A careful study of the U.S. workforce today vis-à-vis the number of job openings reveals a disturbing reality — there is a shortage of labor! The U.S. Chamber of Commerce says there are currently close to 10 million new job openings in America. However, even if all unemployed people take up a job, we still have about 5 million unfilled positions.
In 2021, when businesses added an outstanding 3.8 million jobs, workforce participation was recorded below pre-pandemic levels. Considering that about 30 million Americans lost their jobs during the pandemic, it is expected that workers would return to work when businesses reopened.
On the contrary, we have a current labor force participation rate of 62.1%, down from 63.3% in February 2020 — just before the lockdown. HR experts believe hiring managers and departments need to review their policies to improve employee retention.
Workers who lost their jobs during the pandemic have cited many reasons for the low participation rate, including low pay, lack of career advancement, need for more family time, returning to school, and poor benefits. This, coupled with the detrimental impact of what came to be known as the Great Resignation in late 2021, put many employers almost at the mercy of workers.
Adjustments in Employer-Employee Relationship
The Great Resignation came with unprecedented changes that employers needed to adapt to. For instance, according to Pew Research, workers’ demand for remote work became a thing, with “enough flexibility to choose when to put into hours” being one of the significant consideration points.
But the overwhelming majority of those interviewed by Pew Research cited “low pay” (37%) and “no opportunities for advancement” (33%) as their reasons for quitting. Consequently, the need to quickly fill vacant positions and retain existing employers gave workers more bargaining power.
Employers, therefore, must be ready to provide better work environments, higher compensations, competitive benefits, and flexible work arrangements to win over great talents. These stats show that workers aren’t just in control; they have more control — thanks to recent labor market trends. From greater work flexibility to higher compensation, the workplace is not returning to how it was — at least not just yet.
Most workers who switched jobs during the pandemic period were able to move on relatively quickly. Most of them got a full-time (55%) job while others secured a part-time (23%) offer, with the majority (61%) of the surveyed group saying it was somewhat easy for them to find new jobs.
Employees Are Looking for Something Different
During a Washington Post Live event earlier in August 2021, Tim Ryan, U.S. chair and senior partner at PwC, said that employees are looking for something different, including “protected time off.”
The demand for more flexibility has always been part of the yearnings of workers. When PWC began implementing its holiday week shutdown in December a few years ago, Ryan said that workers’ feedback was “tremendous.” Workers in the company embraced the holiday shutdown as a precious benefit. When everyone takes some time off, workers have a real chance to disconnect from work pressure and recharge.
Recently, because of workers’ voices gaining more momentum, moves like shutting down the entire office for a week or getting more paid time-off (in addition to the usual three to four weeks annual holiday) are gaining more attention.
Ryan also added that the bargaining power of the recent-day employee comes from multiple macro levers that have led to a shortage in the overall available workforce. This includes the great resignation, an aging population, tightened immigration controls, and the growing attractiveness of the gig economy (otherwise known as freelancing).
What Are We Going to Do To Change?
Given the change in workforce dynamics, the question for employers is: What will we do to change?
For some organizations, the change means shifting to a hybrid/remote work model to accommodate employees better and give them more flexibility. For some, it can be giving workers three days in the week. For others, it can take a much more drastic or technical approach, like reimagining how workers’ typical workday looks like in the office.
However, many organizations may simply need to improve employee compensation, provide more inclusive growth opportunities, or treat their workers better. The Great Resignation compels employers to change how they see their employees, and according to Forbes, nowhere is that shift more evident than in the construction industry. The construction industry is currently faced with high employee turnover and a growing lack of interest in the sector by younger generations.
Are you an employer in construction needing help navigating the changes in the labor market or sourcing for high-value talents? TradeLink Solution is a construction-focused staffing company specializing in residential, commercial, industrial, institutional, and sustainable energy candidates for direct placement. For more than 15 years, we have consistently helped our client companies find suitable possibilities, connecting them to the perfect company. Reach out today to learn more.
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