Can’t Find Workers? Get Used to it!

Photo by sol | Unsplash

 

Photo by sol | Unsplash

As the United States slowly returns to the “new normal” of post-pandemic life, we are seeing that our labor force is not returning to business-as-usual. Across the globe, many industries are struggling to fill open job slots as consumers surge back into the market. Here in the U.S., some lawmakers are blaming enhanced unemployment benefits for the slow pace of market stabilization; however, that is a short-term explanation for a long-term trend.

 

While recent happenings may have accelerated and accentuated changes in the workforce, the real cause of current labor problems is demographic, not political. Once we recognize these demographic shifts, we can seize the opportunity to transform how we engage people across our economy and improve our performance as a country.

 

The two major overarching trends that we have yet to come to grips with are our aging workforce and declining birth rates. In the U.S., about 10,000 Baby Boomers retire every day but not enough kids enter the job market to replace those retiring. This trend has grown over the past decade and there are no signs that it will stop. It’s not just Wisconsin or the Midwest. Nor is it just the United States. Almost all developed nations face the same dilemma.

 

These factors dried up the spot market for labor – the ability to find needed talent at the expected time, place, and price. It’s disorienting because in the past this happened sporadically, and for only a few months, rather than years. It has become a chronic, long-term problem, and the numbers are scary. In my state of Wisconsin, for example, a recent Department of Workforce Development dive into the details show there are only 309,000 people available in the job market out of a population of over 5.8 million. That’s not a deep pool for a vibrant and growing economy.

 

The spot labor market’s disappearance also means traditional workforce approaches are losing their effectiveness. Recruiting efforts lose their punch without an available worker pool to attract to where the jobs are. These conditions will force most employers to reevaluate their workforce investments and move resources from recruitment and attraction to engagement and development. In a world with fewer available workers, internal investments will provide a better return than trying to buy talent on the open market.

 

True engagement becomes critical to retain workers and maximize performance. Upskilling the skills of one’s workers replaces upscaling the business at large because needed skills cannot be readily hired. Outreach and development of non-traditional labor sources will also become part of the business model and not just another social program.

 

Engagement investments involve focusing time and treasure on making the most of the employees already in an operation. In the past, workers stayed with one employer for a longer period because predictable wages and the fear of unemployment outweighed the promise of nebulous opportunities elsewhere. Now, the pandemic disruption illuminated many new opportunities to make a better living and balance work and life demands.

 

These changes mean that engagement efforts must go beyond providing a job, buying a couple of ping-pong tables, and holding quarterly all-hands meetings about what the company is doing. True engagement requires seeking employee voices on important changes, the ability to address critical issues head-on, and a higher company ambition than just growth and profits.

 

Scarce talent on the open market will also cause companies to invest more in upskilling rather than recruiting. This change requires a shift in thinking for everyone to lifetime learning and rethinking how we build new skills in our workers – from both industry and educational perspectives. New approaches must develop vital skills while the employee remains engaged and productive for their company. Solutions must be tailored, flexible, and focused, which is the antithesis of traditional approaches to work and learning.

 

Even these changes will not be enough to support economic growth with a worker shortage. We must also drive productivity within our organizations by shoring up the basics and then applying new technology to make our workforces more effective and our products more competitive. Without any new workers, all our economic growth must come from productivity gains. In addition, productivity improvements provide the resources to make the necessary investments to support all of us.

 

These are challenging times, but at the same time, great opportunities are opening in front of our eyes. These opportunities will require us to rethink the way we approach our workforce and future development.

 

The workforce issue is not going away any time soon and we face a stark choice. Either we can grumble about our situation, or we can step up to the challenge and transform the landscape. This transformation will create opportunities for everyone and build a solid future for our country.

 


 

 

Buckley Brinkman

The Executive Director & CEO of the Wisconsin Center for Manufacturing & Productivity sine June of 2011, Buckley is experienced in Lean, Six Sigma, supply chain management, and turnaround planning. He has led efforts to save dozens of operations in the U.S. by finding new ways for them to compete. He revived the North American operations of the world’s largest playing card company, led the turnaround of a prominent trade bindery, and catalyzed the profitable turnaround of a recycled paperboard mill.

A Wisconsin native, Brinkman holds a Business degree from the University of Wisconsin and an MBA from the Harvard Business School.

 


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