Five strategies to overcome the US’s labor shortage of the 2020s

The US economy is in an unusual position, and so are employers. Demand is strong. Consumers are flush with cash and spending more. Vaccinations rates are rising, and Covid19 cases have fallen by a third across the country. Normally, we would expect robust hiring. Unfortunately, workers are dropping out of the workforce making it difficult to hire new employees to meet demand.

According to the Wall Street Journal, companies are eager to hire—government data shows job openings this summer soared to a record high—but a large number of workers who left the labor force during the pandemic haven’t returned. The number of workers who cited the pandemic as the reason they didn’t look for jobs rose last month for the first time since January, reaching 1.6 million.

Other factors include parents staying at home to care for children due to a lack of affordable daycare and some schools remained closed. Additionally, many older workers have decided to retire.

However, there is good news for employers. Many currently employed workers are looking to switch jobs, but only if they receive a better deal than their current employers. According to PwC’s latest workforce pulse survey, an astonishing 65 percent of employees are looking for work. (This is a double-edged sword as voluntary turnover rates are higher than pre-pandemic levels and are rising at three percent per month, according to the US Bureau of Labor Statistics.)

What do these employees want? According to PwC, they want higher wages, better benefits, career advancement, and flexibility. Please see PwC’s chart at right. The wants of job seekers identified by PwC are similar to those I  highlighted earlier this summer by Cause and Social Influence and the Us Department of Labor. Other good news is that college graduation rates are expected to continue to rise slight by the annual rate of two percent, with four million students graduating this year.

While offering good wages, benefits, and career advancement opportunities are important draws for job searchers, remote and hybrid work models also are essential.  The job site Indeed has reported an uptick in hiring of some high-tech employees such as system engineers, IT help desks, software developers and IT operations—when remote work is available. An article on Indeed’s website clearly illustrates a dramatic increase in tech job searches, after Twitter and Facebook announced they would allow for permanent remote work, Indeed saw huge spikes in searches for jobs at those companies. Please see the chart below.

Many executives still cling to the notion of returning to normal after the Covid-19 pandemic. This is a false hope. The pandemic dramatically changed expectations of work. Young workers, in particular, want more hybrid or remote work options, collaborative and supportive work environments, and employers that offer learning and careers, not just jobs. Employees have the upper hand in most industries as America’s workforce shortage is not a transient phenomenon. It is long-term – the results of low birth rates, restrictions on immigration, and difficulties automating many office jobs.

The question for office-worker employers is how will they revise their work environment and brand to meet the interests of today’s workers? Here is my checklist of five strategies for you to follow:

  1. Reach out to workers, especially younger workers, where they are online. While young workers look at job postings, you need to find them on social media such as YouTube, TikTok, Instagram, and Snapchat. Office professionals of all ages will still be on LinkedIn, but it is not enough anymore if you want to get new college graduates and young workers. The typical, written job posting won’t attract them. Your initial post ought to be a 30-second video of a young employee talking authentically about the positive work environment in a self-made video on a hand-held device. Other topics can include the chill work your organization does, the learning offered — and how you will continue to keep — employees safe during the pandemic. It is not just one video, but a stream of them that continues a dialogue on your work environment and brand. Forget the slick marketing. They will not believe it. These new strategies will also work as part of your college recruiting.
  2. Pay market wages and offer good benefits. As of June, total private sector US wages were up 7.9 percent from February 2020, and the wages for low-wage earners in leisure and hospitality were up 10.4 percent, according to the US Labor Department. This workforce knows there is a shortage, and they will not work for the businesses that pay poorly. The number of rejected offers and ghosting of interviews and offers has gone through the roof. Your planning for next year’s salary structure change should be in the range of 6.5 percent, depending on your industry and region of the country. Good benefits include health care benefits, paid time off, a 401(k)s with an excellent match, and learning and career advancement opportunities.
  3. Offer flexible working options and wellbeing to address work-life balance. Several surveys, such as Limeade and Gartner, show that around 60 percent of the workforce does not want to return to work in the office five days a week, 9 to 5. I hear of stories every week of employers who have had to reverse calling all office workers back to the office because of workers are saying they will quit rather than return. While younger workers have more issues working in small apartments or having young children, they also want options to address work-life balance.
  4. Provide digital transformation of HR and work processes. Young workers are digital natives. They expect the workplace to be as easy to navigate and transact as it is on Amazon. I have a few questions for you. Is your job application process one click? Is your onboarding process as easy as making purchases on Amazon? When employees have a question, do they have to call a call center and get a ticket? Do you provide easy-to-watch learning videos (either internally produced or online) and coaching? Can remote team members collaborate with each other as easily as collocated teams? If you answer “no” to these questions, you need to make serious investments in digital technology.
  5. Show Trust. Young workers are suspicious of business, especially large corporations. It would be best to have managers who can relate to them. Emphasize the public good your company provides with its products, services, and community service. But that is not enough. Managers must build relationships and trust every workday. Certainly, managers need to cover the big picture, set goals and expectations, define team norms, and provide timely feedback and coaching. But study after study shows that of all of these actions, the most important is to build trust with employees, especially with new, younger employees. The easiest way for managers to build trust is to ask employees to identify their strengths and development areas and career aspirations, then put a plan in place to help employees develop their skills and achieve their goals.

The US labor shortage isn’t dissipating quickly. It will continue to exist through the 2020s. It would be best if you implement these strategies to attract and retain your workforce.

Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting, managing partner of InnovationOne, and Sales Advisor to MeBeBot. He works with companies to transform HR and recruiting, implement remote work, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: the Best of Empirical Research, Method and Process, and Digitization. Subscribe to his weekly blogs at 

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