Savvy employers know prevention costs less and are planning accordingly.
- By Jerry Laws
- Apr 01, 2005
THE skilled labor shortage that will strike American industry in three to
five years is much like a tsunami, says George Carpenter, president and CEO of
WorkWell Systems Inc. of Aliso Viejo, Calif.: Smart companies see it coming and
are investing to maintain the healthy, long-term employees they require.
Short-term thinkers will be awash.
"Ten million skilled jobs will be unfilled in 2010," Carpenter told me in a
recent interview. "It's surprising how few companies are perfecting their source
of supply for labor five years from now--where if it was an oil crisis or any
other raw material shortage, they'd be all over the issue. But labor, which
usually represents 60 percent of most companies' cost of goods sold, very few of
them have really jumped on the issue."
Few employers realize chronic conditions are common among today's older
workers, Carpenter says. Among these are heart disease (51% of working Americans
ages 45-64 have it, according to a 2000 study by the National Academy on an
Aging Society), arthritis (53%), hypertension (59%), and hearing loss (62%).
Savvy employers must take these into account, he says, as they hire and as they
manage their workforces through the shortage, which already has hit some
industries--notably health care, transportation and logistics, and skilled
WorkWell Systems advocates several key programs, including on-site
occupational health and wellness, functional pre-employment testing, and
early-stage disease management. Functional testing could reduce many companies'
injury rates by more than half, he says. "I think there's great opportunity for
companies to do it. I think it's a market that's probably less than 10 percent
penetrated today. But if you could hire people who match the job and then keep
them for 50 percent longer or 100 percent longer than your competitors who just
hire willy-nilly, then you're in a much better position in 2010. You won't be in
the market hiring as many people, and the people you've got will be doing better
"One of the principles behind our business is that it costs less to prevent,"
he summarized. "There's a Six Sigma principle: 1, 10, 100. It costs about $1 to
prevent a problem in the design of a process, $10 to find a problem in the
process once it's in place, and $100 to fix the problem when the product is out
in the hands of a customer."
Do your CEO and CFO get it? Invite them to do the math. Their company's
survival may depend on it.
This editor's note appears in the April 2005 issue of Occupational Health
This article originally appeared in the April 2005 issue of Occupational Health & Safety.
Jerry Laws is Editor of Occupational Health & Safety magazine, which is owned by 1105 Media Inc.