%.

The research shows that 50% of workers in the US report they have lost a job or suffered some financial impact due to the recession. We all know someone who is out of work and probably know someone who is part of this "hidden unemployement". As part of the response to this another impact on the laborforce is that many seniors have returned to work, often taking positions that would normally go to teens. As a result unemployment among teens is running two or three times the level of the rest of the workforce. The impact of this has been a reduction in teen spending, a large part of the consumer market. However, another impact is that teens are not learning workplace skills, like showing up on time, that will be necessary for them to be successful in the future.

I am not sure of the appropriate solution or solutions to this problem. When you have politics, social influences, education and money all wrapped up into a problem there will be no easy solution. However...

The lesson for HR professionals is to be aware of what is going on and how it will influence what you and your company do in the coming 6 months to 2 years. How does hidden unemployment, teen unemployment, lack of trust in government reporting, lack of consumer spending and the political arena impact your organization? Being aware of these issues and guiding your company through the minefield will improve your worth and help you avoid joining the ranks of the unemployed.

Key Factors in Strategic Decisions: Decisiveness, Timeliness and Risk

I just finished a brief article written for the McKinsey Quarterly by Anne Mulcahy, the chairman and former CEO of Xerox. They had asked her to reflect on strategic decision making. One of the points she made in her article dealt with timeliness of decisions. She said "Decisiveness is about timeliness. And timeliness trumps perfection. The most damaging decisions are the missed opportunities, the decisions that didn't get made in time.... all the decisions you didn't make because you missed the window of time that existed to take advantage of the opportunity."  There are a lot of lessons there for management and HR in that statement. Have you missed a great hire because you took too long to make a decision? Have you dealt with a major lawsuit because you did not address a problem, such as harassment, until it was too late?

She also made the comment "These days, everyone is risk averse. Unfortunately , people define risk as something you avoid rather than something you take. But taking risks is critical to your decision-making effectiveness and growth..." She made a comment as well that exemplfies many HR departments "... we got very conservative, very risk averse, and also too data driven."

Have you avoided making a decision because you wanted to look at one more candidate? Avoided firing someone because you wanted to give them "one more chance"? You need to remember that decsions have "shelf lives." The cure for this is to put tight timeframes on your decision-making process. Collect only some much data and avoid "paralysis by analysis." Only solicit so many opinions and do so from a balanced group of people some of who have a stake in the decision and from some that don't.

And lastly remember to listen to your own "inner voice." As Mulchay says "... when trying to take the bias out of decision-making, you need to be really cautious NOT to take instinct, courage and gut out as well." (my emphasis). If you have any mileage on you at all you experience, skills and knowledge that you should listen to. So don't discount your ability in making key strategic decisions.

Can anyone provide an example of a missed opportunity for lack of timeliness or due to risk averse behavior?

A Strategic Planning Alert: The Changing Face of America

One of the tasks all strategic HR pros are assigned is paying attention to demographics. This is a major part of the "environmental scanning" that needs to be done if you wish to be proactive in your HR. Well here is a major tool that everyone should download The Brookings Institution Report. The report on the population figures from 2000-2008 and the changing demographics. Some of their findings include:

• About 83 percent of the U.S. population growth since 2000 was minority, part of a trend that will see minorities become the majority by midcentury. Across all large metro areas, the majority of the child population is now nonwhite.  
• The suburban poor grew by 25 percent between 1999 and 2008 — five times the growth rate of the poor in cities. City residents are more likely to live in "deep" poverty, while a higher share of suburban residents have incomes just below the poverty line.  
• For the first time in several decades, the population is growing at a faster rate than households, due to delays in marriage, divorce and births as well as longer life spans. People living alone and nonmarried couple families are among the fastest-growing in suburbs.
• What used to be white flight to the suburbs is turning into 'bright flight' to cities that have become magnets for aspiring young adults who see access to knowledge-based jobs, public transportation and a new city ambiance as an attraction.
• Ten states, led by Arizona, surpass the nation in a "cultural generation gap" in which the senior populations are disproportionately white and children are mostly minority.

Depending on where your company is will determine how you react to this data. But react you should. Pay attention to this data and think about the following;

1. How will this affect our future recruitment?
2. Does our employee population reflect the general population from which we draw our applicants? If the answer is NO, can we at some time be accuesed of discrimination?
3. What will the dynamics of our employee group be when the "majority" becomes a minority?

Those are just some starting questions. I will be discussing my views on some of their findings in the coming weeks. So stay tuned.

Seven Steps to Being Proactive: Lessons from Great Explorers

HR folks often complain about how they have to spend all their time being "reactive" and have little opportunity to be "proactive." Ever heard that? Ever said that? Yeah, right me neither (said with tongue-in-cheek.) SHRM has addressed that in the SPHR educational section of the learning system. They talk about the importance of being forward thinking and aware by being an "environmental scanner".

I  have always had a big interest in both the past and future. I read alot of history and biographies and I also read alot about the future. I was a big fan of John Naisbitt's  Megatrends: Ten New Directions Transforming Our Lives, Megatrends 2000 and Peter Capezio's Powerful Planning Skills: Envisioning the Future and Making it Happen. I am currently reading a book called Futuring: The Exploration of the Future by Edward Cornish. In his first chapter I was able to find a lesson that I thought was very applicable to strategic HR. He talked about the seven lessons we can learn from the great explorers of the past. These lessons include:

1. Prepare for what you will face in the future. There was never a successful explorer who did not sit down and make a list of what needed to be taken and prepared. Any explorer who did not do this preparation was not famous. They were dead. You cannot have a "we will cross that bridge when we get to it" attitude in HR.
2. Anticipate future needs. This is implied by lesson 1. You cannot predict the future, but you can anticipate it. You can review scenarios and determine what is likely to occur. So if you are going to drastically change a process, or benefit program, or staffing think about what all the possible reactions may be and prepare for them.
3. Use poor information when necessary. There may not be a good or perfect "road map" for where you are headed to, but someone has probably tried it already. They may have failed, but at least you have some information on which to base your decisions. Perhaps under a different set of circumstances you had tried to do something in the past and failed. You will not want to recreate that but at least there is the beginning of a "map" you can work with.
4. Expect the Unexpected. Realize that "the best laid plans of men oft go awry". Have a contingency for dealing with something occurring that you had not planned for. What do you do if the company outing you had been planning for six months is to occur the same day a tornado occurs?
5. Think long term as well as short term. Often projects, programs, and changes may get delayed, tabled or even cancelled in the short term. What can you do to foster your long term plans until a more favorable set of circumstances occurs?
6. Dream productively. This is your vision. But is not just fantasizing. Great explorers are doers. As Cornish says "For the great explorers, dreaming was not idle reverie but research- a mental exploration of what lay ahead. By fantasizing about future events, they could explore alternative goals and strategies and thus develop and select worthwhile and achievable goals, as well as imaginative but realistic strategies for reaching the goals they selected."
7. Learn from your predecessors. Read what you can that has been published by others who have attempted what you want to attempt. It is doubtful that you will be the first that has ever attempted what you want to do. (Most of us are not that brave.) But even if you are there may still be someone who may have done something similar that your can learn from. Remember the saying "those who ignore history are bound to repeat it."

There you go. Seven Steps to being proactive. Lessons we have learned from the great explorers. Follow their lead and you may lead your company to great things.

Be sure to document along the way so others may follow your foot steps as some point.