Yes, Virginia, There is a Labor Shortage. Here’s Why.
As HR and hiring managers grapple with the continuing challenge of trying to fill open positions, there’s a question many of them are asking: “Is there really a labor shortage, or do people just not want to work?”
The answer won’t help them recruit more employees, but it might give them a slight bit of solace. There is indeed a labor shortage, and it won’t go away anytime soon. Here are four factors contributing to this difficult reality.
1) Declining birth rate. The math is pretty simple; fewer newborns mean fewer potential workers. That’s exactly what’s happened in the U.S., where the birth rate has fallen dramatically – including a 20% decline over the past 15 years – and shows no sign of recovering.
2) Baby Boomers bow out. We’ve known this was coming for a long time, and it’s finally arrived: the Baby Boom generation is hitting retirement age, and dropping out of the workforce in massive numbers. In fact, the rate of retirement among Baby Boomers escalated since the start of COVID-19, with almost 29 million boomers retiring in 2020 – an increase of more than 3 million from 2019.
3) The Great Resignation. While the pandemic precipitated a rise in retirements among baby boomers, they were far from the only professionals to leave the workforce. People with child or elder care responsibilities quit to take care of them; so, too, did those who preferred flexible, remote or hybrid work, and resigned rather than going back to the office.
4) The Digital Economy. As work has shifted online, accelerated by the pandemic, a shortage of computer literate workers was exposed. Those without basic digital literacy skills were left behind – bad news for them, and for employers left facing a skills gap.
Bottom line: the labor shortage is a reality. However, the news for employers is not all bad.
We are working with great candidates every day and speak from experience in saying people DO want to work. They want to be compensated fairly; be given opportunities for flexible hours, and/or remote or hybrid work schedules; made to feel valued and appreciated, and be given a voice in their organization; and feel a sense of pride in their work and their employer. The companies that recognize and respond to these needs and desires will have a leg up when it comes to attracting and retaining top talent.
Like it or not, employers need to work both harder and smarter to find and keep great employees. The team of professionals at Alaant has the expertise and experience to help make that possible. Interested in gaining a competitive edge in the recruiting wars? Contact us today and let’s get the conversation started!
Tom Schin, Director, Talent Acquisition Partnerships & Recruiting Consulting Services
When he’s not working, Tom is an avid board game enthusiast, from Catan to Canasta, who makes sure game night is fun for everyone (even though they’ll probably lose). He’s also fond of celebrating his status as a child of the ‘80s by watching Star Wars, listening to U2, and reminiscing about his (gone-but-not-forgotten) Andre Agassi haircut.