Text Box: As you’ve read in this publication and probably others, we face an accelerating worker shortage over the next 30 years as Baby Boomers leave the labor market and are replaced (at a much slower rate) by young recruits. Recently, noted economist Jeff Thredgold pointed out to an audience of business leaders in Utah that we may well be grossly underestimating the magnitude of the problem: While official Office of Management and Budget figures show the U.S. economy creating 3.8 million new jobs in the year beginning March 2005, those figures are based on a survey of mid- to large-sized businesses. If you add the extremely robust state of small business, traditionally the best producers of new jobs in our economy, Thredgold estimates we may have actually added 8.3 million new jobs in that period! Interestingly, it’s about the same number we would use to account for the drop in the nation’s unemployment figures for the same year. In Utah, we are currently seeing unemployment rates below 3 percent! That means, in effect, we have people working who had no intent to work! If this is what we have to look Text Box: A Challenging Future: Retention, Productivity And Education Text Box: forward to for the next 30 years, the challenge for any business is clear: We need to work creatively and intelligently to find enough people to do the work we need done and find ways to do more with fewer people. We need to learn how to identify our top performers and find out what makes them top performers and how to keep them with us. And we need to identify potential top performers from our limited selection pool – before our competition snaps them up. The second point, having to do more with fewer people, is reflected in the productivity statistics, another area Thredgold addressed. The primary factor preventing the worker shortage from becoming an immediate crisis has been dramatic, historic increases in worker productivity. To sustain that trend is another challenge we cannot fail to meet. Study after study has shown that proper application of valid and reliable job-fit measurements in the selection and promotion process results in increased productivity. The process is not costly, compared with most alternative methods of increasing productivity Text Box: (such as investing in more efficient capital equipment) and can be implemented very quickly (compared with capital equipment upgrades). Returns on investment of implementing job-fit technology have often been documented in the 20:1 to 50:1 range. As our economy moves further away from manufacturing along an increasing curve of technology and innovation, education becomes an increasingly important factor in the equation. As Thredgold notes, in 1980, a college graduate could expect to make 25 percent more in lifetime earnings than his peers with only a high school diploma. That number has now risen to 90 percent more! In addition, every full year of post-high school formal education or training of any kind results in a 15-to-20 percent increase in average earnings. “If you think turnover is expensive now, watch its cost rise in the next few years,” Thredgold told the audience. If his predictions are on target, business leaders will be well-advised to also pay attention to the other well-documented contributor to retention and productivity – leadership selection and development. How will you respond to the challenges?

Volume 4, Issue  4

Edited by John W. Howard, Ph.D.                                                              Annual Subscription Rate  $ 36.00

 ©2006, Performance Resources, LLC,  and Profiles International

Truck Driver Turnover At All-Time Highs

 

According to the American Trucking Association, the rate has been increasing steadily from the beginning of 2004 when the turnover rate was 120 percent. The fourth quarter saw a rate of 136 percent! In 2005, large carriers averaged a turnover rate of 130 percent, the highest annual rate on record. According to the ATA, trucking groups are working hard on reducing the rate.
Text Box: “...Dr. John Sullivan suggests following Dell Computers’ metrics approach for quality of hire: ‘By looking at the number of new hires that become top performers within 12 to 18 months, they are hitting the nail right on the head.’”

Volume 4, Issue 4
Text Box: Taken individually, any of these results would be an impressive argument for the use of assessments...