On the Job Front: The Worst of The Worst May Be Over

John A. Challenger, chief executive officer of Challenger, Gray & Christmas, is one of the most quoted labor and employment experts in America. He’s become a regular fixture on CNN, CBS, and a host of other networks and is a featured speaker at WorldFuture 2009, the annual conference of the World Future Society.

The current recession, expected to be the worst economic crisis since the Great Depression, will surely put to rest those old concerns about looming labor shortages, right? Probably not, says Challenger. THE FUTURIST magazine asked him about the major labor trends playing out in the current recession and how immigration, globalization, outsourcing, and other trends affecting employment and the workplace will evolve over the next five, 10, and 20 years. 

THE FUTURIST: Since the beginning of 2008, more than 1.8 million job cuts have been announced in the United States. Economists are projecting that U.S. unemployment may top out at 10% by the middle of next year. At Challenger, Gray & Christmas, you not only look at official unemployment, but you also track job cut announcements; these provide an indication of where the job market is going in the short term. You’ve recently turned a little more optimistic. Why is that?

Challenger: It feels to us like the job market may have bottomed. The rate of layoffs in the last two months has dropped. That rate is still high, but it’s decreasing. We’re not in a roaring recovery, but [it’s] a faint signal that the worst of the worst is over. On the one hand, manufacturing jobs in the U.S. continue to vanish, but on the other, the layoff rate in the financial sector seems to have stabilized. We talk to human-resources people around the country on a casual, anecdotal basis; the people we’re speaking with are taking whatever measures they can to avoid making layoffs. They don’t want to be short-staffed in the event of a turnaround.

As I said, these are subtle indicators. The employment situation in the United States remains fragile, but there are hopeful signals.

THE FUTURIST: As unemployment continues to rise, do you find you’re being sought out more and more to give advice on how to find work?

Challenger: Absolutely. I run an outplacement company; we’re a hospital for the unemployed. We’re seeing a lot of traffic on our Web site and a lot of interest from people looking to improve their employability. 

THE FUTURIST: What’s your key piece of advice for job seekers?

Challenger: Get a fast start—that’s number one. The second is, be open to changing industries. There are whole industries, like health care, that need people in a variety of fields. Look outside your normal boundaries, but look within your job function; you’ll want to look for jobs that correspond to your core competency and that let you do what you do best. Also, be open to changing locations.

THE FUTURIST: What are the best locations in the U.S.?

Challenger: The most stable employment is actually in the Midwest plains area—Nebraska, Kansas, even South Dakota—that corridor.

THE FUTURIST: A lot of American workers fret about their jobs moving overseas to China and India. What’s the five- to 10-year future of U.S. jobs moving to those countries?

Challenger: The world continues to globalize, the U.S. will tap into those markets. In order to do that, companies will hire local. As they hire people in the places they want to do business, communities in China and India and elsewhere will become will become core centers of operation contributing to national economic growth. More people in these countries finding work will create a bigger market. China will continue to build factories and operations in order to put her large population to work. But the Chinese workforce is generally not as technologically educated as the Indian workforce, where you have a strong a mathematics and engineering center. Then, in the Philippines, you see an accounting and health-care center; in Korea, you see a manufacturing base. All these of countries will experience employment growth.

THE FUTURIST: Right, you’re the head of an international outsourcing firm; you help American companies find labor in other markets. Outplacement and outsourcing have become convenient punching bags for pundits of late. One of the things you’re very vocal about is that the common picture of outsourcing—of U.S. jobs flying overseas—is overly simplistic and thus inaccurate.

Challenger: Exactly. The global labor market is not a zero-sum game. There are a lot of reasons to hire in the U.S. as well. We have a highly skilled labor force, but what we also have is the most diverse population of any country. We’re uniquely suited to reach out to people all around the world on their own terms. U.S. companies need to be able to compete in these international markets if they are to expand in the United States. The strength of the U.S. economy lies in its ability to capture global growth, participate, and integrate into economies all around the planet.

