The Psychology Behind the Labor Shortage: Why Some Workers Are Opting Out

A labor shortage means employers struggle to recruit candidates for their job openings and retain top talent. There have been many such shortages, but what’s different about the current one is that it exists despite high levels of unemployment.

Why are Workers Reluctant?

It’s the result of a complex mix of economic factors, including the Great Resignation that occurred in the aftermath of the Covid-19 pandemic, as well as a continually aging workforce and an ongoing mismatch of available jobs and the willingness of people to apply for them.

  • Baby Boomers were already beginning to retire in large numbers when the global pandemic struck. Then, Covid led to an unprecedented increase in retirements. Some industry experts have referred to this trend as the Great Retirement.
  • A contributing factor to job mismatches and the labor shortage overall is a lack of available child and other caregiving resources. The number of working mothers, in particular, has dropped compared to pre-pandemic times.
  • Restrictions imposed in recent years have further contributed, resulting in a significant drop in working-age immigrants in the United States.

What’s the solution for today’s employers?

There is no panacea to address the current labor shortage, but there are ways you can enhance your hiring and retention strategies in response to it. They include:

  • Providing work-life balance: Remote work, which became the norm during Covid, has been a game changer. In one study, Gallup found that 91 percent of U.S. workers would prefer to continue working at least some hours from home. In another statistic, 30 percent said they would seek new employment if recalled to the office.
  • Offering competitive compensation: Even if it’s not always the driving factor in accepting or remaining in a job, the proper pay and perks continue to matter. Bombarded with high inflation and recuperating from pandemic-related financial challenges, it’s more complicated than ever for many to make ends meet. When adequately compensated, people feel more motivated to come to work. Their morale and job satisfaction are higher, resulting in greater long-term loyalty.
  • Helping your employees deal with mental health issues: This ties in with benefit offerings, as struggling to pay for therapy, medications, and other treatment needs can become a terrible irony as they pile on even more stress for sufferers. Offering the best possible mental health coverage is a tremendous asset to everyone involved. Also, start or ramp up your employee assistance program (EAP) to provide additional resources.
  • Offer training and development opportunities: Resolve the job mismatch dilemma and give people the career growth opportunities they seek by shoring up your training and development programs. Support employees with tuition assistance and other means to advance in their fields.

What Else Can You Do?

To stay abreast of all the latest workforce and labor trends – and at the same time, find the talent you need to grow your business and ROI in accounting, finance, engineering, and IT – contact Venteon today.

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