A comprehensive overview of the shortage of talent in key sectors of the US economy, and what employers can do about it.
While predictions suggest that the United States might narrowly avoid the recession that most of Europe is facing, it has a serious challenge on its hands: addressing the shortage of workers.
A scarcity of talent has been a big concern for employers across a range of sectors for most of 2022. In order to identify the scale of this challenge, we analysed staff availability across a range of sectors for our Talent Scarcity Report 2022/23: The State of the US Labor Market.
Here’s an insight into what we found.
Candidates placing more value on ESG
During tough economic times it’s easy to assume that offering more money will entice more workers. This is both an incorrect assumption and frankly, an unsustainable approach for firms. Our research shows that financial incentives can only go so far in the US war for talent.
Instead, people want to progress their career and they want to work for a business that cares.
The pandemic put more emphasis than ever before on Environmental, Social and Governance (ESG) frameworks. The fall out of the Great Resignation saw individuals have greater choice over who they want to work for. Brands with the greatest appeal were those that treated their people well during the difficult months of Covid.
Add the climate crisis and movements such as Black Lives Matter and #MeToo to the mix and it’s no wonder so many American citizens want to work for an employer that has an environmental and socio-economic commitment.
Diversity Equality and Inclusion (DEI) still a challenge
While the workforce is certainly placing more emphasis on working with an employer that has similar cultural and ethical values, there’s still more work needed on the diversity agenda. Almost every sector we analysed had a need for greater workforce diversity.
This was more obvious in sectors which have long struggled with stereotypes. Oil & Gas and Life Sciences & Pharmaceuticals are prime examples. Both have long been known to be male dominated environments. Progress may have been made, but more clearly still needs to be done.
Digital skills in short supply
Digital talent has been in high demand across a range of sectors in the States for some time now, however the scarcity of workers has been more notable in certain specialisms. Finance and banking have seen particularly high demand for FinTech experts, largely driven by the continued need for digitisation of the sector.
However, the recent news that tech giants have laid off large numbers of individuals will likely change the digital talent landscape in the coming months.
Large scale demand following job losses
The impact of the Great Rehiring followed by the Great Resignation is still playing out across the US. Throughout 2022, the demand for workers has remained high. Data from the Bureau of Labor Statistics (BLS) indicated that employment levels were up across 46 states for the year ending October 2022.
In any normal environment, an uplift in those in employment makes hiring difficult, with fewer candidates in the market for a new job. The challenge for businesses today is more acute thanks to the Great Resignation, which has seen people move jobs on a greater scale than most of us are used to.
This trend may have come to light in the first half of the year, but it’s by no means disappeared. According to the Job Openings and Labor Turnover Survey (JOLTS) from the BLS, almost 4.1 million workers quit in September 2022. That’s a lot of movement in the market for employers to contend with.
How to address the US Labour Market Talent Scarcity
There’s no simple way of addressing the talent scarcity across the US, but there are ways to help move this issue towards a resolution:
- DEI: It goes without saying that more needs to be done to improve diverse recruitment across the entire talent supply chain. Limiting the pool of candidates is never advisable (after all, a diverse workforce is more productive, innovative and motivated). Doing so when there’s not enough workers makes even less sense.
- Be a caring employer: People have more choice over the brands they want to work with. As a result, if your company doesn’t make the cut for talent pools, you’re going to struggle to recruit. Demonstrating where you stand on the ESG agenda will be a game changer for 2023.
- Use data and technology: Data can be hugely valuable in streamlining workforce management. Knowing which suppliers are most effective, where talent can be utilised from other areas of the business and how much spend is being channelled into certain routes is a must.
- Support skills development: More immediate solutions might be needed, but the ultimate challenge is that some skills are simply in increasingly short supply. Being involved in growing skills should always be on your agenda.
- Use your partnerships: Every business is struggling with a scarcity of talent. Work with your partners to get the external advice on where improvements can be made to broaden your talent pools.
Find out more about the talent scarcity in the US by downloading our Talent Scarcity Report 2022 / 23: State of the US Labor Market.