Navigating the Labor Shortage
Employers continue to face the impact of workforce disruption caused by the pandemic. Labor shortages have affected companies in nearly every industry across the United States. Current data from the U.S. Chamber of Commerce show there are 8.5 million job openings in the United States but only 6.5 million unemployed workers. While current hiring rates are outpacing quit rates, employers are still wondering why we continue to face a worker shortage and what the future holds for the employment market.
There are many variables that ultimately led to the labor shortage. Several include an aging workforce, a greater number of workers no longer seeking full-time employment, and job seekers who are being highly selective with roles that provide better compensation, work-life balance, and company culture. Labor analysts are also seeing a shift from the “Great Resignation” to the “Great Reshuffle.” Quite simply, many Americans are now searching for and finding better opportunities within new occupations and industries.
As an employer, it’s important to understand this will be the new normal for the labor market. If you’re expecting relief, it’s highly unlikely. Experts are forecasting continued compression across industries which will result in further labor shortages. Some companies are taking the “band aid” approach by offering job-perks, hiring non-traditional workers and promoting from within the organization. Ultimately, this still isn’t enough.
In order to navigate the labor shortage now and into the future, employers need a well-developed recruitment and retention strategy. This means investing in your current talent and building strong pathways to recruiting new talent. Having foresight and embracing innovation will be key to your company’s success. Here are a few considerations on how to prepare:
Focus on employee retention: It’s much more cost-effective to retain a current employee than to hire a new one. Look for the potential within your existing team to show there a career path with your company. Reward good work and provides opportunities for team members to share insight on their work experience. Value them and they’ll value you!
Invest in your people: Upskill and reskill your existing workforce to meet evolving needs. Provide training and development programs that help employees stay engaged and relevant. Don’t wait on succession planning! Have a plan in place and be ready to execute it.
Rethink your Employee Value Proposition (EVP): What makes your company a great place to work? Competitive pay, benefits, and career development are a must. Go beyond the basics!
Look beyond traditional hiring pools: Remember, many job seekers are switching careers. It’s important to consider candidates who bring valuable skills and experience that are transferable to your role.
Develop new pathways to build strong talent pools: Posting a position and attending a job fair will no longer cut it! For employers it’s all about building networks so prospective employees to come you!