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Innnovation Advice

Labor Shortages and Challenges

Updated: 6 days ago



As a Cube insider, you'll get access to interesting new trends, what we think about them and how you can benefit.


 

New Trend: Labor Shortages and Challenges Will be Long-Lasting


According to the US Chamber of Commerce, there are 8.5 million job openings and only 6.5 million unemployed workers. The COVID-19 Pandemic forced some workers into unemployment and some have yet to reenter the workforce. The workforce participation rate has not recovered and is lower than in 2020. 


Population forecasts for the developed economies show that we are getting older and the birth rate is declining. The United States population growth rate will slow to 0.3% between 2023 and 2053, calculated by the Congressional Budget Office.  


Furthering the challenge, the last of the baby boomers will soon be retiring. By 2050, the average age of an American working will be 41. 



 Generation Z was born between 1995 and 2010 and is currently 14 to 29 years old. They are the newest entrants to the workforce.  As with prior generations, Gen Z has new ideas, preferences, and views. 

  • They are tech-natives and comfortable with being always connected. 

  • They want “We” more than “Me”. 

  • They accept diversity as a normal way of life.  

  • They are more fiscally responsible after watching older generations suffer in 2007 global financial crisis and Millenials dealing with college debt. 

  • They are willing to work for success where it’s meaningful and rewarding.


Companies trying to hire either minimum-wage or high-skilled workers will have challenges filling open positions in the years to come. There will be fewer people in the workforce with Gen Z becoming a major factor. Businesses need to adapt to fewer available workers, evaluate the type of work, and focus on increasing retention. 


New Insight: Maximize Retention and Productivity

Considering that labor shortages are here to stay, businesses need to adapt. Here are three focus areas - retention, automation, and remote work - to consider. 


Retaining workers who have experience and who can fill multiple roles is valuable. Retention is also more cost-effective and beneficial for business stability than attrition and hiring new workers. Gen Z workers in particular want rewarding, meaningful work that is appreciated. They like being part of something bigger than themselves, in a community with others. Businesses should consider ways to create opportunities for advancement, build a community among employees, and provide positive feedback for continued personal and professional development. 


Automation and digital tools are becoming a way of life for workers. Gen Z will be the first generation ready and eager to adopt new technologies in the workplace. Automation can replace or assist with menial and repetitive tasks, potentially making those jobs more productive and efficient. Technology can be leveraged to provide promising talent with new skills and opportunities to advance their careers. 


Remote work and work from home became the norm during the pandemic. Flexible work hours and locations are more attractive than traditional work environments and long commutes. Opportunities to reconsider where work is completed while adjusting business models to accommodate remote work may allow businesses to tap into a new talent pool. 


New Action: Seek New Ways to Create Opportunities for Employees

The labor challenge is an opportunity to improve your business by focusing on retention, automation and remote workers. We recommend seeking out new ways to create opportunities for employees. 


1 - Explore retention programs and track detailed metrics.  Consider perks, wellness offerings, and mentoring programs. Benepass is one example program that can help companies improve retention. 


2 - Evaluate applications for automation and digital tools that could improve employee productivity and reduce demand for repetitive, unimaginative work. 


3 - Consider where labor can be done remotely such as tech-based customer support and/or offered in fractional shifts in order to tap into a new talent pool. Ubeya is an example of a flexible workforce management system that enables employees to self-select hours, among other benefits. 

Are you ready to take your business to the next level?  We can help you evaluate the market and determine the best next steps.  If you are interested, N³ Innovation can help you! Contact us today!


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N³ Innovation does not endorse the organizations or products mentioned in this newsletter. If you are interested to learn more, contact us today for a full landscape and targeted solutions.

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