There is a war for talent coming, and it is going to affect most of American business. It is driven by changing demographics and the baby boomer generation race towards retirement. It is driven by college and post graduate graduation rates that can’t keep up with the need for educated talent. It is driven by a lack of people with the willingness to work in a manufacturing environment for wages that are now paid in that environment. Here are some of the facts:

• By 2012, the US Bureau of Labor Statistics says that nearly 50% of the workforce will become eligible for retirement. We do not have workers with enough training or skills to replace experienced retiring workers. The shortage of available skilled workers is likely to exceed 10 million by 2010.
• One-fifth of this country’s large established companies will be losing 40% or more of their top-level talent in the next five years. The replacement pool of 35-44 year-olds will decline by 15% during the same period.
• Within the next 10 years, 18 million jobs will require individuals with baccalaureate degrees. At current graduation levels, the Employment Policy Foundation predicts a shortfall of 6 million.
• In 1973, blue collar workers represented over 60% of the workforce. Very shortly, just 10% of the workforce will be blue collar. The Hudson Institute estimates that by 2006, only 20% of our workers will have the skills to do 60% of the jobs.

As the shortages heat up, so will the competition for talent. Job hopping will increase as the economy loses the active workers. According to a new Society of Human Resources Management (SHRM) survey 75% of American employees and 82% of American executives are looking for a new job. Here are a few more stats you need to pay attention to:

• Despite economic uncertainty, nearly 7 out of 10 U.S. workers say job change will be at their own initiative.
• 39% of the workforce has worked for six or more companies – up from 27% in 1999.
• 45% of workers want to change jobs at least every three to five years - up from 26% in 1999.

So why is this important to you? Only 15% of the executives surveyed by McKinsey & Co. said improving the talent pool was a top priority, even though 75% of those same executives said that “a chronic shortage of talent” was one of the constraints on their companies’ growth.

Many studies have shown that low-performing companies have nearly twice as much turnover among top-performing employees as high-performing companies. To put that fact into context, consider that 3 out of every 4 Fortune 5000 companies in 1970 are no longer on the list. 1 out of 3 firms who went public since 1988 are out of business.

What are you doing to win the talent war? What are you doing to change your outcomes? What do you need to change in the way that you recruit, hire, train and develop your employees? How can you maintain a high performing work force? Keep watching this newsletter for more ideas!