Labor Shortages – How HR Professionals navigate the challenge
Labor Shortages - how HR professionals can navigate the challenge
In today’s competitive job market, labor shortages remain a pressing challenge for human resource professionals. Organizations are struggling to find qualified candidates, and the demand for talent is far outpacing the supply of qualified candidates. HR professionals struggle to devise innovative solutions to attract and retain employees in a highly competitive environment. We have talked about attracting top talent in the past, and the trends for talent acquisition. In our experience, the current labor shortage issue stems from a demographic shift, changing employee expectations, and economic uncertainty is making the issue more demanding. The challenge is affecting how impactful HR departments are, overall organizational productivity, and long-term corporate growth. However, this isn’t a new issue. The US Chamber of Commerce Labor Statistics shows:
The latest jobs report (Dec. 2024) from the Bureau of Labor Statistics showed that thousands of people are entering the workforce. In June 2024, the labor force participation rate for prime working-age individuals, defined as those between the ages of 25 and 54, was 83.7%, marking a twenty-year high. Despite this, however, total labor force participation does not match what it was before the pandemic. If the percentage of people participating in the labor force were the same as in February 2020, we would have millions more people in the workforce today—and this shortage is impacting all industries in every state. If every unemployed worker took an open job in their industry, there would still be millions of open jobs.
TalentSource Pro Tip: The first step in alleviating frustration from a challenging labor market is understanding the problem within your organization. Other things to consider:
- Add an employee referral program.
- Contracting with a recruiting firm (like TalentSource).
- Use recent technologies to streamline the recruitment process.
Strategies to Address Labor Shortage
As of February 2025, there are 7.6 mil open jobs in the U.S., and 6.8 mil unemployed workers in the U.S. (from the US Chamber America Works Data). There are 90 employees for every 100 open jobs. Here are 2 practical shifts you can make today:
- Tap into Underutilized Talent Pools: Organizations overlook potential candidates in non-traditional labor pools. Here are ways the HR professionals at TalentSource can help you widen your search:
- Search from non-traditional groups: SHRM suggests Employers can expand talent pools by lowering qualification and credential requirements and cultivating connections with local high schools, trade schools, and universities to develop internships and apprenticeships. Also, look at other careers that may have transferable skills.
- Leverage remote work opportunities: Consider candidates from geographically distant areas. Many organizations have added distance employees to their team and included monthly in-office meetings to build teamwork. Done correctly, this strategy (bringing distance employees to the office, flying them in) does not add to the budget and increases productivity.
- Welcoming career gaps: Look beyond gaps in a resume. Stay-at-home parents or early retirees returning to the workforce may be the perfect candidate for your open position.
- Freelance workers: Freelance or gig workers may be open to a permanent position with the right incentive, like benefits.
- Offer Competitive Benefits: With candidates often having multiple offers, competitive compensation packages and unique benefits (such as flexible work arrangements, wellness programs, and childcare support) can be effective in attracting top talent. In this article, we talked about designing leadership development programs, here we talked about removing in-office pain points, and ideas for onboarding new candidates were written about here.
According to SHRM, companies nationwide are deploying incentives rarely seen for low-wage jobs, including higher hourly pay, and signing bonuses. Data from the Bureau of Labor Statistics shows a consistent rise in average wages in the United States over the past decade. In 2012 the average was $67,928, rising to $78,894.28 in 2021. There was a slight dip to $77,463.47 in 2022 (pandemic-related). This trend underscores the necessity for businesses to offer attractive wage packages to draw and retain top talent.
The Importance of Strategic Workforce Planning
HR professionals need to adopt a forward-looking mindset. Workforce planning tools and predictive analytics can help identify future skill needs and address gaps before they become critical. Strategies include:
- identifying skills gaps
- utilizing succession planning
- engaging senior management in the conversation about attracting talent
- monitoring workforce trends
- consistently developing talent acquisition strategies
- aligning workforce needs with business strategy
- anticipate future talent requirements.
- maintaining an open dialogue with employees about career development opportunities
Building an Inclusive Future
According to HR Executives, as worker shortages persist, experts say HR needs to double down on upskilling to confront the challenge and avoid frustrating labor shortages. By investing in untapped talent pools, nurturing employee growth, and leveraging technology, organizations can weather these challenges and build stronger, more diverse teams that drive innovation and success. Addressing labor shortages isn’t about filling seats; it’s about shaping the future of work.
Are you ready to take your recruiting strategies to the next level? Partner with TalentSource Staffing for all your hiring needs. With our expertise in sourcing top talent, we can help you build a workforce for the future. Contact us at 574.968.8676 or contact@TalentSourceStaffing.com to schedule a discovery call.