Studies reveal that by 2030, you can reckon that there will be a shortfall of 85 million workers across the globe.
As companies started returning to their normal production levels and are beginning to stabilize, there is a major hindrance that companies must navigate before being called stable. It is the prevailing labor shortage.
By 2030, around 25 million project professionals for new projects will be in need. As per PMI’s 2021 Talent Gap report, this shortfall will intensify when it is time to deliver these projects.
What is a Labor Shortage in Brief?
It occurs when there is no adequate workforce available to participate in the labor market so that the demand for employees is met. Check out a few facts here.
- In the United States, as many as 11 million job vacancies are there. But the number of unemployed listed is just 6.5 million workers as found in 2022.
- In Europe, employers are finding it tough to fill in 1.2 million job roles that are still open.
- Down Under, employers are struggling to fill in 400,000 vacant job roles.
- In Singapore, for every 100 candidates available, 163 job roles are lying vacant.
Reasons Attributable to Labor Shortage
Few driving forces are leading to such disruptions. Let us find out what these factors are.
It is understood that the incidence of labor shortage will differ from one place to another. Not just that it will also vary from one industry to another. And each sector and place will have different challenges depending on the prevailing market conditions and the factors determining the same.
It is essential to identify these factors so that the employers can work out their strategies as far as recruitment and retention are concerned and streamline every process in any organization, irrespective of the domain. As such, let us look at the factors that are responsible for the labor shortage.
1. Covid-19
The role of the pandemic cannot be undermined. World Health Organization reported that as of March 2022, more than 6 million people were dead due to the pandemic and millions are still suffering from long-term effects due to the virus.
2. Mental Health
Many workers are suffering from mental health issues due to the pandemic. U.K’s Office of National Statistics reports that half of 40,000 workers that gave up their jobs between February 2020 and November 2021 had long-term mental issues. In the United States, it was revealed in a survey that 2/3rd of millennials who gave up their job in 2021 had cited mental health as well.
3. Disruptions in Immigration
The global workforce comprises 5% of migrant workers. Countries like Saudi Arabia, the United States, United Arab Emirates, the United Kingdom, Germany, and Canada bank heavily on migrant workers.
Most countries had sealed their borders, and immigration policies were changed to prevent the spread of the virus. For instance, in the UK, Brexit coupled with Covid-19 led to a fall in immigration rates by about 90% in 2020.
4. Change in Worker Expectations
As per a recent study, 95% of workers are flexible when changing jobs and 92% are ready to change their domain.
5. Low Wages
As per Randstad Employer Brand Research, 62% of the workers across the globe rank their salaries as one of the most important factors as motivation for switching jobs. For instance, countries of North America anticipate seeing a rise in wages in 2022. But countries in Latin America expect to see a rise just by 92%, which is 78% in the Asia Pacific and about 50% in the Middle East. African workers are expecting a hike as well.
Which Industries are being Impacted by the Shortage of Labor?
Not all industries are affected uniformly across the globe. Check out the sectors that have been adversely affected.
1. Manufacturing
As far as the manufacturing industry is concerned, it was in the doldrums even before the pandemic struck. Experts have been predicting a labor shortage in this sector long ago, and the shortfall is 8 million workers.
In the USA, experts are predicting a shortfall of 2 million unfilled job roles by 2030. In the UK, the largest ever labor shortage is already underway in more than 30 years.
2. Supply-Chain
The logistics sector is trying hard to wriggle out of the crisis. In the US, employers are battling to fill in positions of more than 80,000 open truck vacancies. In the UK, there is a shortfall of 100,000 truck drivers. It is 18% in Mexico and 24% in Turkey as far as driver shortage is concerned.
3. Health Concerns
In the UK, 57% of the nurses are thinking of giving up their jobs. The figure is 32% in the US where nurses want to be freed from the direct patient-to-nurse roles. There is already a warning from the International Council of Nurses that more than 50% of nurses could give up this profession in the next couple of years.
4. Travel and Tourism, Hospitality
In this sector as well, many have preferred to give up their roles and instead migrate to safer havens to avoid being in touch with travelers.
How to Overcome the Labor Shortage and the Problems Associated with it?
These are a few ways in which this problem can be managed to a great extent, if not full.
1. Investing in Employee Training
According to McKinsey Global Institute’s prediction in 2017, as many as 375 million workers across the globe will need to learn new skills.
The same firm also reveals that by 2030, 25% of the workers will be displaced and migrate to other sectors.
2. Employ HR Technology
HR SaaS Solutions are being used by 46% of employers across the globe. Investing in it makes sense.
3. Hire Fresh Workers
If getting experienced workers is a problem, hire freshers and train them.
4. Updating Employee Value Proposition is Crucial
The expectation of workers plays a major role during the pandemic. A report by Randstad Employer Brand Research reports says that assists workers to maintain a work-life balance.
Last but not the least, make use of talent analytics. In this period of cut-throat competition, it is important to monitor labor trends. As per the 2021 Talent Trends Report by Randstad Sourceright, use talent analytics as a data visualization tool to study more about the employees.
