Week 1 Unit 3b: HR in a World

of Chronic Skills Shortage

HR in a World of Chronic Skills Shortage

Why do companies need to change how they manage people?
Right People
Staffing, promotions,
workforce planning

Right Way
Performance management,
coaching, merit pay

Right Things
Goal management, variable
compensation

Who you are

How you act

Attributes
(skills, aptitudes, interests)

Competencies (behaviors)

What you achieve

Goals
(outcomes &
accomplishments)

Right Development
Learning, career planning,
leadership development

2015 SAP SE or an SAP affiliate company. All rights reserved.

Create learning opportunities

Public

HR in a World of Chronic Skills Shortage

Workforce is increasingly segmented into skilled vs. unskilled labor markets
Technology eliminates semi-skilled routine jobs and
creates two distinct labor markets: skilled vs. unskilled

There is a growing shortage of skilled employees,

particularly experienced ones

Meister & Willyerd (2010). The 2020 Workplace

2015 SAP SE or an SAP affiliate company. All rights reserved.

Public

HR in a World of Chronic Skills Shortage

Skills demand and supply
Fewer people born in the 70s and
80s
Training/education has not kept
pace with skills demand
Technology creates bigger skilled
vs. unskilled work gap

Demand
For Skills

Skilled
Labor Supply

Technology creates more

complex skilled jobs
Economic growth creates need
for skilled jobs
Globalization creates more
opportunities for skilled people

2015 SAP SE or an SAP affiliate company. All rights reserved.

Public

HR in a World of Chronic Skills Shortage

Do these findings generalize to the rest of the world?

Source: McKinsey Global Institute analysis

2015 SAP SE or an SAP affiliate company. All rights reserved.

Public

HR in a World of Chronic Skills Shortage

Are millennials different or just younger?
How the year you were born affects work
Job interests change based on career stages
What you are willing and able to do often changes as you get older
Past experiences influence future expectations

What doesnt change based on date of birth

What we fundamentally want from work

Fair treatment, rewarding work, employment security, work-life balance

How we expect to be treated

Tell me what you need me to do and explain why it matters

Give me the resources required to do it

Recognize and reward me based on my contributions

2015 SAP SE or an SAP affiliate company. All rights reserved.

Public

HR in a World of Chronic Skills Shortage

Voluntary quits

What we want from jobs may not change,

but tolerance for jobs that dont give us
what we want does.
People are more likely to quit when they
know there are more jobs available.

US Bureau of Labor Statistics

% of voluntary quits

2015 SAP SE or an SAP affiliate company. All rights reserved.

Public

HR in a World of Chronic Skills Shortage

Employers require skilled employees at all ages

30

Companies must aggressively hire,

develop, and engage skilled employees at
all ages to meet talent needs.
Companies can no longer tolerate loss of
employees due to bad management
practices.

2020 projected age % of US labor force

25

20

15

10

55+

2015 SAP SE or an SAP affiliate company. All rights reserved.

44-54

35-44

25-34

< 25

Public

Thank you

Contact information:
open@sap.com

 2015 SAP SE or an SAP affiliate company. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company.
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate
company) in Germany and other countries. Please see http://global12.sap.com/corporate-en/legal/copyright/index.epx for additional trademark information and notices.
Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors.
National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its
affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and
services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as
constituting an additional warranty.
In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop
or release any functionality mentioned therein. This document, or any related presentation, and SAP SEs or its affiliated companies strategy and possible future
developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time
for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forwardlooking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

2015 SAP SE or an SAP affiliate company. All rights reserved.

Public

10