Located about 50 miles southeast of Los Angeles, the area is quiet, wealthy and automobile-dependent—some of the lots have four cars visible on the property. The residents will tell you that they came here to enjoy a sense of “peace” and the wide-open “space.”
From these few clues, one could make a very safe bet as to which party the vast majority of Corona View residents are going to vote for in the next election.
In a Pew poll released in June, about three-quarters of “consistent conservatives” reported that they preferred to live in a community where “the houses are larger and farther apart,” even if “schools, stores and restaurants are several miles away.” This is in sharp contrast to 77% of “consistent liberals,” who say they want to live where “the houses are smaller and closer to each other” and “schools, stores and restaurants are within walking distance.”
This is in part a political phenomenon. But it is also a demographic trend—one of several that those in the executive suite can’t afford to miss, whether at a corporation, nonprofit or government agency.
But miss them you might. Of all the external changes that a manager must consider, “demographics—defined as changes in population, its size, age structure, composition, employment, educational status and income—are the clearest,” Peter Drucker wrote. “They are unambiguous. They have the most predictable consequences.” Despite this, however, many executives fail to act on them, often out of a mistaken belief that “they occur so slowly and over such long time spans as to be of little concern.”
The flip side is that because so many organizational leaders ignore demographics, “those who watch them and exploit them can reap great rewards.” Here, then, is a look at three such opportunities:
RED AMERICA, BLUE AMERICA
The kind of clustering that is happening in Corona View—and in communities across America—was identified in the 2008 book The Big Sort by journalist Bill Bishop. But it’s something that has been unfolding for decades, and with greater and greater intensity.
In 1976, about 27% of Americans lived in “landslide counties”—that is, counties in which the winning candidate in a presidential election won by 20 percentage points or more. By 2008, nearly half of Americans lived in such counties.
Simply put, reds and blues are separating along political and ideological lines, but the separation is spilling over to all sorts of other things, like preferences for certain types of housing. “As politics becomes more about lifestyle than about policy, where you live becomes a question of ‘who I am,’” Bishop explains. “People ask, ‘Does this place represent me?’” Red-leaners in blue areas want to move out and join fellow reds; blue-leaners in red areas want to move out and join fellow blues.
And there’s little reason to expect this trend to reverse anytime soon, at least not as long as Americans can vote with their feet. “Instead of voting for what you want, just move to what you want,” Bishop says. “Why sit around and beat your head against the wall?” For businesses, in particular, this sets up an interesting strategic choice: Do you concentrate on going after only reds or only blues, or do you try to cater to each group in different ways in different places?
Instead of voting for what you want just move to what you want. Why sit around and beat your head against the wall?
Author, The Big Sort
Cracker Barrel Old Country Store, which has more than 600 locations, seems to have chosen the monochromatic approach: It is widely seen as catering to red-leaning customers with its down-home cooking. Yet it succeeds in Massachusetts, a decidedly blue state, by placing three of its four stores in red municipalities: Sturbridge, Wrentham and Tewksbury. (The fourth, in blue-leaning Holyoke, is near a junction of major highways, just a few miles from the borders of several red-leaning towns to the west and south.)
THE SHEEPSKIN SHORTAGE
Complaints have been mounting among U.S. employers that qualified workers are hard to come by, even as the national unemployment rate continues to hover above 6%. Others question whether this “skills gap” or “skills mismatch” is for real.
In coming years, however, there really shouldn’t be any debate: By 2020, America will have a shortage of college-educated workers.
“Demand for workers with college educations will outpace supply to the tune of 300,000 per year,” Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, and his co-authors caution in a report called “Help Wanted: Projections of Job and Education Requirements Through 2018.” Within the next four years, “the postsecondary system will have produced 3 million fewer college graduates than demanded by the labor market.”
Demand for workers with college educations will outpace supply to the tune of 300,000 per year.
Director, Georgetown University Center on Education and the Workforce
Part of this deficiency is being driven by increased demand. By 2018, Carnevale says, 63% of all U.S. jobs will require some level of postsecondary education, an increase from 59% in 2010—no surprise as we move deeper and deeper into an age in which, as Drucker wrote, “knowledge will be its key resource, and knowledge workers will be the dominant group in its workforce.”
Another part of the shortage is being driven by a decrease in supply, thanks to two factors. The first is that many college-educated Americans are reaching retirement age. “Workers over age 45 are key members of nearly every organization—performing both as senior and middle level managers as well as skilled ‘individual contributor’ positions,” notes a report produced by IBM Business Consulting Services. “As this generation retires, organizations will face major challenges in replacing them.” The drop-off, notes University of Southern California demographer Dowell Myers, will be especially severe in sectors that ramped up during the 1960s and ’70s, such as energy and government, with electrical utilities seeing an exodus of thousands of their most important employees.
The second factor is that younger Americans are not attaining college educations in sufficiently high numbers to make up for the workers being lost or to meet the jobs opening up. This is especially true in the southwest United States, where first-generation immigrants on average lack the educational background of older retiring workers.
Economists David Neumark, Hans Johnson and Marisol Cuellar Mejia have cited California, Texas, Florida, Arizona, Colorado, New Mexico and Nevada as the most pressing examples. But the decline is also being felt in less expected places.
“New England states will find a decreasing percentage of their young population will hold a bachelor’s or higher-level degree in years to come,” asserts a 2006 workforce report commissioned by the Quincy, Mass.-based Nellie Mae Education Foundation.
In short, the sheepskin shortage is likely to affect most every organization, no matter what sector it operates in. The question is what to do.
Don Atwater, an economist at Pepperdine University’s Graziadio School of Business and Management, has written extensively about dealing with talent shortages, and he spotlights a number of inventive remedies that organizations have used. One is to recruit more aggressively from overseas. Another is to bypass the process of individual hiring and absorb smaller well-run entities completely—employees and all. Cities can’t do this, of course, but they can woo proven workers from elsewhere. As Deborah Reed, a vice president of Mathematica Policy Research, puts it, “The question becomes, ‘How do we get talent from that neighbor city?’”
Finally, smart organizations hold onto the good people they have. “They typically pay more, have rotating assignments and change the nature of the jobs,” Atwater says. In other words, faced with a demographic squeeze, their executives do what all leaders should always be doing: treating people as their greatest asset. *
What will you do on Monday that’s different?
PUSH YOUR THINKING
Invite a demographer to come to your next executive offsite or strategy meeting.
REGULARLY ASK YOURSELF AND YOUR SENIOR TEAM
What is one demographic trend that’s currently helping us that we can further exploit, one that’s hurting us and one that we’re unsure about?