Talent Shortage or Transformation?

Talent Shortage or Transformation?

ChairsThere have been ongoing debates for a decade or more over whether or not there is a talent shortage.  If there were real talent shortage we would have seen much different corporate behavior than we actually do see. If firms genuinely could not find the people they needed, they would have either raised wages to the point that the jobs became highly attractive or they would have invested significantly in training.  Neither has happened.

While I have no hard data, my experience and that of colleagues seem to agree that there has actually been a cut back in technical training and in internships (that are often used as a way to train or provide experience to younger potential workers.) Salaries are a great predictor of desire and demand, but no one has recorded a large increase in pay for STEM graduates or experienced help. The supply has obviously been adequate to meet the demands of most organizations.

Yes, in some cases people are working more than they used to because there are staff shortages. But again, these are economic decisions not supply issues. It really is not quantity that is important, but quality and the ability of the fewer engineers and scientists to leverage automation and computers to make themselves more productive.

There are many non-practicing engineers in the workforce who have chosen not to be engineers because they can earn more money doing other things. Many scientists eschew corporate life and choose academic life instead. Technicians have become scarce because potential workers realize that the jobs they do are not well paid and they work long hours, sometimes in harsh conditions with little gratitude.

The New Economy- From Hardware to Software

What has been happening is a transformation of the workplace.  We are shifting from a world where the glory was in hardware – making, building, and inventing machines and tools – to one of design and software.

Most firms in the United States and Europe do not make anything directly. They are innovation and design centers, neither of which need or use large numbers of engineers, scientists, or technologists. Apple prints on the back of every iPhone “Designed by Apple in California. Assembled in China.”

Apple and other firms depend on a rather eclectic group of talent – people who make up a large portion of what Richard Florida has called the Creative Class. These are writers, designers, artists, anthropologists, software programmers, and the like. Silicon Valley is full of these folks. I belong to group of them called NextNow which is a global network of a few hundred people who are mostly what would be called bohemians. One invented Hypertext, another the term e-learning. Some do research, some write books or make movies, some have a technical background, but it’s not how they earn a living.

Many of these people do not have a college education and are self-taught or they apprenticed with a master or studied something very different from what they do.

 The New Worker

The manufacturing portion of work is done more and more by automated tools and software or by robots.  It does require engineers and technicians to build these, but far fewer than in the old economy. And, they are aided by all kinds of automation. For example, architects can work essentially alone these days. Yet, Frank Lloyd Wright had scores of draftsmen drawing plans and clerks and technicians reproducing blueprints as well as apprentices. Today a CAD machine, coupled to building code information and material specifications, does it all.  Similar reductions have occurred in almost every field from civil engineering to the semiconductor industry.  Automation has supplemented engineers, reducing the need for them and driving efficiency. Automation is entering the hospital, the surgery, and even the school with the advent of MOOCs that allow education to be distributed from one professor to thousands.

The new economy growing around us needs and uses a very different type of worker. The new generation of worker has a broader base of skills and knowledge than any previous generation.  It is true that many of them will not have gained this by traditional education (after all, around 66% of men who start university never finish with a degree.) They will have learned most of it by themselves through the Internet, from television, from travel and social media.  They are experimenting, being entrepreneurial, and exploring more than most other generations.

Corporations are not their natural home nor is corporate life their natural lifestyle.  They are more likely to pursue self-employment or work for a small firm where the atmosphere is collaborative and there is open communication. A few larger firms such as Google and Zappos are willing to hire people with no degrees, but with passion, interest, and life experience. They invest in mentor-based training. They put them into situations where they are forced to learn rapidly. They have large portions of the workforce who have chosen to work as temporary staff or on a contract.

Talent Shortage or not?

Absolutely not!  We have an abundance of talent – wonderful, creative and entrepreneurial folks who are already using their skills to create a new world.

We need to stop thinking about yesterday’s work world and imagine tomorrow’s. We will not need thousands and thousands of engineers, scientists, and technicians.

Most of these young people will do amazing things – invent more companies like Facebook, Google, Amazon, and Zappos. They will work often in partnership with a robot or a piece of automated software. Our economy has already moved in this way with more of GDP coming from services than from manufacturing.

Encouraging thousands of young people to pursue a STEM degree when their hearts are leading them elsewhere is a tragedy.




Kevin Wheeler


Kevin Wheeler Founder and Chairman the Future of Talent Institute. Kevin started FOTI in 2004 out of his passionate belief that organizations need a more powerful and thoughtful architecture for talent than they have. After a 25 year career in corporate America serving as the Senior Vice President for Staffing and Workforce Development at the Charles Schwab Corporation, the Vice President of Human Resources for Alphatec Electronics, Inc. in Thailand, and in a variety of human resources roles at National Semiconductor Corporation, Kevin has firsthand knowledge of the need for better strategies and approaches to finding, developing and retaining people.

Today, Kevin is a globally known speaker, author, teacher and consultant in human capital acquisition and development, as well as in corporate education. He is the author of numerous articles on human resource development, career development, recruiting, and on establishing corporate universities. He is a frequent speaker at conferences. He writes a weekly Internet column on recruiting and staffing, which can be found at www.ere.net, and he and Eileen have written a book on corporate universities, The Corporate University Workbook: Launching the 21st Century Learning Organization. He serves as adjunct faculty at San Jose State University, the University of San Francisco and on the business faculty at San Francisco State University.

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  1. I have long said there is no shortage of nurses, only a shortage of companies willing to train and pay people enough to want to be nurses. That said, I don't think anyone can deny that we have a crisis of huge proportions looming. In fewer than 10 years, are most experienced healthcare providers will retire and become patients while the rest of the population retiring will have access to more healthcare than they ever have, as the largest aging population in our country's history… we can't train enough or pay enough to have enough people to care for those aging , in time. It is simple math. We should all be very afraid. Our exchange system will earn you access to get in line for basic healthcare at an affordable rate, while the wealthiest will buy their way to the front of the line. There is a talent shortage but it's not the one we've been talking about. It's much more serious.

  2. Amen, Sister.

  3. I will whole-heartedly join the call for more and better liberal arts education, especially critical analysis skills. I would add that I think describing our principal workforce problem as a global talent shortage has always been a bit dimwitted. I would compare it to saying we have a global water shortage. We have a fixed supply of water — always have, always will. Too little or too much doesn't come into it. What we have are failures of preparation, distribution, and conservation. No point in wishing for more water in the world… or for more talented people. (I agree with Kevin that we have, if anything, an over-abundance of under-utilized talent, far too often wasted.) If we want a more productive society both inside and out of commerce, we need to improve our preparation, distribution, and conservation of people — the supply of talent that we have.


  1. Talent Shortage? What Talent Shortage? | ATC Events - […] blog first appeared on the Future of Talent […]

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