4 Ways to Overcome the Labor Shortage

Media outlets, think tanks, and employers have come to a consensus: the nation is suffering one of its worst labor shortages in history. The U.S. workforce is aging and cannot meet the economy’s capacity, according to the Brookings Institution. CNBC recently reported that the gap between vacancies and available workers was nearly 5.5 million and the U.S. Chamber of Commerce reported that the transportation, health care, accommodation, and food sectors have had the highest numbers of job openings. Manufacturing and many other industries have also been struggling to hire both skilled and unskilled workers.

The labor shortage situation is likely to worsen, as the Census suggests that by 2030, approximately 21% of the U.S. population will be older than 65 and the U.S.-born population of working age will be insufficient to replace these workers. With so many more openings than workers to fill them, many companies are (or will soon be) scrambling to find solutions to their workforce shortages. Fortunately, there are non-conventional solutions that can work for your business. Here are a few to consider:

Hire refugees

According to international law, a refugee is an individual who is “unable to return to his or her home country due to a well-founded fear of persecution based on race, religion, nationality, political opinion, or social group.” The Department of Homeland Security reports that 77% of refugees in the U.S. are of working age and are strong candidates to fill positions in industries suffering from labor shortages.

Concerned about vetting your employees? Refugees are subjected to the highest level of security checks for entry into the country, and once selected for resettlement, must undergo further extensive vetting. The process takes two years on average and requires background checks, medical screening, cultural orientations, and multiple interviews.

Companies that hire refugees may also, in certain circumstances, qualify for federal tax credits through the Work Opportunity Tax Credit (WOTC). The benefits continue with employee loyalty; a 2018 report commissioned by Tent found that the average turnover rate for refugees in manufacturing companies was just 4%, far below the 11% for all employees. Across industries, 73% of employers surveyed reported higher retention rates for refugees than other employees.

According to the UNHCR, the global refugee population rose to 27.1 million by the end of 2021. Two-thirds are from just five countries, Syria, Venezuela, Afghanistan, South Sudan, and Myanmar, but this data needs to be updated with the 5.4 million refugees from Russia’s war on Ukraine.

More than 100 companies have joined the Tentative Alliance for Refugees in America. If you’d like to explore this possibility, the U.S. Employers’ Guide to Hiring Refugees is a practical toolkit intended to help companies design and implement refugee employment programs.

Offer the benefits selective candidates seek

Job candidates have more leverage and options in a market with a surplus of unfilled jobs. Many are opting to work with companies that up the ante with perks. Millennials and younger workers especially are especially interested in child care assistance, tuition reimbursement, customized well-being programs, longer maternity and paternity leaves, flexible working hours, the option to work from home at least part-time, and flexible PTO. Many surveys show that the younger generations value such perks, in many cases, more than salary. Consider calibrating salaries and perks to attract this new generation, based on their expressed values.

Tap into different labor markets

There are a variety of ways to access talent pools that traditional means, including online job boards like Indeed and Ziprecruiter, miss. One way is by sourcing job candidates that are still in school. Get a jump on soon-to-be graduates by setting up apprenticeship and internship programs and working with local colleges and universities to source talent. Talk with schools, including high schools if you need less skilled labor, about setting up programs for students who would like to prepare for a career. Another is by sourcing passive candidates: work with employment agencies in your region and industry to source talent that is currently working, but could make a move for a greater opportunity. Use online tools like LinkedIn or in-person resources like professional association events to find the working professionals with the skills you seek. Then reach out.

Streamline processes and work more efficiently

While the above solutions are a necessary part of your talent acquisition strategy, none will produce overnight results. Technology can help bridge your talent gaps. Enterprise resource planning (ERP) software can bring up-to-date industry best practices to your business. As part of these efficient practices, industry-specific ERP solutions are designed to enable your business to work with a more streamlined staff. These technology solutions make processes more efficient and enable each individual to be more productive. You may even find that your labor needs are significantly lower once your ERP solution is in place.

The new paradigm in hiring is simple. Whatever solutions you choose to implement, the more proactive you are, the better. Don’t wait to fill positions when they open. Instead, continuously fill your pipeline with available talent by having conversations and building relationships. Then take the final steps when you have an urgent need to hire.