The Conference Board Analysis Confirms Labor Shortages Are Making a Comeback in 2021

After seeing unemployment rates reach 15% in April 2020, it seems incomprehensible we may already be facing a labor shortage in mid-2021.

New research, Labor Shortages Are Making a Comeback, released by The Conference Board May 25 indicates we may have cycled right back to where we were in early 2020 with a labor shortage in blue-collar and manual services jobs.

In a survey by The Conference Board conducted in April 2021, 80% percent of employers with a majority of non-desk workers said they find it “very” or “somewhat difficult” to find qualified workers, versus 60% of employers with a majority of professional and office workers who said the same.

One year after hitting 15% unemployment, rates do remain elevated at 6%, which is above pre-pandemic levels. But qualified workers are once again hard to find. The combination of a surge in demand with stagnant labor supply created historic recruiting difficulties in April and May of 2021. 

A summary of key takeaways from The Conference Board research can be found below, but we wanted to highlight one we find one in particular as it relates specifically to opportunity youth:

Labor shortages can be somewhat alleviated, though not completely resolved, by using a mix of recruitment strategies.

Some of the quickest and most impactful solutions involve making changes to the recruitment process, such as adding or modifying employee referral programs, contracting with staffing firms, implementing new/advanced technologies to streamline recruitment and better target candidates, and shortening the recruitment process with fewer interviews and faster hiring decisions. Another strategy is to expand into new recruitment demographics, populations, and geographies.

“We agree that this is a key ingredient to successful recruitment during these times of labor shortage and opportunity youth fill this bill,” said Charles Hiteshew, Hire Opportunity Coalition CEO. “Let us help you connect to opportunity youth, both nationally and in key markets.” 

Please Contact Hire Opportunity via our web form or email Susan Hughes (shughes@hireopportunitycoalition.org) to learn more about how we can help connect you to young people looking for employment nationwide.

Additionally, to learn more from The Conference Board, sign up for its June 3 Webinar—The Reimagined Workplace a Year Later: Human Capital Responses to the COVID-19 Pandemic—being held June 3 at 11 ET.

 


Summary of Key Takeaways from The Conference Board Research Report

Though unemployment rates remain high, labor shortages in many industries are back.Large segments of the economy continue to open at the same time, and labor supply is constrained, resulting in shortages which are likely to remain for the better part of 2021. Employers have been deeply impacted. Qualified workers are once again hard to find, and retention rates are low.

  • Though unemployment rates remain high, labor shortages in many industries are back. Large segments of the economy continue to open at the same time, and labor supply is constrained, resulting in shortages which are likely to remain for the better part of 2021. Employers have been deeply impacted. Qualified workers are once again hard to find, and retention rates are low.
  • Recruiting and retention difficulties are more pronounced in blue-collar and manual services jobs. While demand for these workers is rapidly growing, labor supply is low: these workers face high infection risk and elevated unemployment benefits are an attractive option for workers with relatively low wages. Tech occupations are also experiencing a tight labor market as the US economy shifts to more online activity and digital transformation grows.
  • Wages are accelerating. Companies are reacting to the labor shortages by raising wages, especially in the leisure and hospitality sectors and other blue-collar and manual services occupations.
  • After a pause in 2022, tight labor markets will remain until the next recession. Some causes of the current labor shortages are temporary; labor shortages may ease by the end of 2021, but not for long: labor shortages may reappear as soon as late 2022. Massive job growth in 2021 will significantly lower the unemployment rate and tighten the labor market. And for the first time in US history, the working-age population is shrinking as many baby boomers are retiring. Though this demographic shift will create increased demand and job opportunities, as younger unemployed job seekers take up these positions, the unemployment rate will lower.
  • Labor shortages can be somewhat alleviated, though not completely resolved, by using a mix of recruitment strategies. Some of the quickest and most impactful solutions involve making changes to the recruitment process, such as adding or modifying employee referral programs, contracting with staffing firms, implementing new/advanced technologies to streamline recruitment and better target candidates, and shortening the recruitment process with fewer interviews and faster hiring decisions. Another strategy is to expand into new recruitment demographics, populations, and geographies.
  • Companies should reevaluate and possibly lower credential requirements. To increase the available pool of candidates, organizations could lower requirements for prior experience and for skills/competencies. However, lowering hiring requirements often creates a need for investing more in improving the skills and development of new recruits. Many companies could do this by actively creating talent pipelines by cultivating connections with local high schools, trade schools, and universities to improve technical curricula and develop internships and apprenticeships.
  • Remote hiring provides an opportunity to recruit candidates who were previously out of reach.The pandemic has posed another potential solution: employers can hire remote workers when they struggle to recruit for office jobs, especially in tech occupations. Inclusion of candidates who can work remotely means employers can cast a wider net. In an April 2021 survey of 231 HR leaders, organizations reported they were more willing to hire remote workers (87 percent of respondents compared to just 48 percent before the pandemic). And some surveyed organizations are willing to hire 100 percent virtual employees anywhere in the United States (25 percent) or globally (7 percent), compared to a combined 5 percent before the pandemic.