Tag: baby boomers

Ch Ch Ch Changes

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The Baby Boomers may have digested more workplace changes (1970-2010) than any prior generation, moving from an industrial to a post-industrial, services, or virtual world.  The post-Civil War generation saw the initial transition from an agricultural to an industrial society (1880-1920).  Their grandchildren saw the full flowering of the industrial world, with incredible advances in manufacturing, transportation and communications (1920-1960). 

Nearly every usual business practice or function in 1970 has been superseded or turned upside down in the last 4 decades.

The office world of 1970 looked much like 1920.  It was hierarchical, manual and rigid.  Secretaries assisted managers.  Typing, filing, shorthand and bookkeeping were essential skills.  Today, only a few senior execs or sales staff members have administrative or executive assistants.  Everyone else completes their own clerical functions as an integral part of work.  Paper ledger forms and 10-key adding machines have been replaced by Enterprise Resource Planning (ERP) systems in even the smallest firms.  QuickBooks offers capabilities that were unimaginable in 1970.

Mainframe computers automated high volume transaction and office tasks in large firms in 1970.  Computers have since expanded to touch every function, moving through minicomputer, PC, network and cloud phases.  Sophisticated applications exist today for every function and industry, including a dozen end-user tools such as spreadsheets, databases, word processing and collaboration/time/task management.

Communications has progressed from rotary phones, party lines and PBX systems to WiFi, VOIP systems, wireless phones and personal digital assistants.  Media has progressed from AM transistor radios through 8-track and VHS tapes to disks, digital downloads, massively multiplayer games and social media entities.

Companies today pursue core competencies, partnerships and virtual structures in contrast with the old vertically integrated ideal or financial portfolios of conglomerates.  Firms are financed through a broad range of instruments and investors throughout their lives rather than with simple stocks, bonds and preferred stocks.

Companies today compete globally and engage in partnerships with suppliers, customers and competitors.  They also compete with suppliers, customers and competitors, including small entrepreneurial start-ups.

Support functions are more important today.  The Personnel function has become Human Resources.  Marketing has assumed a strategically important role in product development and sales management.  Finance is a strategic partner in decisions.  Many functions are outsourced.

Product development is managed through a gates and phases process.

Operations functions have been totally transformed.  Quality has evolved from a technical necessity to an organizing principle.  Processes shape decisions.  Variability and waste are shunned.  The near-perfection of Six Sigma is pursued and achieved.  Firms benchmark and copy best practices.  Forecast based push systems have been replaced with JIT pull systems, reducing inventories to zero and lot sizes to units of one.  Mass production has been replaced by a network of focused factories, modular manufacturing and outsourcing.

Strategic planning has migrated from an infrequent fully integrated top-down approach to an iterative  process that massages top-down and bottom-up factors within a balanced scorecard composed of assets, operations, stakeholders and final goals. 

Suppliers are managed as long-term partners, instead of short-term contractors.  Staff members are treated as partners, even though company and staff initiated turnover is much higher.  Simplistic theory X and Y approaches (employees are good or bad) have evolved into situational leadership type approaches that match task/people dimensions to current needs. 

These generic changes have occurred seen in every industry and function, layered on top of the major technical and professional progress seen in each area. We are rapidly approaching a time when virtual organizations are a reality because they are more effective than forms suited to an industrial era.  Baby Boomers have experienced this whole cycle of change and are well situated to mange the final transitions.

2009 and 2010 College Grads Struggle

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http://www.dailytoreador.com/la-vida/college-s-seniors-face-unusually-dismal-job-market-1.2245660

http://www.macon.com/2010/04/25/1106422/tough-assignment.html

http://www.marketwatch.com/story/2010-college-graduates-to-face-a-highly-competitive-job-market-but-one-that-may-pay-better-than-last-year-finds-careerbuilders-annual-forecast-2010-04-14?reflink=MW_news_stmp

http://www.tampabay.com/news/education/college/new-college-graduates-face-a-tight-job-market/1090306

http://www.economist.com/business-finance/displaystory.cfm?story_id=16010303

http://online.wsj.com/article/SB10001424052748704207504575130171387740744.html?mod=rss_com_mostcommentart

http://www.usnews.com/articles/education/best-colleges/2010/04/29/rosier-job-outlook-for-college-graduates.html

From sunbelt Florida to Georgia to Texas the local hiring reports remain negative for college grads for the second straight year.

