Gale-force demographic trends and what they mean for employers

Dr. James H. Johnson Jr.

James H. Johnson Jr., PhD

A Q&A with Dr. James H. Johnson Jr., distinguished professor of strategy and entrepreneurship at the Kenan-Flagler Business School and director of the Urban Investment Strategies Center at the Frank Hawkins Kenan Institute of Private Enterprise at the University of North Carolina, Chapel Hill. He is also the author of Business Alert! Gale Force Demographic Wind Gusts Ahead.

Over the last few years, Americans have left the workforce at a historic rate, an exodus some call “The Great Resignation.” At the same time, powerful demographic trends are intensifying, reshaping the makeup of today’s workforce and creating challenges for talent recruitment, development and retention. Workplace Insights™ sat down with Dr. James Johnson to explore these “gale-force” trends and what they could mean for employers.

Workplace Insights™ (WI): What are the “demographic wind gusts” impacting the workplace?

Dr. James Johnson (JJ): To summarize the demographic trends affecting the workplace, consumer markets and our society overall, I think it is helpful to group them into three focus areas: Moving and grooving, browning and graying, and rebelling and disappearing. I’ll explain what these mean:

  • Moving and grooving. We are seeing a profound redistribution of the population with about half of today’s workforce concentrated in the South. This movement is further fueled by the surge in people working remotely, including those who may have even moved beyond commuting distance from the office. “Work” is no longer a place where you go—it’s what you do.
  • Browning and graying. The U.S. white population has declined by 5.1 million between 2010 and 2020, and the growing percentage of people of color is transforming the composition of the workforce. Meanwhile, our population is also aging, with about 10,000 people turning 65 every day. And who is replacing the retiring Boomers in the workforce? A far more diverse new generation of younger workers.

    Younger employee populations tend to be more ethnically diverse

    Ethnic makeup of employees who participated in the 2021 Workplace Benefits Report survey

    The chart shows the ethnic makeup of Gen Z and Millennials, ages 18 through 44, as 65% White/Caucasian; 13% Asian; 10% Hispanic or Latino; 9% Black/African American and 2% multi-racial. This chart shows the ethnic makeup of Gen Xers, ages 45 through 54, as 72% White/Caucasian; 10% Asian; 10% Black/African American; 6% Hispanic or Latino and 1% multi-racial. The chart shows the ethnic makeup of Baby Boomers and Silent Generation, ages 55 and over, as 83% White/Caucasian; 7% Asian; 4% Black/African American; 4% Hispanic or Latino and 1% multi-racial.
  • Rebelling and disappearing. In addition to people choosing to drop out of the workforce during the “great resignation,” we are losing workers in their prime at incredible rates due to “deaths of despair,” including suicide, drug overdose and diseases related to alcohol abuse. In addition, women’s participation in the workforce has suffered as they continue to be faced with the hard decision to leave their jobs to take on caregiving responsibilities. The pipeline for new talent is also drying up, with an estimated 300,000 fewer births in the U.S. in 2021 and a decline in immigration that would otherwise bolster the pool of workers.

The trends we are seeing now—both individually and collectively—will affect the future of work. Business leaders need to recognize and understand these trends so they can be proactive in developing strategies to address them.

WI: What are some things employers can do to address these trends and turn them to their advantage?

JJ: With the U.S. labor shortage, regional concentration of workers and persistent preference to work remotely, employers will likely need to adopt a global strategy, reaching out to where workers are, which may not be local or in‑person. This also means employers will need to consider virtual protocols and flexible work arrangements to accommodate employees working from different locations. Businesses can stand to benefit from this strategy with the potential for increased productivity and speed to market—when the sun goes down here, employees elsewhere can still be active.

Filling open positions could also mean looking beyond traditional sources to recruit talent. Recruiting workers with diverse backgrounds—whether foreign-born or neurodiverse individuals with different ways of thinking, learning, processing and behaving—can help build and strengthen teams. A diverse workforce can generate greater reputational equity for your company. It can also provide cultural elasticity to move from one business environment to the next without missing a beat. Both can translate into competitive advantages in the global marketplace.

Women, who are expected to represent about 60% of the population within the next two decades, will also figure prominently in hiring and retention strategies. We are losing a whole generation of male workers, with about a million men giving up on college and “deaths by despair” affecting a disproportionate number of young men. A smart business strategy will be to offer women on- and off- ramps for employment that can help them balance career and caregiving, while helping provide your company with a source of talent over the long term.

WI: How will these trends affect workplace benefits and programs?

JJ: Younger employees entering the workforce will have different values and perspectives than their older counterparts. Employees may represent different types of households; for example, same‑sex couples. And cultural differences can mean nuances in communication styles across the company. All of these factors, and others like them, will require companies to take a look at their employee benefits and workplace programs to make sure they are broad and inclusive to meet diverse needs. Consider providing cross‑cultural training or establishing sponsor or mentor programs to help all employees thrive and prosper.

Another focus area will be caregiving policies. Whether providing access to quality, reliable and culturally appropriate childcare, or offering more flexible work arrangements, evolving policies will be especially important in attracting and retaining women and women of color, who represent one of the greatest opportunities to bring in talent. In addition, mental wellness continues to be a critical concern, and programs to support employees’ mental health will continue to be a big focus moving forward.

WI: What else can employers expect?

JJ: The geo-political climate is going to be the big disrupter going forward. The only certainty is uncertainty and we have to equip people to work with ambiguity. The key takeaway is that it’s an evolving situation and we must remain agile.