Help Wanted: Combating Employee Shortages
on April 11, 2022
By Brooke Kraft, Senior Talent Acquisition Specialist, VGM Group, Inc
Everywhere we look, we see the signs: now hiring, help wanted, please be nice to the staff that did show up today (that one is my personal favorite and a good reminder). Our favorite restaurants, bars, and coffee shops are closed on Mondays and Tuesdays, menu items are limited, and our coworkers are leaving for possible greener pastures.
Regardless of how you are internalizing the current labor market, you can likely relate as an employer, employee, and as a consumer. It seems we cannot escape the continuing ripple effects of our current economy, including mass labor shortages. As we work toward understanding and adjusting to this new labor market, the realization hits that there are many contributing factors and not a one-size-fits-all solution.
The Great Resignation
Anthony Klotz, a management professor at Texas A&M University, coined the phrase “Great Resignation” after realizing this is more of a cultural shift and movement than a moment in time.
“When we come into contact with life-threatening events,” he said, “we tend to reflect on death and consider whether we are happy with our lives or whether we would like to make changes to them.”
The pandemic has forced people to take stock of their lives and take advantage of the opportunity to reinvent and reimagine it. Surveys and research being conducted show that over 40% of full-time employed U.S. adults are actively looking or considering a new job search, and according to the Department of Labor, a record 4.3 million people quit their jobs in August.
Employees are opting for roles where they aren’t required to commute and can work from home. They are having to consider family pressures brought on by lack of daycare or supporting an ill loved one. And fear of the virus is still ever-present. Then there are those who simply are taking the opportunity to look for a role with a higher paycheck.
Whatever the reason, it seems like the Great Resignation is real and can be seen across virtually all industries. As a result, employers are scrambling to attract and retain workers via sign-on bonuses, remote work, and enhancing benefits to support workers’ personal and professional development.
The Changing Workforce
The current shortage can mean different things to different companies—some being short on skilled positions, others on entry-level/non-skilled roles, and some on both. Considerations need to be in place for changing demographics that date back pre-pandemic. We need to be prepared for more permanent loss of workers with a high number of aging and retiring workers realizing there isn’t a need to return to work. Some are taking early retirement, and many cite fears of the virus as their main reason to stay out of the workforce. The loss of experienced workers has made it necessary to look at succession planning that may not have been in place pre-pandemic.
Then there’s the fact that even in a labor shortage, a job seeker cannot simply get a job. The U.S. is highly educated, making for a misalignment in our population. There is a growing number of adults enrolling in four-year colleges, and the working-age population of noncollege graduates is shrinking. If we have over 6 million jobs that do not require a college degree but a population of college graduates seeking to utilize the degree they earned, we can begin to understand a labor shortage for certain positions.
On the other hand, highly skilled roles are requiring more innovation in keeping and retaining talent. Jobseekers aren’t going to continue taking positions that aren’t offering relevant experience to move them forward in their career. In a tight labor market, highly skilled workers have the upper hand and are holding out for quality jobs, pay, and benefits.
Similarly, employers are taking care not to hire a highly-skilled candidate for a role that they know does not offer quick upward mobility. Of course, employers need employees, but it is still costly to hire someone knowing that an overqualified candidate will most likely quit at a faster rate.
Combating the Shortage
Let’s start with the elephant in the room: higher wages. If we think about pay, we need to think holistically. Throwing more money at people will rarely solve all our problems, and it’s the same case here. We cannot expect simply raising wages to do more than create a temporary fix. That being said, employers are now, more than ever, are taking a closer look at the stagnant wages that have been a major problem for decades. To put things in perspective, the federal minimum wage was $1.60 per hour in 1968. In 2021, we know the federal minimum wage to be $7.25, whereas the equivalent federal minimum wage to 1968 should be $12.38 per hour.
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This article was originally featured in the VGM Playbook: Forecasting 2022. To read the full article and more like this, download your copy of the playbook today!
- human resources