When engineering students can’t find jobs, you know there’s a major problem.

When the Wall Street Journal  writes about white collar parents and unemployed children, you know there’s a major problem.

The recovery graph in the latest Economist article shows that recovery is far slower than in past recessions.

Only the US News & World Report headline writer could find a way to put a positive spin on the situation with “Rosier Job Outlook for College Grads”, but even they recognized that “the job market remains treacherous for college grads”.

Net job creation finally turned positive last month.  The leading economic indicators have been positive for 12 months in a row.  Some reports, like record 27% housing sale increases, are “off the charts” positive, even if driven by an expiring tax credit. 

Nonetheless, this will be a slow recovery.  The 2002-2008 recovery was panned as the jobless recovery.  Historically, financial crises require significant time to heal.  The overextended American consumer, government, banks and dollar need time to adjust.  The flexible US workforce has responded by increasing productivity by 6%, reducing the need to hire.  Corporations budgeted for capital projects and new hires in 2010, but have not yet released the funds. 

Like “the little engine who could”, it will take time for this economy to build up a head of steam.  As the economy recovers, hiring will increase and employers will welcome those new college grads to cost-effectively replace those retiring Baby Boomers whose investments have gained 70% in the last year.

The Sky Has Stopped Falling

tomkapostasy1 Comment

Between October, 2009 and April, 2010 the US economy lost 4.8 million jobs: nearly 700,000 jobs per month.  In the last three months it has lost a TOTAL of 100,000.

How and why employment will recover faster than expected.

  1. The change from -700,000 jobs to zero is a major trend, indicating net job creation is imminent.  Obama’s budget forecast of 100,000 adds per month is conservative political positioning so that the real results will exceed expectations.  He and his party have an election to contest in November.
  2. GDP growth was 3% in the 3rd quarter and 5% in the 4th quarter, accompanied by eye-popping labor force productivity numbers above 5%.  Some hiring is required to meet existing production needs.  It has begun.
  3. Inventory replenishment will continue as it has in all other recoveries.
  4. More than half of the stimulus money remains to work through the economy. The second stimulus package is necessary political and psychological posturing and will be too late and too little to make a material difference.
  5. Construction has nowhere to go but up after 3 years of decline.  Even with ongoing foreclosures, there is pent-up demand for new housing.
  6. Consumer durable goods’ spending is ready to bounce back.  Cars, washers and televisions have limited technical and acceptable status lives.
  7. Businesses are ready to invest in capital goods, productivity improvements, IT systems, new channels, new products and exports.  Businesses have the resources to invest after lower than average spending since 2000.
  8. 5-8% growth in China and other developing countries increases demand for US exports and raises prices for US imports.
  9. Once the global recovery is underway and the extent of US monetary expansion is plain (leading to inflation), the US dollar value will fall and US exports will increase.
  10. The retirement of the Baby Boomers will lead to specific hiring in sectors of high demand: health care, financial services, housing and travel.
  11. The retirement of Baby Boomers will increase from 2.2M per year to 3.7M per year in the next 8 years, adding an average of 1M jobs per year.
  12. The US population will continue to grow at 1% per year, leading to growth in aggregate demand of 1% per year.
  13. US labor force and total factor productivity continue at high historical rates, generating the underlying added output which leads to wages, profits and rents which create the next round of aggregate demand.
  14. There are long-term positive employment trends in a majority of the US industry sectors.  The US economy has continued its transformation into an information economy.  Manufacturing employment is now less than 10% of the total.  We may have found the bottom for this sector.

 

There are certainly national and global risks in the current economic climate.  However, the US economy has shown increasing resiliency in the last 60 years, recovering from recessions in spite of a variety of headwinds.  The economy has recovered during Republican and Democratic administrations, in spite of helpful and harmful national policies.  There are many reasons to believe that the current recovery will be strong.