Around the water cooler, we’ve heard a number of explanations as to why candidates are so scarce right now. Recently, we sponsored a webinar presented by Emsi Burning Glass where they revealed their extensive labor market research. Backed by numbers, their data shed a whole new light on the situation.
So, what’s really going on out in the candidate pool?
The answer: it’s complicated. In short, this report indicates a combination of things going on, all of which began well before Covid disrupted our lives. Here are just a few explanations Emsi Burning Glass offers.
Retiring baby boomers
One major source of the candidate shortage is the retirement of the Baby Boomers (born between 1946 and 1964). While a typical year sees about 2 million baby boomers retire, 2020 saw over 3 million (Source: Pew Research Center). Even though a strong retirement trend was already happening prior to Covid, the pandemic convinced even more baby boomers that it was time to retire.
The next challenge: Low birth rates
Can’t Gen X, Y, and Z candidates just replace those retiring? Ideally, this is exactly what would happen. As workers age and retire, the younger generation simply steps in. The torch gets passed. That brings us to another situation Emsi Burning Glass low birth rates.
The magic number we need here is a replacement rate of 2.1. This simply means that each family having an average of 2.1 births keeps the population from shrinking. Like many other developed countries, we have been existing below that key metric (for the US, since the early 1970s).
Baby boomers came from families with an average of 4 children. And the baby boomers themselves had families that average fewer than two children. So, in a very literal sense, there are not as many people entering the workforce as there are leaving it.
Of course, there are a number of factors that went into creating this reality; that’s a topic for a separate blog. But ultimately, none of it is right or wrong. It simply is what we are working with right now.
So, what do we do next?
The Emsi Burning Glass article also addresses some common solutions to the challenge (immigration, having more babies, using AI/robotics, etc.). While each concept can give some level of relief to the issue, none of them really fix the immediate problem at hand. Instead, Emsi Burning Glass discusses other approaches.
Solutions: Developing our future workforce
This is the part that will hopefully be a bit more uplifting. Thankfully, there are some solutions to these challenges. Admittedly, they require creativity and will ask more of employers. We know this comes at a time where we all feel like we have been pushed to the very brink of our sanity. However, this shortage appears to have become part of normal life, so we may as well look it in the face.
Your current employees
In short, what do you currently have available to you for resources? Who is on your staff? What are their strengths? What is their potential? Take a mental assessment of your current situation and find as much value as you can with what you have. That’s the first step.
Next, what can you do to hold onto and develop the resources you have? In markets like this where we’re short on candidates, your competition tries hard to lure your top performers away. There are many articles out there on how employers can keep their best talent. Some of these articles are more realistic than others, but it’s not a bad idea to reflect on and strengthen your current retention efforts.
Yes, some of this will absolutely come at a cost. But the cost of losing and having to replace your employees will typically far outpace the cost of retention efforts.
Creating needed talent
There will always be a place at the table for recruiting efforts. But in situations where recruiting isn’t enough, it may be time to get the right person and groom them for the role. In a sense, you’ll be creating a training program as a solution to the shortage of candidates. And for those already on the team, these programs extend to them in the form of upskilling to ensure skills stay current.
With both a retention plan and a program that helps to train and re-train employees, you will not only be able to create needed talent but will also be able to retain your investment.
In the end
As a small business, we understand the challenges with these ideas and programs. It’s not easy. But ultimately, anything you can do that moves you at least a step or two in this direction could yield some serious ROI for you in the near future.