Welcome to the January 11, 2006 issue of The Total View.

I recall six years ago when I first warned about skilled worker shortages. I received many comments like "interesting" and "thought-provoking but many executives and business owners chose to blow off the warning as a scare tactic. Today, stories about skilled worker shortages are front-page news and the time to fill open critical positions is growing longer and longer. The Perfect Labor Storm is no longer just a forecast for the future but an imminent threat for the present.

Below are a few stories I believe will dominate the news in 2006 and beyond.

A Shrinking Workforce - The number of U.S. workers between ages 55 and 64 will grow 51 percent to 25 million by 2012, meaning the fastest- growing portion of the work force is the one at most risk of retiring soon. At the same time, the number of workers between ages 35 and 44 is expected to shrink by 7 percent.

New Skills Required - While many workers continue to use skills learned in an Industrial age, consumer demands have changed. Jobs now require skills for service and knowledge, not manual labor. In 1955, 40.5 percent of the U.S. workforce was engaging in manufacturing, construction, and mining. By the end of 2005, those industries employed only 15.8 percent of the workforce. Service-producing industry sent paychecks to 41.8 percent of workers.

Is Education The Answer? - Many point to better education as the solution. But education has its own problems. Today's workforce is the most educated in the world. That is all about to change. U.S. high school students are getting their lunches eaten when it comes to math and science scores compared to the most advanced economies of Europe and Asia.

No Industry Left Behind - Nearly every industry is predicting severe employee shortages, including manufacturing. Despite over 2 million layoffs, 500,000 vacancies exist for manufacturing jobs. Why? The available worker, including the employed, doesn't have the right skills. The same forecast holds for healthcare, construction and technology.

Ticking time bombs: health care and pensions - For the first time in history retirees are living longer after retirements then they worked for the company or paid into social security. Many organizations including the government are facing huge funding shortfalls. The rules about retirement haven't kept up with life expectancy.

As a result, public pension and health benefits for the elderly are on track to double while at the same time the old-age dependency ratio (nonworking older person per workers) will double.

Living Longer Costs Money - The health care consumption level of a 70-year-old far exceeds the consumption level of a 30 year old. By one estimate, the average elderly American consumes 37 percent more than the average worker.

As a result, Americans will be expected to pay more for their own health care and more for their dependents through more out-of-pocket payments and increased tax bills required to fund public supported health care.

Consumer-Driven Health Care - Shifting responsibility for health care to the consumer may be the right thing to do but employers and the government are asking a lot when lay people are expected to shop for a provider, decide when to seek care, wait weeks or months to get an appointment, juggle the appointment time with the demands of working, and navigate a complex system of bills and payments.

At least 77 million people in the U.S. -- or two out of every five adults -- have a hard time paying for medical bills or have accrued debt as a result of health care expenses. Two-thirds of people, which includes many workers, with a medical bill or debt trouble go without care because of cost. Meanwhile their health deteriorates. Minor ailments become severe and chronic conditions evolve into acute emergencies.

More than Pocket Change - Losing experienced workers is only part of the problem. Replacing them comes with a high cost. At a time when the cost of doing business is rising and profits are squeezed, the average "cost-to-hire" and "time- to-fill" in 2005 was $7,123 and 37 days, respectively. The number goes up exponentially when recruiting and hiring knowledge workers. (Source: 2005 SHRM Human Capital Benchmarking Study)

This combination of an aging population and a shrinking workforce will increase the pressure to reduce pensions, delay retirement, increase outsourcing and open up immigration.

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Fact #482: Though there are more than 9 million males ages 17 to 21 in the U.S., only about one is there have the educational and other qualifications needed to become a member of the armed forces. And of those 3 million qualified males, about half already are in the military or in college.

Fact #483: Every year India graduates 2 million proficient English speakers with strong technical and quantitiative skills, China graduated 325,000 engineers in 2004, five times as many as the U.S. The number of researchers in China reached 811,000 in 2002, compared to Japan's 676,000, European Union's 1 million, and the United States' 1.3 million. (Source: A.T. Kearney)

Fact #484: The National Association of Chain Drug Stores reported about 5,950 full- and part-time openings in July 2005 in its 37,000 member stores. The American Hospital Association reported a 7.4 percent vacancy rate for pharmacists as of December, 2004, with 38 percent of its members saying it was harder to recruit pharmacists last year than in 2003. A consortium of pharmacy groups called the Pharmacy Manpower Project issued a report in 2002 predicting 157,000 unfilled pharmacy openings by 2020.

Fact #485: According to a 2005 Accenture Study, 58 percent of mid-level managers are mulling changing jobs. Thirty percent are currently looking for another job. Twenty-two percent want to change jobs to get promoted and 21 percent are searching for better working conditions. Forty-seven percent are most frustrated with compensation while 40 percent are looking to balance work and personal time. Thirty eight percent felt they had too much work and don't get enough credit. Thirty five percent wanted a career path, not available with their current employer.

Don't be caught in storm without all the facts. "The Perfect Labor Storm Fact Book: Why Worker Shortages Won't Go Away" is a must-read leading edge forecast that predicts workforce trends for decades to come.

According to the survey, 67 percent of workers have taken office supplies form work to use outside the office or for matters unrelated to the job. Virtually all-97 percent-of respondents said it would not matter if they were caught raiding the office pencil cups.

Most popular item to pilfer: pens. Post-It notes came in second. Other popular items lifted from the supply closet:

• Envelopes: 32 percent
• Notepads: 28 percent
• Paper: 27.5 percent
• Paper clips: 26 percent
• Highlighters: 24 percent

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