The hiring landscape is presenting a strange paradox. By April 2021, a record 10 million jobs had opened up across the U.S. And yet, employers are struggling to find workers and the unemployment rate is continuing to grow.
So why is there a labor shortage along with record-high job openings?
The pandemic has collided with many other factors to create this worker shortage. Some of those who are out of work are still uneasy about COVID-19 and feel more comfortable staying away from office settings. Others have had their lives upturned by illness, caregiving obligations, child care and remote learning responsibilities, and relocations. And people who moved during the pandemic aren’t always able to find jobs that coincide with their skill sets in their new locations.
On top of that, many industries have changed over the last 18 months. Consumers are choosing delivery over shopping in stores, for instance. So the need for different positions has changed, and the unemployed might or might not be suited for those roles.
Extended benefits also have prevented some from going back to work. Those who earn less than $34,000 at their jobs can make more on unemployment benefits and often choose to extend their unemployed status while they wait for better opportunities — especially if they have child care responsibilities.
Lastly, many people have come to enjoy commute-free, flexible workdays, and they don’t want to work for employers who are going back to how things were pre-pandemic. In one survey, 39% of respondents said they would consider quitting if their employers didn’t offer flexible remote work options.
These elements have not only created a worker shortage and an uncertain hiring outlook for employers, but also a widening skills gap that makes it challenging to find the right talent.
How Technology Has Widened the Skills Gap and Increased the Worker Shortage
What was a moderately risky skills gap has now become a skills gap crisis. Certain jobs that were still being done by people were fast-tracked for automation due to the pandemic. Now, many human jobs have been overtaken by artificial intelligence and other technology.
Highly skilled roles, on the other hand, are either going to a select few workers with more technical expertise or are going unfilled because they exist in sectors that are fundamentally changed. Technology has stepped up to fill those gaps. And according to some experts, automation that arrives during recessions is more likely to stick around afterward.
In a study on the effects of the pandemic and automation, retail workers, cashiers, and other public-facing workers were found to be more at risk for automation and COVID-19 transmission. What’s more, roles that had the highest risk for automation and transmission are likely to be held by women — specifically those with lower educational attainment. It’s safe to say that this will only increase the skills gaps and worker shortages already rife in the market. And even though around 90% of executives currently recognize the skills gaps affecting their organizations, fewer than half have a plan to bridge them.
Strategies for Employers Struggling to Find Workers
With all of these factors seemingly working against them, what can employers do to brighten their hiring outlook and find skilled workers? Consider these tips:
1. Expand your search globally.
Your usual pool of potential candidates might have become more shallow (or maybe even dried up), but there could be more talent overseas. For those positions that can be done anywhere in the world, open up your search globally.
Global employers of record can facilitate hires for you anywhere in the world. You can find talent in any other country — people who bring needed skills and refreshing cultural diversity to your team — and then engage a global EOR to help bring them on your team easily, quickly, and most importantly, compliantly.
2. Tap into the contingent workforce.
The factors mentioned above have helped increase the contingent workforce, which often has more flexibility and independence. Fortunately for you, this is also the first labor force to come back after layoffs and difficult times. Reopen your talent search to contingent workers, and use them to get important tasks done without committing to full-time employees who have more of an impact on your bottom line.
Partnering with an EOR can help you find and tap into the contingent worker talent pool. Bear in mind, though, that contingent workers are in such demand that they can pick and choose where they would like to be and what they would like to do, so be prepared to negotiate.
3. Partner with community organizations to recruit talent.
If your own talent pool seems smaller by the day, consider collaborating with outside groups (such as community and professional organizations or colleges) to recruit talent.
For example, some educational institutions currently are partnering directly with local manufacturing companies to help upskill their students for today’s manufacturing jobs. As with the above steps, you can use an EOR to facilitate these “internships” without taking on the time and administrative burden.
With forces conspiring to widen the skills gap and worker shortage in the U.S., you need to get proactive about widening your hiring process in response. Overcome these challenges, and you could find yourself tapping into talent pools you never considered before and creating a more diverse, skilled, and high-performing team.
Innovative Employee Solutions is a leading global employer of record that specializes in payrolling and contractor management services for today’s contingent workforce. Hire quickly and compliantly in more than 150 countries to fill skills gaps — all without having to set up business entities in each location. Request a proposal today to learn more about the costs of the global hiring process. For more information, download our free whitepaper, “Building Your Global Bridge With an Employer of Record.”
Written by: Kara Hertzog, President
Kara Hertzog is president of Innovative Employee Solutions (IES), a leading global employer of record in more than 150 countries that specializes in payrolling and contractor management services for today’s contingent workforce. Founded in 1974 in San Diego, IES has grown into one of the city’s largest women-owned businesses and has been named one of the city’s “Best Places to Work” for more than 10 years in a row.
