There will be plenty of jobs for almost anyone who is willing to get trained or retrained. Based on projections from the U.S. Department of Labor's Bureau of Labor Statistics, our economy will create a demand for 10 million more workers in 2010 than the labor force will be able to provide. Everyone who wants a job will have one, and the competition for the best performers will be intense.

As a whole, the U.S. economy will address the labor shortage problem through global sourcing of technical work, increased (but highly selective) immigration, and delayed retirement, which we'll explore in depth in Trend #8.

However, it's at the level of the firm where the labor shortage is likely to impact us most directly, in our roles as business professionals and managers. Learning from the skills shortage of the late '90s, the best firms are using the current economic slowdown as a time to prepare for a future in which employee attraction and retention will become a cherished core competency.

Let's examine the facts and some of the major implications:

Roger Herman is the author of Keeping Good People and Impending Crisis, which will be featured in the July 2003 issue of Audio-Tech Business Book Summaries. Roger and his colleagues at The Herman Group have probably identified more important trends in this area than anyone else. They have discovered that employee turnover is enormously costly to American business.

Financial analysts and investors are increasingly taking employee turnover into account when deciding everything from bond ratings to share prices. And, of course, the costs of recruiting, hiring, and training new employees erode the bottom line of many businesses. Finally, the cost to the company of the lost "intellectual capital" — the relationships, contacts, shortcuts, and knowledge that leaves when long-time employees do — is impossible to measure.

But employee turnover will only become more hazardous to the health of a company when the labor crunch hits at the end of this decade. With 10 million unfilled jobs, the best employees will have their pick of positions, and companies will compete to hire away even your average workers.

Herman and his team have identified a number of management practices that correlate with improved employee retention. Here are five practices that we believe will be widely adopted as...