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The mysterious case of the missing workers
It’s summer! After a long, cold winter that lasted well into May, the weather finally turned and I’ve been enjoying the sun. Things are looking up.
For the labor market as well - many countries record the highest level of open vacancies ever. Business owners are sounding the alarm bell because they can’t find enough people to fill them.
Which begs the question: where are the workers? We saw unprecedented levels of unemployment during the pandemic, and people should be coming back to work. Especially in countries where vaccination programs are well under way and the economy is re-opening. Why aren’t they? What’s keeping them back?
It’s a question that many are trying to answer. Some give thoughtful insights, and others rely on their gut and say the first thing that comes to mind. I watched an interviewer ask Jamie Dimon, CEO of JPMorgan, why there are so many job openings. He answered: "People actually have a lot of money, and they don't particularly feel like going back to work."
In other words, because people receive benefits, they see no reason to apply to these vacancies. Which also implies that once you stop these benefits, they will come back and the labor shortage disappears.
One problem though: the record number of vacancies is a global phenomenon. Almost every country where the pandemic is relatively under control experiences a workforce shortage. And these countries have different unemployment and benefit systems.
So what’s really happening? I decided to look into the state of the workforce and see if I could find data to explain these labor shortages. And I really didn’t have to look very hard to find data pointing to 12 very reasonable explanations why you can't find people now.
Keep in mind that we were headed towards a skills shortage before the pandemic - I even wrote a newsletter on that topic. In light of that, it is more important than ever to deeply understand your workforce: who’s in it, what are their skills and capabilities, what do they cost? Where can you find them? How can you make sure they choose you instead of your competition?
Armed with this data, you can forecast, run scenarios, make predictions, in short, prepare your company in the best possible way. So that’s why I include an overview of workforce analytics solutions.
Wishing you a warm and enjoyable summer,
to fill out the HR Systems Survey before July 15. If you participate in the survey, you’ll get a free copy of this insightful report.
More about the workforce shortage
Tim Hughes and I talked about the state of jobs and the labor market, the role of technology to support work, how work and location are now 2 separate things and the choices people will make when looking at the role of jobs in their lives.
Timothy Noah dives into the "Great American Labor Shortage" where wages and job openings are up. He reminds us that nothing about the pandemic is normal, the conditions that created the labor shortage are temporary, and explains why economic recovery will taper off.
MIT Sloan provides this dashboard to benchmark your organization’s readiness to adopt a workforce ecosystem approach that relies on internal and external participants. It can be a critical strategy to combat labor shortages. Compare yourself to others on a number of criteria.
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