Today, the unemployed often suffer behind closed doors, alone. They have food and a roof over their heads but face a bleak future. It’s one reason that in the U.S. anyway, the suicide rate among men in their fifties, the group arguably most vulnerable to long-term unemployment, underemployment, or a significant drop in income after reemployment, was 50% higher in 1999-2010 than the previous decade.
Disconnected from Suffering
And there’s another difference from the old days. Companies used to suffer right along with their laid off workers because their businesses depended on the local economy.
Today, of course, global sources of revenue and labor mean that stock prices can soar for companies based in struggling economies with high unemployment.
An Insidious Problem for Companies: Skills
All of which gives companies a chance to ignore the deeper problems of a global economy. But companies can’t afford to do that. They have an insidious problem lurking under the surface of high stock prices: a shortage of employees with the right skills coupled with a less loyal workforce.
Product life cycles are too short and competition is too volatile to go back to the days of long-term employment and job security as a lure for top talent. The consequences for companies are that the best and brightest, or at least those with the hottest skills, leave and cost a lot to replace – if they can be found at all.
An Ecosystem Approach to Employment
Research that we’re doing here at SAP is showing that in order to thrive in the future, modern companies must develop new ways to engage workers in an ecosystem of employees, outsourcers and freelancers.
HR is Part of Strategy Now
That means that HR must come out of the backwater of benefits administration and become a major part of overall company strategy. Companies must take a more active role, empowering individuals to find education with a faster ROI in a more practical approach, in parallel with more formal academic education.
But for all this to work, a number of things need to change:
- Stop leaving hiring to chance. Companies hire the people they need when they need them rather than planning for the people they’ll need five years from now.
- End the functional approach to (and in) HR. CEOs must stop equating HR with payroll and benefits and HR departments must learn to speak the language of business.
- Maintain relationships with ex-employees. Companies must nurture formal alumni networks and actively use them for recruiting, or even for helping former employees continue their career development.
- Find the right balance of training. We’re seeing some compelling arguments that companies are underinvesting in training — employees are frequently left to their own devices, but can’t always afford to acquire new skills on their own.
- Formalize informal learning. Social media can form the foundation for an informal internal training system among peers and mentors. But companies have had mixed results from these efforts so far.
What else should companies be doing? Please help with our research by contributing your thoughts.