The “Help Wanted” Crisis

The “Help Wanted” Crisis

In June 2020, most of the world was piecing together what the near future might look like. Families wondered if schools would open the following fall. Workers in fields such as dining and hospitality wondered if their employers would still be afloat when things opened up again.

I don’t know if anyone imagined that one year later, the landscape would be filled with “Help Wanted” signs. Large and small businesses in 2021 face a tight labor market few had predicted. Companies find themselves having to increase pay to draw in even minimally qualified candidates. Even that is often not enough to get the coverage they need.

As expected, pundits, politicians, and interest groups have jumped in with their diagnosis. From one side we hear it’s because of extended unemployment benefits. From another, it’s because companies are underpaying their people. While these arguments have their merits, they’re missing the biggest factor in play.

It’s Demographics

“Help Wanted” signs will continue to be a regular sight going forward because the United States is going through a demographic shift unlike any other. The main factors are:

  • A record number of “Baby Boomers” retiring in 2020.
  • The lowest birthrate in U.S. history.
  • A lower full-time workforce participation rate by prime-age workers.

These aren’t short-term problems that will fade as we move away from Covid. They’re systemic issues requiring new solutions. Some experts are concerned we’re looking at a potential sansdemic, which is a chronic shortage of people that could lead to prolonged economic issues.

New World Order

We’ve covered the shortage of skilled workers in everything from engineering, to IT, and the trades before. This shortage has continued to spread across the entire job market. A recent survey by the National Federation of Independent Businesses found that 42% of company owners had positions they couldn’t fill. It’s an all-time high for the United States. Going into 2021, recruiting has become the top concern of HR departments across the board. The shortage of candidates, plus the increasing demand to fill positions, is creating a paradigm shift where job seekers have more power. They’re looking for:

  • Higher compensation
  • Flexible hours
  • Remote work options
  • More stability

Companies that can’t offer these risk falling behind because they don’t have the people to cover essential responsibilities. It’s a particularly difficult situation for many small businesses, whose bottom line has yet to recover from 2020.

Identifying the Problem

This is a new problem, so it’s critical for decision-makers to move outside long-held worldviews to create solutions. What we’re getting, unfortunately, are standard, surface-level talking points. The immediate problem is plain to see, but facing the reason behind it requires moving outside our comfort zone.

For those entering the job market in the coming years, they’ll find a different environment compared to those who came before. The ramifications are still working themselves out, but it’s never been more important to set old assumptions aside to navigate these new economic waters.

For 30+ years, PRA USA has helped our clients and candidates navigate the ever-changing job market in the fields of Electronics, Embedded, and Controls Systems. Contact us to discuss your recruiting headaches, so we can help you find a solution.

 



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