The United States labor force is shrinking. As of the beginning of 2022, there are around three million fewer people employed than before the pandemic. The increase in people quitting their jobs, also known as the “Great Resignation” set a new high record at 4.5 million quits in November. Quits in the last six months have consistently topped four million, a significant increase compared with the pre-pandemic levels.
High Demand For Workers
The end of the Great Resignation doesn’t seem near. Many people have changed their work-life preferences, looking for better job conditions, benefits, wages, flexible hours and hybrid or remote work. According to several surveys, the key challenge for managers is employee satisfaction, underpinning companies’ inability to keep their workforce. A mismatch of expectations and aspirations (paywall), as highlighted by Harvard University economist Lawrence Katz, indicates that many employers are looking for a return to the way things were before the pandemic, but many workers have different ideas.
Hiring difficulties are a global phenomenon, and the labor shortage problem isn’t going away. Many have left the workforce and aren’t coming back. In addition to a significant slowdown in the working-age population in recent years, there has also been a considerable drop in the labor force participation rate.
Shifts In Generations And Working Styles
The first baby boomers reached age 65 in 2011. Since then, about 10,000 baby boomers are turning 65 every day—and it’s likely that only a small percentage of them will stay on the job. As more and more baby boomers retire, we’ll likely see fewer people joining (or rejoining) our workforce. If we look at the U.S., we can see that today’s labor force participation rate has decreased from its peak in 2000. This is happening partially because workers are retiring at a faster rate than young people enter into employment for other reasons like schooling or family obligations.
Another contributor is the rise of the gig economy. Thanks to continued industry growth and rising disposable income levels, the global gig and sharing economy market has risen to new heights. Due to economic conditions, the global gig economy and sharing economy market has seen a boom in demand and supply in recent years. A 2020 study commissioned by Upwork found that 12% of the workforce began freelancing for the first time, and 37% of freelancers report having more work than they want.
Robots And Artificial Intelligence
A McKinsey survey shows that technology adoption in business has increased tremendously since the start of the pandemic. Increasingly, more companies are realizing this and are boosting their technology-based capital expenditures in order to improve the physical and mental labor force productivity. The appetite for technology-based solutions is strong today; companies are far more experienced in the process, understand its importance and look forward to employing new technology to improve growth and productivity.
It’s common to hear about how artificial intelligence and automation will eliminate many jobs, and as time goes on, more jobs are becoming automated every day. It’s clear that these changes are happening, whether we like it or not, and it’s no secret that artificial intelligence and automation are transforming the way we do business. Thanks to advanced algorithms, computers are now capable of more sophisticated decision-making than ever before, from analyzing customer data to making purchasing recommendations to steering self-driving cars or even writing this paragraph you just read.
Technology like artificial intelligence is reshaping our lives every day by improving healthcare, education and even travel processes. As with any machine-driven production process that improves human labor, there are winners and losers in terms of replaced jobs. While self-driving vehicles may replace many taxi drivers worldwide in upcoming years, they could also potentially improve safety for other workers and reduce congestion and pollution while increasing productivity overall. In cases like self-driving vehicles, A.I. could be a net positive for both humanity and employment. According to the McKinsey Global Survey of executives, new digital technologies were essential to recovering from the pandemic. Firms that experimented with or invested more in digital technology than their peers had outsize growth in revenue.
As the future of the workforce draws nearer, it’s clear that workplaces will be far more technologically advanced, but with more of a focus on company culture and how employees are supported and well-treated. More and more companies are leaning towards a more flexible working environment that balances work and life outside of work. The recent pandemic has served as a driving force behind the implementation of remote work. Flexible working has become a top employee perk as less than 2% of employees in a FlexJobs survey reported that they wanted to be in the office full time after the pandemic.
Looking To The Future
With the labor force shrinking, business leaders will have to get creative if they want to expand their market share and create new jobs. The good news is, there are many ways they can go about it; invest in your employees and encourage long-term employment, invest in technology and become more adaptive to changes in the workforce.