In the United States, there are around 10 million job openings across the country, but only around 6 million unemployed workers. This massive labor shortage has started to affect the ability of companies to keep many of their most important positions filled. So, what are the best ways to overcome problems like these?
This article details some of the main reasons for the labor shortage as it currently exists. To help you out, we also have listed some ways to resolve this lack of workers and ensure you bring in enough people to minimize the impact.
Causes of the U.S. Labor Shortage
The reasons behind the current labor shortage are many and complex, but here are the most important ones that are having an impact on business.
Pandemic. It is hard to discuss the most recent years without bringing up the COVID-19 pandemic and how it affected the world's economy. In terms of the labor shortage, it has had several ripple effects in the economy.
Ongoing illness. Many people became sick with "long COVID" and other disabling examples of COVID infection in recent years. Thus, when the pandemic finally began to abate many of these people could not return to work, leaving many jobs unfilled.
Fear of returning to work. Regardless of the actual threat level, many people are now much more hesitant to return to the workplace.
Many companies are offices that are closed environments or workplaces that put employees in direct contact with members of the public. These situations can often cause people to worry about their health.
Government Policies. Many legal changes in the United States have either created jobs or removed roadblocks from small businesses that need to hire more. Some of these include the 2012 American Jobs Act that gives tax cuts to stimulate job creation, among other changes.
Job Security. Another issue is the growing desire for job security due to the rise in the cost of living. This has led to a lot more loyalty and fewer people switching employers.
New Businesses. In the past two years alone, Americans filed over 10 million new business applications. This means there are at least this many individuals who are not looking for a job and they might also be dipping into the labor pool to fill newly created positions.
Low Pay. There is much more available information for workers today on what a minimum wage, living wage, or fair wage is when compared to others in their industry. If an employer does not offer a competitive salary, it is much less likely to appeal to new workers.
Skill Development. Over the pandemic, many people chose to take a step back and reassess their careers. Some re-entered the education system or chose to work on their skills. While many of these will come back into the workforce in a few years, we are down a few percentage points of workers at present.
Lack of Childcare. The United States is infamous on the international stage for its lack of good, affordable childcare. On top of this, parents know businesses rarely offer significant maternity support. Because of these, many potential workers are instead choosing to remain at home and look after children instead of work if they can afford to do so.
The Impact on Small to Medium-Sized Businesses
The tight labor market has had a severe effect on the ability of businesses, especially small or medium ones, to stay afloat. Every vacancy leads to a higher number of tasks that remains incomplete or opportunities left untaken.
In 2021, this shortage increased in the third quarter. Many of the businesses that found themselves unable to hire staff have suffered decreased profits as a result. As such, it is a huge priority for the entire country to ensure more people are returning to work.
How to Overcome the Challenge and Find Talent
There are many steps you can take to ensure you do everything in your power to overcome hiring issues. While not all will apply to your situation, the following is a selection of our best advice when it comes to looking for new workers. Alter them to fit your situation and you will be able to discover more talent in your niche.
Adapt Your Strategies. One of the more popular labor shortage solutions these days is to change the methods by which one hires. If you are only posting your roles in a few online locations, the only people who see you are the ones who visit there. Other places you could aim to hire through include:
- Local colleges,
- Community centers,
- Social media, and
- Word of mouth.
You could even offer referral bonuses to current employees to help you bring people on. You should pay these only after a new hire has been with you for a significant length of time, such as three months. Doing this prevents people from joining only for the bonus.
Make Allowances for New Methods of Work. If you are a traditional business, you might have ways of doing things that do not appeal to modern workers. You must be a little more flexible in an age where people put quality of life issues higher than in the past. Innovation in work hours and arrangements including working from home some or most of the time will be especially valued.
One example is to allow more remote working. After COVID proved how effective and gave workers a taste of how convenient this method of work was, many people are opting to work from home instead of spending eight hours a day in the office. It could help to refresh and reinvigorate existing workers' mindsets, too.
Consider Nontraditional Applicants. If you have only hired a specific type of person in the past, consider what other options for candidates you have in those who apply. Look more into what skills people must have before they join and consider offering a little more on-the-job training. This means you are likely to be able to bring in people a little younger and greener behind the ears, but who might have fresh perspectives on your work.
Further, tap into the retired or semi-retired workforce. They are typically reliable, hard-working, and knowledgeable – and often looking for something meaningful to do.
Improve Current Staff Retention. Instead of hiring new workers, you could always investigate your staff retention strategy to see if it needs some work.
There are many ways you could do this, including the following:
- Increase the number of positive moments you can provide your employees. This may be free refreshments, better bonuses, or paid-for experiences outside of the office.
- Continuous feedback, training, and development. If an employee does not feel they are receiving training, development, and feedback, they may begin to feel as though they are stagnating.
By working closely with your employees, you can give them the feeling of progressing in their careers. This works even if it is progress toward job security rather than upward mobility.
- Pay workers more. It may seem obvious, but if workers are only getting the minimum you can pay them, they are not likely to feel appreciated. Pay them more to give them satisfaction and show your desire to help them ease their financial burden.
Outsource Some Functions. You do not always need to hire anyone. Look for an external service that can do the same job for less money and you will save both your profits and your time.
Hire Part-timers, Freelancers, and Contractors. When hiring new employees, you might want to think about changing the types of employees you are hiring. If you have only been hiring full-time workers, you could instead branch out to other options.
You could start offering the position as a part-time job, for example. Many workers need a role, but cannot act full-time due to existing commitments. Examples of these commitments might be taking care of a loved one, childcare, or taking on a second job.
By hiring these part-time employees, you can have a greater level of control over the amount of time they work. You can also ensure your business receives cover at more specific times.
Another option is to use freelancers or contractors. You may only need workers occasionally. In this case, make use of freelancers to offload the work instead of having them on staff all the time.
The Benefit to Your Business
All of the above allow you some level of saving by exchanging one resource for another. You may need to pay more to get more workers in or spend more time working to find the perfect new hire. Either way, you can work out a better balance for your business moving forward.
Where to Find More Help
With these tips, you should be able to find a few ways to offset any labor shortages hitting your business. Still, there is always more to learn and better ways to handle such situations. Lucky for you, we are here to help.
Our business coaching sessions can put you on the path toward more profit, fewer losses, and a much happier workforce. All you need to do is get in contact and start your journey. Book a meeting with me today. Brian Tracy USA: 877.433.6225 Email Me email@example.com