As economies around the world continue to wrestle with the impacts of the COVID-19 pandemic, there are widespread reports of employers being unable to find workers. In the U.S., despite a historic number of job openings, a significant amount of the population remains unemployed, which is particularly surprising given the fact that there are more than seven million people who were in the workforce before the pandemic who are without jobs today. What's become increasingly clear is that, in today's market, recruiting talent to meet demand will be an uphill battle for organizations of all sizes and in every industry.
Ankura Senior Managing Director John Frehse sat down with Ultimate Kronos Group's Dave Gilbertson to break down the science behind the U.S. labor shortage and answer the following questions:
- What’s really going on with the labor market?
- Will raising wages bring the workforce back?
- What strategies can leaders deploy today to recruit and retain talent in today's market environment?
Key Takeaways
- The labor shortage isn't just about federal employment benefits or low wages. Though those issues certainly play a factor, there are significant concerns surrounding childcare, care for the elderly, and workplace safety that is preventing the workforce from coming back to work.
- A comparative analysis of the states that ended federal unemployment benefits early and those that didn't debunks the myth that federal unemployment benefits are keeping the workforce at home. In fact, states that ended federal unemployment benefits early had a slower recovery than those that didn't.
- In many cases, organizations are setting their starting hourly wages higher than $25 per hour, which is much higher when overtime is considered, and still cannot hire workers.
- Marriages are on the decline, the "Baby Boomer" generation is passing down a significant amount of wealth to their children, and number of people just want to change their careers after working from home for an extended period of time. All of these things factor greatly into the labor shortage.
- There was a labor shortage before the pandemic as the labor market was undergoing a significant shift as the public's views of work continues to evolve. The underlying challenges surrounding labor participation will remain long after the COVID-19 pandemic is gone and we've returned to normal, regardless of whatever that "normal" is.
© Copyright 2021. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
