If you’re a business owner or hiring manager then you have likely experienced your fair share of hiring woes this last year. “The Great Resignation,” as it’s been coined, has seen millions of people quitting their jobs creating the biggest labor shortage in recent history. According to credit agency Standard & Poor, this will create a structural change in the economy for 2022.
Between July and September, over 12.7 million people left their job. Many are not returning to the job market. The key to stabilizing the labor shortage is for 3 million workers – about 45% of those that left – to return to work, says S&P.
“U.S. labor market conditions since the pandemic began, highlight a possible structural shift in the labor force, with almost two-thirds of the missing workers having left the workforce entirely,” S&P found. “We estimate that 42% of the drop in the labor force participation rate is due to structural shifts and 58% of the drop is for reasons that stem more directly from the pandemic and may be temporary.”
Here are a few reasons for these structural changes and how your business can offset these challenges.
Labor Shortage of Skilled Workers
A lack of skilled professionals has been an issue for several industries over the last few years. However, the problem has been amplified since the pandemic due to older workers retiring early.
Now is the time to start investing in young Millennials/ Gen Z and train them to do jobs that are in high demand. Start offering training for these positions you’re hiring for instead of seeking someone who has several years of experience in a diminishing field.
COVID-19 Concerns & Vaccine Hesitancy
There are still people concerned about risking exposure and spreading the virus to their kids or an immune-compromised family member. With the Omicron variant now in the US, it doesn’t make the problem any easier. Fortunately, vaccines are readily available to those that want them. Additionally, therapeutics treatments are being created and doctors are discovering early treatments that are shortening the duration of the virus.
For Arkansans, only 50% of the state is fully vaccinated. Regardless of your stance on vaccination, mandating vaccines in your business will drastically reduce the size of your available labor pool. The labor shortage is already hard enough, don’t make it harder on yourself if you’re in desperate need of staff.
Labor Shortage due to Wages
A majority of workers that are leaving were the “essential workers” of the pandemic. Because pay and working conditions haven’t improved, they are leaving for better opportunities.
It is without a doubt a worker’s market right now. Candidates are looking for companies that can meet their needs. Look internally and see if your company can offer an increase in pay or offer work-life benefits that employees will find desirable. The most important thing job seekers want is to be part of an organization where they feel valued, appreciated and treated with respect.
Because of the labor shortage, hiring has been a struggle for nearly every business this year. The pandemic has shaken things up so much that we are looking at a structurally different labor market and economy in 2022.
But the good news is that you can prepare now and adapt your business to offset the labor shortage! Start by training younger candidates entering into the workforce. Implement ongoing professional development or skills training programs for your entire workforce. Look for ways to increase wages and benefits that job applicants will find appealing.
Change is not always a bad thing, find a way to use it to your advantage!