3 Ways to Weather the Worker Shortage
Worker Shortage

3 Ways to Weather the Worker Shortage

Hiring Demand Hits a New High

Last year, COVID-19 wreaked havoc on the U.S labor market—pushing the unemployment rate to near record highs and causing millions to leave the workforce.

 

But with a new year, comes new challenges. Today, there are two distinct, yet completely opposite ways of looking at the job market. If we look at the data published by the Bureau of Labor Statistics, one could assume we have an abundant supply of workers. The unemployment rate is 6 percent, representing 9.7 million Americans who say they are actively looking for work.

 

However, we’re seeing thousands of help wanted signs and news headlines that tell a different story.

 

A recent article in the New York Times shows that numerous businesses—especially in the restaurant, retail and service industries—face a potentially catastrophic inability to hire. The anecdotes come from the biggest metropolitan areas to small towns across the US.

 

Making Sense of the Labor Shortage

 

But why, after a year, as vaccinations continue to be pushed out across the country, are we seeing such reluctance among job seekers? We tuned in to a recent webinar along with hundreds of other organizations across North America searching for the same answers. Chris Forman, Appcast CEO and recruitment industry veteran, provides a few solid reasons in the video below.  

Rethinking the Way Your Hire

From health concerns and expanded jobless benefits to still being needed at home are among the top reasons would-be workers might be staying away. And according to Pew Research, a full recovery for the labor market appears distant. So, what can businesses do to weather the worker shortage when all else fails?

 

1. Promote Flexibility when Possible 

With the emergence of the gig economy, the American workforce is evolving. The Retail Industry Leaders Association says that, “Technology is empowering individuals to choose when, where and how they work. As a result, the expectations of workers are changing and the opportunities available to retailers amongst others to provide more services to consumers and flexibility to workers are evolving.” But it doesn’t stop at retail.

 

In fact, research shows that flexible scheduling is the hallmark of why millions of Americans choose to work in retail among similar industries. From students to seniors to everyone in between, those seeking part-time employment enjoy the flexibility it provides.

 

2. Review Your Pay Rate

Ensuring your payrate is on par with your talent competitors is crucial right now. Run searches on any of the major sites and see where you chalk up. If you’re too low, some experts recommend raising wages, saying it could provide a solution to the worker shortage. 

 

“We’re going to go back to that really competitive marketplace for labor,” said Marc Wulfraat, the president of logistics consulting firm MWPVL. “It’s going to be a shock to companies that are paying low wages. They’re going to be the ones that are hit the worst, because all that low-wage labor is going to find a home elsewhere—where there’s more money to be made.”

 

3. Turbocharge Your Talent Strategy

According to a recent study by McKinsey & Company and the Retail Industry Leader Association, “Retailers can significantly expand their talent pools for hourly and frontline associates by tapping into on-demand labor models such as the gig economy. This independent workforce is large—68 million people, or 27 percent of the US working-age population—and is expected to account for the majority of the workforce by 2027.”

 

Not surprisingly, 70 percent of survey respondents said they plan to rely more heavily on flexible labor and are already forging partnerships with companies like Hyer. And for good reasons. Unique times such as this one, call for unique, but proven solutions. When traditional methods including in-house hiring and staffing agencies strike out—businesses that leverage the gig economy can address imminent labor challenges while better positioning themselves for success.

 

Sajal Kohli, Global Head of Retail & Consumer Goods at McKinsey & Company might have said it best. “The future is going to be decided by the big bets that you make—and the muscle you put behind it to create a winning strategy.” We couldn’t agree more.