Attracting and retaining skilled workers has rarely been more challenging as 54% of companies globally report talent shortages—the highest in over a decade. According to a ManpowerGroup survey, talent shortages in the U.S. have more than tripled in the last ten years, with 69% of employers struggling to fill positions, up from just 14% in 2010. “As U.S. employers face the highest skills shortages in over a decade, the relationship between employer and employee is shifting,” said Becky Frankiewicz, President of ManpowerGroup North America. “Skilled workers are in control and companies need to understand people’s priorities to compete.”
By 2030, there are estimates that the global talent shortage could reach 85.2 million people, resulting in the loss of trillions of dollars in economic opportunity for companies. The industries that will be most affected are what labor market analysts call knowledge-intensive industries such as financial services, technology, media, telecommunications and manufacturing.
So, the question is, why is the talent shortage so acute? Here are some points to consider:
Older employees are retiring
As reported by Pew Research, the pace of Baby Boomer (people born between 1946 and 1964) retirements has been accelerating. This issue was exacerbated by the Covid-19 pandemic, with the number of retired Baby Boomers increasing more from 2019 to 2020 (3.2%) than in previous years. In the third quarter of 2020, nearly 30 million Boomers were forced to retire, leaving a large and unanticipated gap in the skilled labor pool. There are several reasons for this. For some, it was simply the right time. Other older workers retired early because they lost a job and gave up hope of finding a new one.
Not enough talent to fill the void
With the majority of Baby Boomers moving out of the workforce by 2030, younger generations will not necessarily have the experience or training necessary to fill many of the jobs left behind. And for those that do, many are rethinking whether climbing the corporate ladder is really worth it. For one thing, it isn’t easy to get promoted. “What determines promotion rates is mainly company growth rates,” says Wharton School researcher and management professor Peter Cappelli. Because business growth has slowed down over the last two decades, promotions are taking longer. Millennials are also just plain burned out, as described by author Anne Helen Petersen in her book, Can’t Even: How Millennials Became The Burnout Generation. “Exhaustion means going to the point where you can’t go further,” Petersen writes, while “burnout means reaching that point and pushing yourself to keep going, whether for days or weeks or years.”
Changing needs and expectations
The last year has changed the way employees view and approach work. In short, employees want more, and they don’t want to compromise. In the EY 2021 Work Reimagined Employee Survey, more than half (54%) of employees surveyed globally would consider leaving their job post-pandemic if they are not provided some form of flexibility in where and when they work. Liz Fealy, EY Global People Advisory Services Deputy Leader, says, “Employees’ willingness to change jobs in the current economic environment is a game-changer. The Covid-19 pandemic has shown that flexibility can work for both employees and employers, and flexible working is the new currency for attracting and retaining top talent.” Workers also want to be measured on the value they deliver, not the volume. According to a study by Citrix, 86% of employees said they would prefer to work for a company that prioritizes outcomes over output. And they expect to be given the trust and autonomy they need to do their best work. Then there’s work-life balance. In a survey conducted by Prudential, of the workers planning to look for a new job post-pandemic, 38% are doing so because of work-life balance challenges.
It’s clear that the pandemic has forever changed the employment landscape. More workers want better work-life balance, flexibility and the ability to work remotely. As a result, organizations that want to succeed and close the talent gap need to evolve with the times. Businesses know they have to get creative to attract and retain top talent. And the ones that do will reap the rewards.
Source: Caroline Castrillon via Forbes