Demographics and the Impact on the Workforce

February 14, 2023

We see the articles all the time: usually around how to attract, motivate, and retain employees.  We have always had a multigenerational workforce, but the workforce issues we’ll face in the next 5-10 years are a little scary. The baby boomers (born 1946-1964) are almost 72 million or 19% (and declining) of the workforce today. Generation X (born 1965 - 1980) are 65 million or 36% of the workforce. Millennials (born 1981 - 1996) are over 72 million or 40% of the workforce. Generation Z (born 1997 - 2012) are 68 million or 6.2% of the workforce (obviously this will increase over the next decade). See, that last generational number is a little alarming.  As baby boomers retire, we don’t have the same generational numbers to replace that knowledge worker base.  Sometimes you’ll see this referred to as the 20/60 differential (ratio of workers in their 20s versus their 60s).  What this means is that the labor force will remain tight and restricted for at least the next 7-10 years.  Let’s not even get started talking about the Labor Force Participation Rate!  Nonetheless, companies and workers have an opportunity to change the way we find work, and the way we work altogether.

What Can We Do?

First, the current M.O in human resources is traditional staffing/recruiting based on resumes and traditional recruiting practices.  A job seeker sees a job description, you apply, you wait!  Or, a recruiter sees you, reaches out, and the game begins.  Not only are we well past this from a technology point of view, but now the demographics are changing and requiring a much more advanced approach.  Enter Upskilling, Reskilling, and Data-Driven People Insights.  Many large companies have started to move in this direction, but are facing an issue of legacy and new system “spaghetti”, where the systems themselves are actually restricting the company’s ability to gain the necessary insights to make quality decisions faster.  

Furthermore, the younger generations are demanding a better experience, and they can and should!  Millennials and Gen Z will dominate the workforce in the foreseeable future and it’s time companies make the move to understand their potential.  Companies will also need to focus more resources on upskilling and/or reskilling their workforce to meet the demands of those positions.  These workers can absolutely do this, and should be given the opportunity.  This will require a broad behavioral change in the industry, and that’s a good thing. 

The parallel challenge will be leadership training.  As the boomers retire, new leadership needs to emerge and companies will need to invest in leadership training.  Leading a team is much different than working in a certain “job”, so to speak.  These upskilling/reskilling initiatives should happen simultaneously, as companies are also changing their systems and SOPs around pre-hire and post-hire.  This creates a virtuous cycle of constant improvement, which will improve employer brand, and will improve the harmony and morale on teams.  If you’re not ready, then meet as a team and start planning for your future.  The market is changing, whether we like it or not, and that’s not necessarily a bad thing.  The future looks bright, so make it bright for your team!  

At Scoutr, this is our mission - and our goal is to help provide leadership with the necessary insights to implement positive change within their teams.  As the demographics change, make technology and hiring, onboarding, and retention process improvement a top priority for the future, and let’s all embrace the future of potential!   

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