How to Hire Effectively During a Labor Shortage
The U.S. labor market is facing a tough challenge right now—there are more job openings than workers to fill them. The latest data shows there are about 8.2 million job openings across the country, but only 7.2 million unemployed workers. This gap has left many employers struggling to hire the talent they need to keep their businesses running smoothly. But don’t worry! There are strategies you can use to stay ahead of the competition, even during a labor shortage.
Why Is There a Labor Shortage?
Before we dive into solutions, let’s take a quick look at the key factors driving this shortage. Several trends have come together to create a perfect storm, including:
Early Retirement: Many older workers chose to retire earlier than expected during the pandemic, either for health reasons or because they reassessed their work-life balance.
Low Net Migration: Immigration has slowed significantly in recent years, reducing the flow of workers entering the U.S. labor market, especially in industries like agriculture, hospitality, and construction, which often rely on migrant labor.
Childcare Crisis: The pandemic worsened an already challenging childcare situation. Many parents, particularly mothers, have had to leave the workforce or reduce their hours due to a lack of affordable childcare options.
These factors, among others, have contributed to the current imbalance between job openings and available workers. But here’s the good news—employers can still attract top talent by being strategic and proactive.
1. Get Creative with Job Requirements
One effective strategy to combat the labor shortage is rethinking your job requirements. Many employers stick to long, rigid lists of qualifications, but that could be turning away potential candidates who are more than capable of learning on the job.
Example: Instead of requiring five years of experience and a specific degree for every position, focus on the skills and potential that really matter. Can someone with strong problem-solving abilities and the right attitude be trained for the role? This more flexible approach can help you reach candidates who might otherwise slip through the cracks.
Tip: Consider offering on-the-job training or apprenticeship programs to help fill skill gaps. This can open up your talent pool to a wider range of applicants who are eager to learn and grow with your company.
2. Offer Competitive Compensation and Benefits
With fewer workers available, it’s important to stand out with competitive wages and benefits. If your salary and benefits packages are below the market rate, top candidates will likely go elsewhere.
According to the U.S. Bureau of Labor Statistics, wages have been steadily rising as companies compete for a smaller pool of candidates. But compensation isn’t just about pay—it’s also about offering benefits that matter to today’s workers.
Example: Offering flexible work hours, remote work options, mental health support, or childcare assistance can make a huge difference in attracting talent. With the childcare crisis still in full swing, for instance, offering childcare stipends or on-site daycare can set you apart from other employers.
Tip: Take a close look at your benefits package. Survey your current employees to see what they value most and adjust your offerings to meet those needs.
3. Tap Into Untapped Talent Pools
Sometimes, the solution lies in looking for candidates where others aren’t. Many companies overlook talented individuals simply because they don’t fit the traditional mold.
Second Chance Hiring: Currently there’s an untapped talent pipeline of 77 million U.S. adults with criminal records. Hiring someone with a criminal record can provide you with a determined, loyal employee, and has the benefit of programmatic and financial support from the Federal government.
Return-to-Work Programs: Consider launching programs aimed at professionals who have taken time off, whether for parenting, caregiving, or other reasons. These individuals often have valuable skills and experience but may need help re-entering the workforce.
Underrepresented Groups: Ensure your recruitment efforts are inclusive and reach underrepresented groups. This includes improving diversity and inclusion practices, partnering with organizations that serve minority communities, and ensuring your job ads use language that welcomes all candidates.
Tip: Look beyond the typical resume and focus on transferable skills. A candidate from a different industry may bring a fresh perspective and the problem-solving abilities you need.
4. Leverage Technology to Speed Up Hiring
Speed is critical in today’s labor market. With so many job openings, candidates are not going to wait around—they’ll move quickly to another offer. This is where technology can help streamline your hiring process.
Example: Use AI-driven tools to screen resumes and match candidates to job openings faster. An Applicant Tracking System can automate tasks and streamline the hiring process.
Tip: Simplify your application process. Make sure it's mobile-friendly and doesn't require candidates to fill out long forms or jump through unnecessary hoops.
5. Focus on Employer Branding
In a tight labor market, how you’re perceived as an employer is more important than ever. Candidates are not just looking for a job—they’re looking for a company with a strong culture, good work-life balance, and a commitment to employee well-being.
Example: Share stories about your company’s culture on social media and your website. Highlight employees' success stories, your diversity and inclusion efforts, and how you’re making a positive impact in your community. Candidates want to know they’re joining a company with values that align with theirs.
Tip: Encourage current employees to share their positive experiences on platforms like LinkedIn and Glassdoor. Their testimonials can be powerful in attracting new talent.
Stay Flexible and Proactive
Hiring during a labor shortage is no easy task, but it’s not impossible. Above all, remember to be flexible and proactive in your approach. The companies that adapt to the changing labor landscape will be the ones that continue to grow and succeed.
Now’s the time to refine your hiring strategy and stand out in a competitive market. By doing so, you’ll not only fill your open positions but also build a team that can help your business thrive long-term.