March 30, 2007


Where Are All The Workers?: Companies worldwide are suddenly scrambling to manage a labor crunch (Business week, 3/30/07)

Employers in some unlikely places say they're having trouble filling jobs. Factory managers in Ho Chi Minh City report many of their $62-a-month workers went home for the Tet holiday in February and never came back. In Bulgaria, computer experts are in such demand they can't be bothered to answer the want ads of a Los Angeles movie studio. And in Peoria, Caterpillar Inc. (CAT ) is struggling to train enough service technicians. The problem in each case: not enough people who are both able and willing to do the work for the posted pay. "We've got a global problem...and it's only going to continue to get worse," says Stephen Hitch, a human resources manager at Caterpillar.

A global labor crunch, already being felt by some employers, appears to have intensified in recent months. That's in spite of widely publicized layoffs, including Citigroup's (C ) plans to shed as many as 15,000 staffers. In fact, U.S. unemployment remains low--just 4.5% in February--and even companies in countries with higher jobless rates are feeling pinched. "It's not just a U.S. phenomenon," says Jeffrey A. Joerres, CEO of Manpower Inc., the staffing agency. On Mar. 29, Manpower was to release the results of a survey of nearly 37,000 employers in 27 countries. The study found that 41% of them are having trouble hiring the people they need.

What's going on here? With global growth running at a strong 5% a year since 2004, the strategies that companies developed to hold down labor costs--including offshoring work to low-wage countries--are running out of gas far sooner than many expected. The seemingly inexhaustible pools of cheap labor from China, India, and elsewhere are drying up as demand outstrips the supply of people with the needed skills. "Companies were hoping they wouldn't have to worry about human resources at all," says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania's Wharton School. "Now they do."

We need them more than they need us.

Posted by Orrin Judd at March 30, 2007 6:32 AM
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