The Background
In preparation for the presentation, Brian performed a bit of research at the US Dept of Labor Statistic website and came up with some fascinating information.
Three points REALLY stood out to me were:
- while I know there was a cliff coming at some point ... I was surprised as to the extent of the edifice.
- it is true that the workforce is not only getting older (all us aging baby boomers) ... but what I didn't realize was that the age where people stop working is increasing as well
- there is a big increase in men working past 65 ... but ... a HUGE increase in women working past that age. The chart below depicts that information clearly.
While an increasing percentage of the workforce delaying their retirement, it is interesting to note that an ever increasing percentage are working full time ... that trend started in 1995 ... at that point those ratio of full time to
part time workers began to increase; the ratio was equal in 2000 and now there
are 1.2 full time workers over 65 for every part time worker.
I suspect there
are three factors at play here:
- there are those who need the income because social security isn't sufficient ... and given that this trend started in 1995, it was WELL before any serious social security solvency discussions were taking place
- these individuals have valuable skills and experience ... as such ... they are very real contributors; a corollary to that may be that there are a void of people to fill some of the positions
- they genuinely enjoy what they do and don't want to give it up.
The "cliff" I expected is in evidence in the chart below. The surprise here was the statistic that by 2016 40% of the workforce will disappear and there will be 20% available to replace it.
Interestingly, I read an article yesterday (http://ow.ly/6DeX8) that talked about "35 million Generation Y workers replace the 70 million Baby Boomers retiring from the workforce" ... numbers instead of percentages, but the same ratio none-the-less.
Warehouse implications
As I reflect, the obvious question I ask myself is "Does that mean we will have an insufficient number of workers available?" ... and ... while in these times of high unemployment it seems like odd to answer "yes", that will the case. I believe that given some of the economic conditions we have experienced over the past few years, the % of full-time workers, over 65 will sky-rocket. That being said, it will just delay the inevitable, there will be an labor shortfall.
My bias will be to recommend automation, wherever feasible for a number of reasons:
- should some the percentage of the "aged" workforce that "end up" in the warehouse, those individuals will be most productive in highly automated, ergonomic environments
- the knowledge base of the "aged" workforce can be leveraged to assure that existing processes are systemized while they are still in place. The systemization will net "cleaner" processes ... streamlined processes will be much easier to operate as a new less experienced workforce becomes a greater percentage of the norm.
- lastly, and most obvious, automation in your warehouse will leverage your existing workforce ... allowing you to do more with what you already have.
Conclusion
Simply stated, the productivity gains realized through the use of automation will not only help our national economy (those productivity numbers you always read about are fundamental to economic health), but they also will allow you to leverage one of your greatest assets ... your people.
For more information on distribution center automation, feel free to visit http://www.tgw-group.com/.
One Additional Thought (a ps of sorts)
If we step back take a macro view regarding the trend towards e-commerce, that cast an even bigger shadow on the employment picture. There is a large productivity gap when we compare sending pallets and cases to a retail store vs. individual items directly to a consumer. This productivity will demand a large incremental increase in distribution center / warehouse job force ... just at the time when that available labor force is shrinking.
Tom, great blog! If I may add a few more items of note. It should be noted that while the aging workforce continues to work, their insurance rates are much higher and accidents, while they are usually fewer at this age, cost the employer a lot more. Also, for years we've been telling the next generation if they want to succeed, they have to get as much education as possible, the more the better. We are becoming a technology-based society and our younger generation is following this path, albeit mostly through video gaming technology. :-) Meanwhile, our country has been going through a recession and the only jobs that are available are the value-added jobs of the blue collar worker; labor intensive jobs (e.g., picking, welding, etc.). The new generation is overqualified for these jobs as major corporations make critical decisions NOT to hire these youngsters for fear that with their education they'll up and leave as soon as something good comes along. What does this mean actually? That as end users turn to automation to help cut costs out of their operation, they in turn are actually creating jobs for our kids. Automation requires a different level of aptitude and skillset to run it and maintain it, one of a technological type. And guess what we just established a few sentences ago? That's right. As we deploy automation, suddenly this next generation with it's technology-based aptitude and skillset become very valuable and we should see a decrease in general in unemployment. Totally opposite of the mindset most people have when they think of automation. Just a thought . . .
ReplyDeleteBrian - great comments - thoughts well taken.
ReplyDeleteIt is easy to take a safe view ... a little more risk ... a lot more reward when we take the longer view and look for the GREATER overall good.