What is causing the US labor shortage?
What is causing the US labor shortage?
It’s now more common than ever to see “for hire” signs going up in store windows across America due to the U.S. labor shortage we are currently experiencing. Companies are desperately searching for qualified talent to recuperate from the major streak of resignations and employees quitting in 2021.
Main Reasons for the US labor shortage
But why is this happening? The answer lies in the shift of attitude among Americans and generally across the globe after the pandemic.
The covid 19 pandemic caused many issues and it’s one of the major reasons for the US labor shortage we are currently experiencing. Many people started to value the importance of flexibility in their workplace, increased compensation, and job opportunities that generated actual value to their professional and personal growth.
Even though there has been a slight increase in wages, employees still feel their work is not compensated for with a fair wage. As employers try to attract talent by increasing salaries, the difference isn’t as significant since the economy is still recuperating from incredible economic loss during 2020 and 2021.
At the beginning of the pandemic, many were worried about working from home. But, after a while, people got used to the idea. Once the time to go back to the office arrived, many decided that they didn’t want an office job and searched for new opportunities.
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Many parents had to leave the labor market to care for their children during the pandemic. There was a period when daycare centers were unavailable, or the parents could not afford them, so they decided to take matters into their own hands and exited the workforce to take care of their children.
As many quit their jobs, the remaining reduced workforce had to take over the missing positions, adding more stress to their work and causing complete burnout. With added responsibilities and stress even more employees quit their jobs.
How does the US labor shortage affect the supply chain?
The manufacturing and transportation industries have seen a significant decrease in their workforce during the past few years due to employees’ shift in mentalities and their new needs. This industry is not as attractive as others, like technology or healthcare.
Many see these industries as outdated, especially for the younger generations entering the labor market. Therefore, there’s a big gap in the capacity required to operate critical parts of the entire supply chain. This, in turn, has generated slower deliveries and delays, contributing to the current supply chain disruption.
Additionally, companies within the transportation and logistics industry are now requiring a blend between frontline employees and qualified professionals to become part of the team. This new need is increasing since companies are now implementing technology into their processes; therefore, they require professionals with specific skills to make these systems work.
The US labor shortage was aggravated during the past two years due to the pandemic, and it’s likely to continue. Therefore, companies must understand what is happening and act taking into consideration employees’ new needs. Companies within the supply chain must search for alternatives and change the conversation around the industry to attract talent and secure candidates for their operations.