Sometime this fall, while dumping a truck load of corn and watching the grain flow into the auger, my mind settled into meditation on how doing business will change as the next five and even ten years are recorded into history. It was then that it occurred to me businesses have had several eras since the industrial revolution, when in some fashion or another they’ve had to do more with less. In times of war, for example, they’ve had to do more with less steel and lumber. Through times of depression and recession they’ve had to do more with less cash flow. Fuel rationing in the 1970’s required doing more with less petroleum products. When interest rates went on an extended upward run in the early 80’s borrowed capital become unaffordable so businesses learned to do more with what they had. It was my realization that the business leaders of next ten years will have to learn to do more with fewer people.
Articles concerning the retirement of the Boomers and the up-and-coming Xer’s are quick to point out that there will be a measurable shortage in the workforce. Many calculations predict a shortfall of 26 million employees. Even with delayed retirements and advances in technology, it is a mathematical certainty that fielding a full work force, especially a skilled work force will be a huge challenge. So how does a company prepare for this? In my opinion this is just like any other corporate strategy and must be multi-faceted approach.
To be a competitive business in this new era of employee deficit, the first element is to simply become a company people want to work for. A business will have to be an employer of choice if they expect to have any response at all to their hiring request. Companies will have to recognize that prime employees will be in high demand. While this may be a simplistic concept, it is not so easy in practice. It will be important to indoctrinate corporate culture and a sense of ownership in the new hires, because fear of unemployment will no longer hold them. Many companies have always left this to take care of itself, as if the corporate culture is absorbed into new hires by osmosis, and if they don’t get it they’ll leave and be replaced. Increasing difficulty replacing employees will make it so important to actively build a sense of ownership in the company to increase the likelihood that they’ll stay around. Companies will have to address the diverse retention drivers of a multi-generational workforce and replace obsolete business models with more flexible and inclusive designs. What kept the retiring workforce around for twenty years will not keep younger new hires around for long. If a company is not able to recognize and cater to the generational differences in their workforce they will be at an increased risk of having employees hired away. It is interesting to note that in studies ranking the reasons why employees leave jobs, money consistently does NOT make the top five. The lesson is, if the non-monetary retention drivers are not met, then why not take an offer for more money and give another employer the chance to meet them? The goal of any company will have to be the creation of a creative and flexible model that is optimally desirable to all generations.
The second element is technology. This element is so obvious that it is often poorly done. Traditional thought dating back to the earliest Science Fiction movies is that technology will replace humans. A belief that is very easily enforced as one can actually see a machine do the work of a dozen laborers. However, that machine more than likely created more jobs than it displaced: engineers, manufacturers, parts manufacturers, service technicians retail distributors, and sales staff are all necessary to put the machine into action. So what was the net effect? I like to think of it as the machine took the monotonous work and replaced it with more meaningful work. It is the same way in an office environment. There is no need to pay someone to sit and fold letters, stuff and seal envelopes by the hundreds, there are machines for that. That person may now contribute to the company in a way that is a bit more interesting and meaningful to them. Any company that keeps an IT department in-house or contracts that service can testify that technology brings its own demands on human resources. My theory is that technology, be it in the form of a machine or software does not really reduce the personnel requirement for a company. However, if used to its fullest can remove meaningless repetitions and monotonous tasks, giving employers the opportunity to add meaning to the daily tasks of its workforce. Having meaning in daily work is key to employee retention. Also, employees that feel there is meaning and purpose in their work are more productive. The net effect of technology? Long term employees with above average productivity. Technology may not reduce a company’s need for employees, but it can make them more productive; and being more productive is doing more with what you’ve got.
The third element for doing more with less people is operational efficiencies. This may be thought of hand-in-hand with technology, but not necessarily. Technology can execute a particular task very quickly, but a fast system is not by default an efficient system. Technology can not identify whether or not a task is necessary, nor can it determine if the task is completed in the most effective way. Only management can do this. If technology performs a task one hundred times in a minute when it used to take someone an hour, the reaction is “Wow, now that is efficient”; however, if the task has no relative bearing on the operations of the company, is the company anymore efficient? Every day companies perform tasks that are not necessary, just habit. How does a company gather such a plethora of unnecessary tasks? The same way most people have an attic, garage, shed, or spare room that is so cluttered it is hardly passable: Time. Time has a way of collecting things. Over time, tasks like items in a spare room, are collected and if their importance is not really understood they are kept instead of thrown out. Very subtly a collection of winter coats, unused decorations, college mementos, a wedding gift, and useless tasks have gathered without notice. The evolution and growth of a company almost demands this. Any company is started by doing what they do best, their core competency. As they prosper, market demand eventually asks for an expansion of their products or services beyond what founded the company. Every time a company expands, there is risk. It could be a new loan, investment of cash, investment of capital, or strain on resources, but there is new risk to the company every time it expands beyond its core. To manage these risks, management surrounds the new service/product offering with tasks. Eventually the company still has its core offering, but also has expanded to a full line of products and services, each wrapped in a list of tasks designed to protect the company in the event the uncertainty of a new offering would prove problematic. Good employees perform these tasks faithfully every day without asking, “Is this still necessary?” Tasks are performed because “That’s the way it’s always been.” Once a certain comfort level is reached, very few managers remember to go back to reevaluate the process and remove those steps that were in place during the experimental phase. A change in operational systems can also leave pointless tasks behind. It is not uncommon to identify a task that was put in place to support a system that no longer exists. In the face of an employee shortage, astute companies will need to identify and eliminate unnecessary steps to do more with the personnel they have. Doing things because it is comfortable and time-tested is no longer going to make it. Each step in a process needs to be questioned, and if it does not have a measurable impact on the end product or the stability of the company, cut it out.
Doing more with less has always been a challenge to business leaders. Lack of employees is a new one that has many in a quiet panic. However, keep in mind that every business is in the same situation. Those who strive to be the employer of choice, use technology to replace the mundane with meaning, and clean the clutter out of their operations, will be far ahead of those simply raising wages and establishing a standing “help wanted” ad in the local paper.