Workforce Planning

Beyond being a key human resource competency, workforce planning—aligning strategies for building workforce capabilities to meet desired business outcomes—is a key element of an overall talent management strategy. Across the United States and globally, employers are struggling to find enough qualified workers to fill their available job openings. The “skills gap”—the disparity between the skills employers are looking for and the skills candidates possess—affects the entire economy.

Certain positions are more difficult to fill than others, and it is not just those on the high-skilled end of the spectrum. Employers have also identified middle-skilled jobs, those that require education and training beyond high school, but less than a four-year degree, to be difficult to fill as well. At the same time, there are pools of workers who might serve as a source of skilled employees, including military veterans and individuals with disabilities. The problem affects a broad swath of employers. According to a 2016 Society for Human Resource Management survey of human resource professionals, 68 percent of organizations reported difficulty recruiting for full-time regular positions over the past year. Half of those organizations cited lack of work experience, lack of the qualifying technical skills or competition from other employers as a primary reason for difficulty in hiring qualified candidates.

Meanwhile, the U.S. economy is becoming increasingly dependent on people who work outside traditional employment models. The "gig" economy has always existed to some extent, but it bloomed in the wake of the Great Recession of 2008. Gig workers are mostly independent contractors and freelancers, but they can also include agency temps, on-call workers, contract company workers, self-employed workers and traditional part-time workers. Analysis by the American Action Forum based on government statistics concludes that in 2014, there were between 20.5 and 29.7 million people in the alternative work arrangements that make up the gig economy. This translates to between 14 and 20.3 percent of all employed people in the United States, and those numbers are growing.

A recent report by Deloitte summed up the changing world of work: "The evolving workforce is a mixture of employees, contractors and freelancers, and—increasingly—people with no formal ties to your enterprise at all." Many start-up businesses have successfully adopted the worker arrangements of the gig economy, fueling its growth. Uber and Lyft are the most well-known examples of entrepreneurial efforts aimed at gig workers. More entrepreneurs across the economy are now scouring for new opportunities to take this model to other sectors, especially in services


The implications for human resource executives of these two trends—the persistent skills gap and the rise of the gig economy—are expected to intensify over the next 10 to 15 years as a collection of related challenges emerge, including:

  • A U.S. baby boom generation that continues to retire
  • A more connected, 24/7 and interdependent global economy
  • The need for greater technical skills from workers to meet the demands of jobs produced by the modern economy
  • A general trend among those 35 and under of being open to working as independent consultants/contractors and on a project-by-project basis, rather than a traditional employment relationship 

Workforce Innovation and Opportunity Act

The federal law, the Workforce Innovation and Opportunity Act (WIOA), will leverage government resources to support training and education programs for employers. WIOA authorizes federal employment and training programs and is designed to help individuals acquire the knowledge and skills necessary for today’s economy and connect employers to the skilled workers they need. 

Demand-Driven Partnerships

Increasingly, employers, higher education and business groups are working to develop their own solutions to the skills gap. These run the gamut—from individual companies setting up work-and-learn programs (modernized apprenticeships, for example) to trade associations working together to develop common models for certifications and other standards to nonprofit intermediaries, such as Skills for Chicagoland’s Future, that develop demand-driven approaches to connecting businesses with education to ensure workers are trained with employer-needed skills.

Outsourcing

Organizations across the United States are grappling with how to leverage the strengths of the gig economy for their own needs. More of their positions and functions—from human resources to information technology and customer service—may be tailor-made for freelancers and the self-employed, with resulting savings for the entire enterprise. This poses opportunities and challenges for executives responsible for the overall workforce.​

Social Security and Other Entitlements

These 20th century inventions have buttressed societal stability and motivated generations of employees to stay within the traditional workforce. These programs are also funded almost entirely by employers and employees outside of the gig structure. To be retooled for the long haul, policymakers will need to consider how government support programs are affected by the changing nature of work if they are to continue to provide stability for the 21st century.​

Untapped Workers

Across the country, there are pools of workers and job candidates who do not easily fit into the career paths created by the rapidly evolving economy. Nonetheless, these men and women possess skills, knowledge and experiences that would benefit employers. Military veterans, for example, have developed leadership skills, organizational expertise and technical skills while serving their country, but find it challenging to navigate the transition back to civilian employment. Other untapped groups include people with mobility and other physical challenges, as well as workers who have been displaced by massive shifts in the economy and a reduction in global demand for their skills.

Outlook: The WIOA law is designed to assist with hiring and training needs and is beginning to be implemented across the country. In addition, while state and local governments have publicly struggled with how to regulate the gig economy, it is unclear how policy changes at the federal level may impact gig workers and the companies and individuals that work with them. Gig economy policy could encompass everything from entitlement reform to labor–management relations. Numerous federal, state and local initiatives are helping to support the training and hiring of displaced workers, veterans and other untapped job candidates.​