A welter of recent books is predicting a U.S. labor shortage, implying that it will be a hot job market for the foreseeable future. A few examples: Get 'em While They're Hot: How to Attract, Develop, and Retain Peak Performers in the Coming Labor Shortage; Lost Knowledge: Confronting the Threat of an Aging Workforce; Workforce Wakeup Call; and Ken Dychtwald's Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent.
Don't be so sure. Here are six reasons to expect a U.S. labor glut, which would make it harder to find good jobs:
Corporate downsizing has only just begun. Corporations are realizing that elaborate infrastructurebig central and regional offices, staffed with legions of managersis unnecessary. Big companies are seeing nimble new organizations compete effectively with the big guys. For example, the new book The Starfish and the Spider: The Unstoppable Power of Leadership Organizations points out how infrastructure-light companies like Skype, Wikipedia, and Craigslist are beating megacorporations because of their small staffs. For example, Craigslist has significantly cut into the classified ad revenue for newspapers. Many experts predict that corporations have gotten as lean as they can be. I don't agree: I believe the downsizing has only just begun.
It's more cost-effective to replace employees with technology. Why? Because technology is continually getting better and cheaper while employees are becoming more and more expensive. The costs of employee benefits are skyrocketing, as everybody knows, but so is the cost of employee lawsuits for sex and race discrimination.
More just-in-time hiring. Even trailing-edge companies now realize that they need few employees 52 weeks a year, year after year. Not many employees have a skill set so current and so important to justify paying them for all 52 weeks, not to mention the expensive benefit package that permanent employees expect. Employers know that many full-time employees spend part of their year marking time during slow periods (reading, chatting, playing on the Net, and taking sick days when not sick), contributing less than what the company is paying them. So, employers have been hiring on a just-in-time basis, signing up people with the skill set needed for a particular project, on a contract that expires when the project is complete. When the next project comes up, the employer hires people with the right skill set for that project. The result of just-in-time hiring, of course, is a smaller workforce.
Global hiring is ever more desirable. More jobs can be done from home, so employers can recruit worldwide. Thanks to the Internet and offshoring companies such as Infosys and Tata, an employer in New York can easily recruit the best talent in the world, whether it be a homebound quadriplegic in Manhattan, a 16-year-old in Israel, or 10,000 engineers in India. And because all those people will be competing for a position, not merely those who answer an ad in the local newspaper, as in the old days, worldwide recruiting will lead to a glut of applicantswho won't be as expensive to hire.
Some corporate leaders and politicians are wringing their hands about the lack of American science and math graduates. Fact is, that will not put U.S. companies at a disadvantage. There are so many science and math graduates in megacountries like India and China that U.S. companies can find most of the help they need abroad.
Illegal immigration will ensure a supply of low-level workers. America seems to have decided not to get serious about enforcing its borders. So the ever accelerating influx of illegal immigrants will provide all the cheap labor the United States needs.
The boomers are not retiring in the predicted numbers, some because they haven't saved enough for retirement, others because they want to keep working. They're the healthiest aging population in history (hence the cliché, today's 60 is the new 50) and thus able to keep working longer. Plus, retiring to the golf course has become passé.
So how should workers and job seekers prepare for a glut of labor?
Be a star: Your negotiating power is eroding. Develop as many skills as possible, make sure you're good at what you do, and build connections with higher-ups in your organization, or you will be vulnerable to salary cuts and downsizing.
Become an employer, not an employee. For some people, a wise move is to learn how to start your own business so you can use the employee glut to your advantage. Rather than an M.B.A., get more practical help for free through the workshops, mentors, and online advice offered by the Small Business Administration.
Adopt a less materialistic lifestyle. Don't see stardom or self-employment in your future? Your income will most likely decline. The good news is that you needn't be less content as a result. Start to learn the truth that contentment rarely comes from big income. Many people who live in more modest housing, drive older cars, and eschew shopping as recreation can live lives as contentedly as those with tonier lifestyles. My formula for contentment: good work, good relationships, good avocations.