"The Incredible Shrinking Workforce"

Several years ago Flad & Associates, a Madison-based architectural firm, began looking at strategies to handle a shrinking workforce, which experts warn is looming nationwide in the next 10 to 15 years.

"The minor labor shortage of the '80s plus the prediction of a shrinking workforce made us really focus on these issues," said Peggy Robbins, a principal with the firm. "We knew it wasn't going to be just a blip." In the late '80s, the economy slowed, new construction stopped, and many architects left the industry. A whole generation of college students chose not to enter the field.

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"Right now those people would have 20 years of experience and be stepping into management roles," Robbins said.

In years past, Flad was able to hire architects with supervisory and management skills. Now, they've had to create training programs to help prepare employees to move into leadership roles, and younger workers have had to take on more responsibility faster. The firm, which employs just under 200 in Madison, has also leveraged technology. A wide-area network connects the six offices around the country. If one location becomes overloaded or experiences a staffing shortage, work can temporarily shift to another office through file-sharing.

And they've become less restrictive about scheduling. "Years ago we insisted on a 40-hour week working 8 to 5," Robbins said. "We've become much more flexible in terms of number of hours as well as when employees work. We want to keep people in the workforce and adjust to their needs. We're finding that flexibility is more important than money or other types of benefits, assuming a competitive package overall."

Some workers nearing retirement age have chosen to continue with the company on a part-time or project basis. Several architects in their late 60s and early 70s still work at Flad, including the former CEO who at age 65 stepped down to take on managing the Madison Overture Center project for Flad. The veterans team up on projects with newer employees. "It's been a perfect mentoring system and support back and forth," Robbins said.

To attract new workers to the company, Flad has stepped up recruiting on college campuses and offered summer scholarships for students. They've also sponsored visas for international students and recent graduates to augment their labor pool.

By being proactive and putting programs in place ahead of the coming labor shortage, Flad has increased its chances of remaining competitive.

Supply and demand

The problem is one of supply and demand: more jobs, fewer workers. A record number of workers are nearing retirement age at the same time fewer numbers of workers ages 18 to 24 are entering the workforce. The first of the nation's 77 million baby boomers turn 60 this year, and the Congressional Budget Office estimates that growth in America's labor force will slow by nearly half in the next 10 years. "Based on projections, in 10 to 15 years we (in Wisconsin) are going to face a serious shortage," said Roberta Gassman, secretary of the state Department of Workforce Development (DWD).

Currently, one out of every eight workers in Wisconsin is 65 or older, according to the DWD. In 2020, projections place one out of every six workers older than 65, and by 2030 one out of every five.

At the same time, DWD labor economists predict that Wisconsin will add 394,000 jobs before 2012, a 13 percent increase. Replacement needs may add an additional 706,000 openings.

Wisconsin already faces a shortage of skilled labor, says Luke Whitburn, branch manager of Manpower, Inc. He said his customers feel the pinch on their production floors. "Ultimately the concern will cause a wage inflation. Companies will have to be creative in their recruiting," he said.

Luckily for employers, increasingly those near retirement age are not ready to settle into traditional retirement. "We see more and more people who want to work in the later years of their life," he said. "They may work part time, they may volunteer, they may be offered a program to work flex time for their previous employer. But they want to stay active."

Health-care sector faces a major challenge

The situation in health care particularly concerns the DWD because of estimates that in the year 2012 one in five jobs in Wisconsin will be in health care, a 30 percent increase in health-care jobs.

"You can't export health care jobs to another country," Gassman said. "We need people right here in Wisconsin to ensure our citizens have their health-care needs met."

Together with the Department of Regulation and Licensing and the Department of Health and Family Services, the DWD recently launched a statewide survey of registered nurses focused on getting a clear picture of problems affecting retention rates. This information will be used to develop a strategy for recruiting, training and retaining nurses.

Research shows that back injuries are one of the top reasons health-care workers leave the field, so the DWD has promoted safe lifting practices using slings and mechanical devices, and made grants available for health-care facilities to train their workers.

"Other states that have promoted safe lifting have driven down back injuries and, as a result, worker's compensation claims, as well as improved employee outlook and retention," Gassman said. "After we spend years training them, we don't want them to leave."

Because health care currently faces labor shortages, many hospitals and clinics already have creative solutions in place to attract and retain workers.

Meriter Hospital, for instance, began a cardiac critical care nurse residency program two years ago. They foresaw a large number of experienced nurses retiring in 5 to 10 years and taking a critical pool of knowledge with them, leaving large holes to fill in the cardiac critical care unit, the operating room and the emergency room, areas that generally require more seasoned nurses. The residency program provides concentrated experience in those areas. "Looking at the dynamics of the workforce, how do we look toward a future where we're going to have to put (recent) graduates into these positions?" was a key question, said Aindrea Lindsay, cardiac critical care nurse residency coordinator with Meriter Hospital. "We want to produce a critically thinking professional practitioner who is highly competent and satisfied with their job and will give us a commitment to the unit."

