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The Workforce Shortage is Simple Math

And there is a fix for that

One of the reasons everyone is having a hard time finding workers is simply because there are a lot fewer workers than there used to be. It’s not because no one wants to work, or even that there are no good child care options. It’s simple math.

workforce numbers tableChris Czarnik, a former military officer, human resource manager, career services manager and job search advisor has noted that typically three generations make up a workforce. Previously we had the Baby Boomers, GenX, and Millennials. Yes, the Millennials took up the slack for the retiring Boomers, but now it’s GenZ filling those slots as GenX populates the more experienced rungs. So instead of the two larger generations and the one smaller one, you have a workforce made up of the two smaller generations and one larger. It’s a difference of around 8 million people. 

Labor force participation has also been declining since its peak in the late 1990s at around 68 percent and is now only at around 63 percent, a full percentage point lower than before the pandemic, but not terribly out of line with trends.  This is an additional difference of around 16 million people.

LRP trend graph

(Source: Federal Reserve Bank of San Francisco, Economic Research)

Czarnik however, has also noted that this is not a reason to despair. His suggestion is to treat employees the same way you treat customers. It has never been terrible that you have had to compete for customers, improve your products, efficiency, pricing and/or service to get the customers you need to build your business. Employees are now in that same category. You need to compete for them the way you compete for customers. You have to offer a good job, someplace people want to go because it is a good place to work, where they are treated well, where they can learn new skills, or can see a path for their future. A job that offers them what they need.

What that looks like for your business and for your employees is going to be different than any other, but this shift in perspective should lead you to finding the people you need. On the face of it, it sounds expensive, but we have never heard of changes a company implemented to improve the work envirnoment that did not, in turn, improve overall profitability.