Let me give you an example. IBM is one of the first big companies that transitioned out of the colonial expansion model into a more community-focused expansion model. This is to say, they sent their workers out to actually live amongst the population. They said, we have positions open overseas but the jobs will be in local wages. A lot of workers in the States thought that was a joke, but the younger people, and the people in their fifties and sixties, the workers who didn’t have to worry as much about paying down mortgage or private school, who were either just starting out or who were looking to do something other than traditional retirement, said How exciting. It may be a wave of the future, exciting and increasingly de rigueur. More people are beginning to recognize this. Larry Summers at Harvard was speaking to a bunch of alumni not long ago. He commented that, long ago, the final requirement to graduate was to swim a lap around the pool. In the future, it will be having spent a semester overseas.

THE FUTURIST: What does the workforce look like 10 to 20 years ahead?

Challenger: We’ll see people who carry their offices on their backs, a mobile workforce. The idea of the nine-to-five glass box will have eroded. People will be working from wherever they are connected, working especially from customer sites, but also from home and on the run. That will be the big change. The twenty-somethings now—the same group we talked about earlier who are willing to work for U.S. companies in other countries—will lead this change. The U.S. will have spread well beyond its borders, and the most successful U.S. companies will be the ones that succeed in integrating into communities. I hope we’ll see the same in reverse. This would mean more of the world population coming to the U.S., working, as an element of our economy, going to school. Our ability to attract these people is our key strength. In the years ahead, it will pay dividends, not just economically but in terms of more-effective foreign policy. I hope people from around the world will still want to come here and take part in the U.S. educational experience. But our educational institutions will also be global brands with campuses all over the world. We’ll also see much smaller and more local companies, but that’s already taking place.

THE FUTURIST: One industry that’s been shedding jobs at a horrendous pace is media. Ad pages in magazines are down 26% this year. What sort of jobs will exist in that field?

Challenger: I think we'll see a split in the types of news organizations that exist, and you're seeing the beginnings of it now. There are cities without major local newspapers. In the future, we'll have news sources that deliver information about a specialized particular field or regional interest, and we’ll have very global sources for news information.

THE FUTURIST: You have graciously offered to give the closing keynote presentation at our conference in July on the topic of employment trends in a post-recession economy. One of the long-term trends you forecast is the development of labor shortages. What are the consequences of these labor shortages?

Challenger: For certain workers—physical therapists, doctors, technologists—these shortages will mean rising pay. Skilled workers will be in greater demand, and there will be a shift in balance between shareholders and stakeholders, as stakeholders reassert themselves. Another important lesson in this trend: Lifelong education is crucial. There will be plenty of opportunity, but those opportunities will go to the people with the right training. People need to think about their field and area of expertise and ask what kinds of technologies are relevant to that field.

THE FUTURIST: In the summer of 2005 you wrote an article for THE FUTURIST and laid out a number of possible future occupations. Offshore outsourcing coordinator, retirement consultant, corporate historian, and eco-relations manager were some of them. What do you think of those future career occupations now? 

Challenger: We’re still going to need multicultural coordinators in our workplaces to help people from different countries, religions, etc., work together, and we'll need sustainability managers as well.

THE FUTURIST: A number of World Future Society members are in government or are associated with planning and legislation. What sort of policies might help the U.S. labor force stay competitive?

Challenger: Immigration reform is number one. We need to remain an attractive destination for talented and skilled workers from around the world. Government can also find ways to support lifelong education. As new fields grow, education must become a permanent part of our careers.

About the Interviewee

John A. Challenger is the chief executive officer of Challenger, Gray & Christmas. He will be speaking at the WorldFuture 2009: Innovation and Creativity in a Complex World, the annual conference of the World Future Society. July 17-19, 2009 • Hilton Chicago • Chicago, Illinois Professional Members' Forum: July 20, 2009. Learn more and register online today.

This interview was conducted by Patrick Tucker, senior editor of THE FUTURIST magazine.