Lindsay counts the program a success. Within the last two years, eight nurses have completed the residency, and six remain with Meriter, stats that Lindsay said are better than average, especially among first-year nurses who are at risk for leaving the profession.

Because of the success of the program, Meriter now also offers a residency in the medical-surgical area.

To help attract new nurses leaving college, Meriter provides up to $15,000 to help with student loans. For nursing students between their junior and senior years, Meriter offers 12-week summer externships working closely with a preceptor, a term for a mentor in the nursing field. Kris Holmes, human resource manager for Meriter, estimates that between 80 percent and 90 percent of the student nurses who participate in externships hire on with Meriter after graduating.

Meriter employees can also take advantage of a liberal tuition advance program to pursue a degree or return to school. Any employee with service of more than six months can receive up to $5,000 in tuition reimbursement a year. Many health unit clerks and nursing assistants use it to advance within the organization. Holmes cites the case of an employee in housekeeping who became a certified nursing assistant and then completed nursing school.

There are some departments within Meriter where the average age of employees is 50 � not uncommon when the average length of tenure is more than 14 years. "We don't want them to retire all at once, so we have to get creative if we want people to stay on longer," Holmes said.

If a nurse can't work eight-hour shifts, Meriter tries to be flexible. The nurse might be asked to take a four-hour shift or precept a new nurse or work in another area. "Can we utilize them for the summer if they spend the winter in Florida?" she said. "We'll meet their needs so we can continue to have nurses here." She calls this job sculpting.

Meriter's focus on finding creative solutions to worker shortages is paying off. "We don't have many openings right now," Holmes said.

Finding solutions

Eve Scheffenacker, principal of ByWord, a human resources communications consulting firm, says companies need to take a three-pronged approach in creating a strategic workforce plan to address upcoming labor shortages.

It's not enough to find new people; companies must transfer knowledge from the people who are leaving and keep the people they've got.

"Most companies have some programs in place that will do these things, but they don't necessarily look at them as retention tools," she said. "For example, mentoring and succession planning are a transfer of knowledge. But rather than looking at them just as something you do for executives, make them something you do for everybody."

She is also a proponent of mandatory training for all managers, a key to retaining employees because good managers can equal satisfied employees. Employee climate surveys consistently show the most common reason workers leave is because of their immediate supervisors.

Companies can also make lateral moves more available to existing employees. "That way it doesn't become a matter of people leaving if they don't like their job," Scheffenacker said. "But that comes back to training managers on how to help employees see where else their skills can be used within the company."

Increasingly as the labor market tightens, companies will have to hire differently. "Companies are going to have to look for people with soft skills like customer service skills or being able to work on a team versus what they have been trained to do," she said. "Don't worry if they don't know how to use Excel. They can learn how to do that."

But this requires a commitment from employers. "The best investment we can make for our future is investing in our current and future workers," Gassman said.

David Namura, manager of governmental relations for the Society for Human Resource Manage-ment, says the best thing employers can do is create lifetime employability. "If an employee 10 years from now has the exact same skills they have today, that employee will not be a very valuable asset to an organization," he said.

Employees who are provided continuous learning and professional development opportunities are more engaged and committed to their employers, he said.

"It's unreasonable in a tight labor market to think that everybody you hire is going to be able to walk in the door and be able to move into any position you want," said Judy Peirick, vice president of human resources for Webcrafters, a printing company with facilities in Madison and Westport. "But with some specific targeted training they can be very successful."

In the past five to six years Webcrafters has seen a growing number of new hires who don't speak English. They are mainly Mexicans, but also Russian and Korean speakers as well. The company has partnered with Madison Area Technical College to assess the skills of their workers and develop training programs to meet their needs, including classes in English as a second language to teach safety and help workers understand their jobs. They've also identified gaps in math skills, so they offer individualized tutoring in job-specific skills like how to read a ruler or how to count the number of books that will fit into a box. "By providing this training, workers will hopefully be better equipped to learn more technical skills and move into higher-level positions," she said. "But this is the type of thing that takes years to see a return on. You need to be committed to this because it's the right thing."

Some companies still aren't paying attention to the projected labor shortage, and according to Scheffenacker, they need to start planning.

"They're saying when it becomes a problem we'll deal with it," she said. "But by then you're behind the eight ball. Unlike the late '90s, employers aren't going to be able to wait this out. Just offering people more money isn't going to solve the problem."