What’s Behind the Labor Shortage & What Can Employers Do To Improve Recruiting?

January 17, 2022

Labor Shortage

Recruiting is particularly challenging for employers today, and one of the most significant underlying factors is the labor shortage. In general, a labor shortage occurs when the pool of qualified candidates is not sufficient to meet the demand for workers. More specifically, the labor shortage we’re inside of today is making it difficult to fill hourly, entry- and mid-level positions, particularly in the restaurant & hospitality, retail, entertainment, manufacturing, and healthcare industries. 

In conducting their COVID-19 Labor Shortage survey, the Society for Human Resource Management (SHRM) found that nearly 90% of the employers they surveyed were struggling to fill open positions, and 73% of those employers saw a decrease in applications for those open positions. And data from the US Bureau of Labor Statistics (BLS) confirms the numbers behind these difficulties. As of November 30, 2021, there were 10.6 million job openings in the US and only 6.9 million people classified as out of work and actively looking for jobs, meaning there were .7 unemployed people per job opening.

We’re looking at some of the primary causes of the labor shortage and some solutions to help employers meet the associated challenges. 

Public Health & Safety Concerns

Just as the return to work commenced for the workforce, the emergence of the delta and omicron variants of the COVID-19 ushered in new and increasing public health and safety concerns. The New York Times data for January 10th shows nearly 2.8 million new confirmed coronavirus cases worldwide. Nearly 1.5 million of those cases were in the US, and almost 65,000 cases were in Massachusetts. Average daily cases per capita are higher in the Northeast than in any other US region, with the highest recent average cases per capita occurring in Rhode Island. 

New tensions related to vaccines, boosters, masks, and mandates in the office have some workers feeling like they can’t rely on an employer to provide them with a safe working environment. It’s vital for employers to follow the guidelines issued by the CDC, the Federal Government, and their respective state health authorities. Incorporating your response to the pandemic into your job postings can help assuage your prospects’ fears.

The Demand for Flexibility & Autonomy

The increased demand for flexibility has also changed the landscape for recruiting. For many employers, offering remote or hybrid working environments has been an effective solution to meet the increasing demand for flexibility. Even if your workforce is not fully remote, you may consider offering remote working capabilities as a hiring incentive for key roles. 

Regardless of the working environment, it is particularly important to assure candidates they will have what they need to do their jobs effectively, including the appropriate decision-making capacity. According to the US Census Bureau’s data on business formation, the number of unincorporated self-employed workers in the US has increased by nearly 9% over the last year, so more and more individuals are turning to self-employment and gig work for autonomy. Reexamining your management style, especially when it comes to remote and hybrid working environments, may help you stay ahead of this particular curb.

You want your job ads to set you apart from the competition, so let your candidates know about any automated tools you employ, such as those for payroll, scheduling, administration of benefits, and timekeeping. These tools promote productivity, flexibility, and efficiency, especially in a remote or hybrid environment, and your prospects will recognize their value.

The Demand for Higher Wages & Superior Benefits

For the last five decades, wages have been on an overall decline. And, while workers may have been more apt to stay with their employers and overlook opportunities for higher pay historically, today’s workforce is feeling the weight of pandemic fatigue, and workers are reevaluating their priorities and expectations. As a result, we’ve seen a mass exit, which is now termed “The Great Resignation.” 

In November 2021 alone, 4.5 million workers voluntarily quit their jobs, and more workers in general are opting for early retirement. Studies show the majority of workers actively on the hunt for new jobs are in search of higher pay and better benefits. Many employers are already responding by raising wages and offering non-traditional incentives, such as sign-on bonuses and remote-working arrangements for lower-level employees. 

Demographics & Socio-Economic Factors

Baby boomers are aging, and the number of US births has declined each year since 2008, with one exception in 2014, which means more workers are retiring and fewer young workers are entering the workforce. Border closures and controls have slowed immigration, meaning fewer immigrants are entering the workforce. Systemic issues, such as sexism, ageism, and racial and ethnic inequalities, also come into play. 

Even though employers understand that diversity is vital, they can be guilty of filtering out workers, whether by design or inadvertently, based on pre-existing biases and inequities. To avoid these missteps, you may consider involving your business in networks that cater to talent outside of your usual hiring pool, which can open up opportunities to seek and recruit minorities. Often, these connections can be made by partnering with local schools, organizations, and grassroots initiatives.

Managing & Communicating Job Requirements

Misaligned requirements and expectations between available workers and open positions also contribute to shortages in labor. For example, by requiring a degree in a certain field, you may be excluding qualified candidates. Now is the time to take experience, on-the-job training, and other competencies, such as adaptability, problem-solving, and collaboration, into account. Consider whether you could teach the specific and technical aspects of the position you need to fill to a new hire with these strengths. And if you use automated hiring software, reexamine your filters to ensure you aren’t missing out on connections with qualified applicants. 

To attract more candidates, employers should promote their initial and ongoing training efforts in their job ads. You may also consider offering free skill-building workshops in exchange for a specific term of employment.

Employers should also make a concerted effort to avoid any communication breakdowns in the recruiting and application process. An SHRM study found that 42% of respondents felt the top reason they were still unemployed was that they were not receiving responses from the job applications they submitted. Stay on top of your submissions and keep in touch with applicants and other candidates throughout the process.

Contact Commonwealth Payroll & HR

The professionals at Commonwealth can help you streamline your business’s HR & benefits management, time & attendance management, scheduling procedures, and payroll processes, all while helping you cut unnecessary costs and increase revenue! 

We want to help you uncover opportunities to improve your recruiting process, keep your employees happy and productive, and enhance the productivity and efficiency of your operations. If you’re ready to learn more, contact us today!


*The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. This article contains links to other third-party websites provided only for the convenience of the reader.

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