The Demographic Drought: Looking For Workers Who Are Hard To Find

By Ron Hetrick & Tim Hatton; Presented by Dustin Lester, MPA , Vice President of Consulting, Lightcast, at the October 2022 Eggs N' Issues

POPULATIONS ARE AGING AND TALENT pools are shrinking. The same trends that have led to “Help Wanted” signs all over Northern Kentucky are happening nationwide and around the world. The current labor shortage is both unprecedented and systemic. The lack of workers is partly due to short-term trends in how we approach work, but really, it’s a long-term wave that’s finally cresting: a “demographic drought.”

The number of American workers skyrocketed in the late 20th century as the baby boomers entered the workforce, but as they’ve reached retirement age in the 21st century, no other generation has been large enough to take their place.

But that’s just part of the problem: labor force participation has dropped for prime-age workers, as well. The number of people has continued to grow, but the number of workers has not grown along with it. To match pre-pandemic participation levels, we would need 2.7 million workers to rejoin the labor force.

In 2022, the number of job openings peaked at over 12 million before starting a slow downward trend to roughly 10 million—43% more than in February 2020. At the same time, the unemployment rate has hovered near its record low of 3.5%. The labor market has eased since its peak last summer, and will likely continue to slowly cool, but it remains true that almost everyone who wants a job today can find one, while employers are still in desperate need of workers.

So how do we bridge the gap?

First and foremost, we need to re-engage people on the sidelines. When someone is neither working nor looking for work, it’s either because something has prevented them from working or because they’ve found that it’s not worth their while to join the labor force.

Employers can take steps to address those concerns: remote and flexible work can create more opportunities for workers with children, disabilities, or any other factor that might keep them from keeping a standard 9-to-5 schedule. Flexibility and additional training can also attract recent retirees, which can have an especially significant impact based on how large the aging boomer population is. Expanded benefits like childcare and other accommodations would have a huge impact on attracting disengaged individuals to the workplace, as well.

Conventional factors that draw workers to jobs will continue to be effective, too. High quit rates over the past few years have shown that workers are more willing than ever to leave their jobs for better opportunities, whether that’s increased pay, a better work-life balance, or a clearer path to growth and promotion. Workers have shown their willingness to move, so the only question is whether they move away from your organization or into it.

By 2034, older adults will outnumber children for the first time in US history. It’s nobody’s fault that demographics have shifted so dramatically, but it’s everybody’s problem.

The war for talent used to only concern those looking for high-end IT or engineering workers, but now it’s settled on the front porch of main street America. Everyone will need an intentional strategy, and more than a sign in the window, to grow their labor force—whether that’s by expanding opportunities for those on the sidelines or offering more advantages for those already working. Employers need to be proactive, creative, and data-oriented to keep on track and stay ahead of the curve in the demographic drought. NKY https://lightcast.io/ .

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