The staffing and recruiting industry has always been a bellwether for the rest of the global economy. Since the second half of 2009, that industry has gained positive momentum, according to Owen Sullivan, executive vice president of Milwaukee-based Manpower Inc. and chief executive officer of Manpower subsidiaries Right Management and Jefferson Wells.
The overall economies in southeastern Wisconsin and the rest of the world are showing signs of improvement, and Sullivan said he is optimistic that will continue in 2001.
Then, as more companies continue to turn part-time temporary jobs into full-time positions, the problem that will face this region will be a shortage of qualified workers, he predicts.
“The year 2010 was a good year for (our industry), both in the U.S. and across the globe,” Sullivan said. “When I talk to my clients and peers, everybody starts with a sense of optimism and then adds a number of qualifiers, which I think speak to a continued degree of uncertainty people are dealing with.”
Sullivan said that changing tax regulations, health care reform issues and changing roles of government at the local, state and federal levels have added to the degree of uncertainty that executives and companies are feeling, but most industries have seen a good start to 2011, despite all of the unknowns.
“We believe the U.S. is seeing some very positive momentum, and I think our clients are in pretty good shape,” he said. “It’s now a matter of a company getting that confidence and stepping forward to feel like they aren’t alone at the party. We’re seeing that happen and we’re convinced that that will continue to pick up over the years.”
As consumer spending picks up and the housing market bottoms, businesses will have more confidence in the economy, which will offset some of the uncertainties they worried about right now that are holding back growth plans.
“At some point you have to say, ‘Fine, there are always going to be uncertainties,’ then you quantify them, risk rate those and then go ahead and make some good solid business decisions,” Sullivan said.
The economy will grow as executives gain more confidence in the recovery, he said.
“This recovery has been fairly typical in terms of overall patterns,” Sullivan said. “Yes, the recovery is a little slower because the recession was deeper, but the patterns indicate we are now seeing clients starting to replenish inventory and respond to new demands in the market place.”
During the latter half of 2010, more companies were adding temporary workers to fulfill their inventory demand needs, and more of those jobs are becoming permanent placement positions, Sullivan said. He predicts that trend will continue through 2011 and into 2012.
“I think company growth will continue to occur,” Sullivan said. “The issue we are already facing, across all industries, which will continue to grow as well, is the issue of talent. Globally, and even in the Milwaukee region, company growth will be stymied by a lack of qualified, skilled workers available for hire.”
As demand picks up and companies continue to ramp up production, the need for skilled workers and workers with the right skills will be the biggest concern, Sullivan said.
“We did a few surveys at Right Management that suggested that 30 percent of employers in the U.S. and up to 34 percent across the globe were having problems finding (employees with) the right skills.”
The transformation of jobs through the use of technology, the introduction of social networks and the globalization of the workforce has all contributed to the lack of skills in the market place, Sullivan said.
“It becomes a question of whether or not the educating of skills in the market place has kept up with the changes in the workforce,” he said. “Right now, we have a talent mismatch driven partly by a skills mismatch through education, but we also have demographic issues where, according to some studies, 65,000 people a day are reaching retirement age.”
The retirement trend will sustain for the next ten years, he added.
“It’s a global issue and one that is already affecting companies’ hiring practices, but also one that will become an even bigger issue if the problem isn’t addressed now,” he said.
Addressing the talent shortage issue starts with understanding the core problems associated with the gap in talent, Sullivan said.
“Once company leadership understands the issues and can undergo a gap analysis of their own companies in terms of skills and the cost of developing and maintaining the necessary skills, they can become more strategic in how they address some of the root causes of the problem,” he said.
A major problem is that a high percentage of children in Milwaukee do not graduate from high school, Sullivan said. The business community needs to help solve that problem in order to address the talent shortage, he said.
“We can begin to solve a lot of these issues with collaboration,” Sullivan said. “We’ve begun to do that but it’s going to take more companies putting on their education hats and getting through to the young people in the community. We need to inform them there are other opportunities, great opportunities and great paying jobs available for these types of workers. It’s ok to be strategic and socially responsible at the same time.”
On the heels of the recession, the talent shortage needs to be a front-of-mind concern for businesses, Sullivan said.
“This issue is what is going to halt our recovery if we don’t address it,” Sullivan said. “This is an urgent need that spans across all industries. It’s a problem right now. The year ahead will not be a problem of access to capital it will be about access to people, access to the right people.”
