The US labor market is expected to face a significant shortage of workers in the coming years due to various factors coming together. According to Lightcast Senior Economist, Ron Hetrick, HR leaders need to start planning for the impending talent shortage.
One of the major factors contributing to this shortage is the aging workforce, with many Baby Boomers retiring and leaving the workforce. This trend is expected to result in a deficit of six million workers by 2032, affecting industries like healthcare, hospitality, and services the most.
In addition to the retirement of older workers, there is also a decline in the domestic-born labor force in the US. The workforce is becoming younger, more female, and more educated, leading to a gap in key trade, service, and healthcare roles. This has resulted in a reliance on immigrant workers to fill these positions, with a significant number of doctors and nurses in the US being foreign-born.
Furthermore, there is a decrease in the number of male workers in the US due to issues like substance abuse and incarceration. These factors combined are creating a perfect storm that HR leaders need to be prepared for.
To address the impending talent shortage, HR leaders can consider various strategies such as relying on local workforce development programs, outsourcing work to other countries, increasing automation, or hiring immigrants. It is essential for HR leaders to be aware of all available options and be open to hiring from diverse sources to fill the gaps in their workforce.
Moreover, simply focusing on workforce development may not be sufficient to address the personnel and skills gaps that will arise with the predicted shortage of six million workers. Companies will need to adjust their business models, temper expansion plans, and rethink aggressive goals to adapt to the changing labor market.
HR leaders are advised to reframe job postings to highlight earning potential and promotion opportunities, especially for roles that do not require a college degree. Upskilling existing employees can also help bridge the gap in skills and qualifications needed for specific roles.
Overall, HR leaders need to start preparing now with clear intentions, measurement strategies, and a willingness to try new approaches to address the upcoming talent shortage. Being proactive and open-minded in recruitment and training strategies will be key to navigating the challenges posed by the changing labor market landscape.
