From the Stone Age to the Information Age, history has been characterized by human innovation, the use of raw materials that transformed us from cave dwellers to the life today. We are now entering a new age, the Human Age, says Jonas Prising, president of the Americas for the ManpowerGroup, the Milwaukee-based global provider of temporary workers. Prising is a recognized expert in labor market trends, diversity and workforce development. He recently spoke with CRW about the changing world and what it means to business. Worker skills are now a company’s most valuable asset, he says.

What is different about this recession that makes it the beginning of a new age?
Traditionally when we have gone into recessions, companies reacted to the drop in demand by reducing their workforce for a short period of time. A deep cycle was six months or something like that. So you lay people off but you stay in touch because the minute you saw something move, you hired them back. People never stayed laid off for long. That is very different in this recession. The average length of unemployment is at record highs.

In other recessions, workers absorbed one-third of the cost of the recession; companies absorbed two-thirds from a productivity perspective. In this recession, 90 percent of the cost was absorbed by the workforce.

The size of the workforce, from peak to trough, dropped six percent in this recession. That’s massive. Massive. What that means is that a lot of companies have navigated through this without losing productivity. Business took off more people than needed and they haven’t brought them back in any significant way.

Now we are hearing that companies, particularly manufacturers, want to hire but can’t find workers with the skills they need.

It’s amazing with unemployment at nine percent. The reality is that this is an increasingly bifurcated world, divided globally between people who have the right skills and those who do not. Technology has changed how companies do things. You have to have more skills to be productive in today’s workforce. Well paid, low skill labor is not really a part of the manufacturing workforce today. Workers have to have skills. They have to know how to run a computer. They have to know how to program a production machine.

Demographics are playing a role. Many of the people with the skills that are in short supply are aging and retiring. The pipeline for bringing in new workers has diminished. The number of engineering graduates, the number of people coming out of vocational schools, apprenticeship programs or the training that unions used to provide, is not meeting the need today.

As we look at unemployment and at the labor market, we are seeing this recovery being very different from any other since the Second World War. Even though the recession was very deep, companies maintained and rebounded in terms of profitability very quickly. GDP is now at the same level or higher than it was in 2007. The big difference is that you have nine percent unemployment. What that means is that companies have found new ways of doing work without using as many people. That’s why we call it the Human Age. Talent is going to require people with skills and ingenuity and innovation.

How should companies adapt to get the people with the skills that they need?

Over time you are going have to think about what the core skills are that you can’t do without and what skills you can teach. In one way or another, companies will become much more involved in developing and growing their talent. Whether that is by organizing training or working much closer with educational institutions they need to guarantee a pipeline is there. That is something I am seeing happening increasingly. Companies that are experiencing the pain are very much aware of what is available in the market, what they need and where they can find it. If I can’t find them at all and I need to manufacture them, how do I go about this? They know which schools have the best graduates, how long it takes, how much it costs. I have seen companies go in and start their own training programs. I need people who have these exact sets of skills, but the rest of what I need I will teach them, and I will pay them while I do it. I will get them a skill set and as long as they stay with me for a period of time, I'm happy because I have what I need to execute my business plan.

By Marie Rohde

Corporate Report Wisconsin editor