From their new book, Womenomics by Claire Shipman and Katty Kay
In the short term the U.S. economy may be experiencing a downturn, but it's the long term that has most employers wideeyed. We are facing a talent shortage unlike anything in history. As baby boomers retire they will leave an enormous unfilled hole of talent, which means professional women will become more valuable than ever.
It's time for a few numbers.
Baby boomers currently make up approximately one-third of the American workforce. Every year they are getting older and creeping ever closer to retirement. The first boomer was born on January 1, 1946; her name is Kathleen Casey-Kirschling. Now a New Jersey grandmother, Kathleen in 2008 became the first boomer to apply for Social Security benefits. But about eighty million more boomers will soon follow her.
The earnestly named Employment Policy Foundation estimates that by 2012 there will be a six-million-person gap between the number of college graduates and the number of people needed to cover job growth and replace retirees. That gap will grow bigger not smaller as more boomers retire.
Hold on to your diplomas, the war for talent is about to begin. Yes--we are peace-loving mothers who spend a large part of our day discouraging our sons from staging the third world war with their light sabers--but this is one battle we don't mind joining.
Even if some labor is sent overseas and still more is transfigured into a hard drive, economists agree that the demand for top-end, smart workers will outstrip supply.
Ten years after it produced its original, groundbreaking "War for Talent" survey, the consultant giant Mckinsey & Co. has compiled a new report that shows companies are more desperate than ever to retain good employees. In "Making Talent a Strategic Priority," Mckinsey surveyed seventy=seven companies in America, Asia, and Europe across a spectrum of industries.
The consultants gathered information from six thousand managers and executives, and their conclusion was overwhelming. The most important corporate resource over the next twenty years will be talent: smart, sophisticated businesspeople who are technologically literate, globally astute, and operationally agile. "Talent has become more important than capital, strategy, or R & D," declares Ed Michaels of McKinsey. And as the demand for talent goes up, the supply of it will be going down.
Women already make up half the workforce, and our ranks are set to grow faster than those of men over the next ten years. We outnumber men in such diverse occupations as accountancy, real estate, and health service management. But many women in their midthirties decide their stressful work hours are incompatible with raising a family, so they've been leaving mid-to-senior-management positions in alarming numbers. All of which means there is an even greater talent shortage and an even larger pool of strong female talent waiting to be tapped.
Smart businesses know this. Lori Rodriguez is the marketing director for a small firm of accountants in Tampa, Florida. Now in her midfifties, Rodriguez says that when she started out the attitude was very different. "My generation went to work and just kept going on the treadmill. We didn't think we could as for more flexibility, we were lucky to be there." But her firm, Kingery and Crouse, has now made flexible work arrangements a top priority.
Think about it. The cost of replacing professional employees is going up, not down. The total cost of replacing a senior manager can be three times that person's salary. According to some estimates, the cost of turnover for knowledge-based companies is even higher--a whopping 500 percent--and those are just the kinds of companies in which professional women tend to work.
Organizations know they can save millions by reducing turnover. And the best way to do that is to hang on to the skilled people they already have.
This combination of an impending talent shortage and the high cost of replacement means firms are more prepared than they have ever been to make compromises to keep the good people they already have. That's you, by the way.