Many assumed that as soon as the pandemic began to subside and the jobs that were lost began to return, there would be an influx of hiring with companies inundated with candidates who had been laid off due to the pandemic. But much to our surprise, this did not happen. And it has left companies, market analysts, and the Government puzzled as to why. It's been difficult to pin the cause of this major shortage in labor on any one reason. However, it’s fair to say that the pandemic forced all of us to do a “Great Reflection.”
With reflection, typically there follows action or a change and shift in behavior. Multiply this by an entire global population of people—all going through the COVID-19 pandemic, which is arguably one of the single biggest moments in modern history—and it becomes unsurprising that there are many unexpected changes and shifts happening on a macro level. Along with this “Great Reflection,” let’s consider some of the main potential contributing factors that together created the perfect labor shortage storm.
Many in business believed that increased benefits and stimulus checks issued during the height of the pandemic removed some of the sense of urgency for people to get back to the employment market, allowing people to return on their own time. While this may have been a factor to a degree—based on the market factors, the level of benefits provided enough of a cushion for many not to rush back to the job market again (especially when the lion share of the talent shortage is concentrated in the blue-collar and hourly labor market)—it’s hard to make this argument when little changed long after these benefits ended. More likely, this highlights how strong public-facing workers’ concerns were over returning to work and is further evidence of that “Great Reflection” I keep coming back to.
The pandemic saw all of us make sacrifices in our freedom, our finances, and even with our families. In particular, many families had to make tough choices when schools closed and children were forced to do their schooling at home. This was especially challenging for families that were used to both parents generating an income for the household (not to mention single parents). The reality is, families were forced to adapt and many of these households moved to a single income. In doing this, many realized that despite the financial and economic impact, having one of the parents at home full time offered a number of other benefits, and in many cases, was necessary. It’s estimated that around 2 million women have left and may not return to the labor force post-pandemic, which hurts the much needed and valuable diversity that women contribute to the labor force.
The labor shortage has been greatest in the hourly worker market, and these workers have had to contend with the need to return to work that could put them and their loved ones at risk. Many still have very understandable fears. And because many still have concerns regarding the vaccine, we have seen that without herd immunity (a high enough vaccination rate to stop COVID-19 completely, making it so that even those who are unvaccinated aren’t at risk), COVID-19 isn’t going away. And while it’s clear that the vaccine greatly reduces serious illness, new more infectious strains are continuing to mutate and spread. The result is that these workers are at a major point of reflection, where they’re asking themselves whether their low paying hourly job is really as important as the health and safety of their loved ones as well as themselves.
The mandate set in place for companies with over 100 employees requiring them to have their employees vaccinated, as well as many companies having policies that require multiple COVID-19 tests in order to prove that a worker is not unwell, has meant that for those who are not vaccinated, there is now a barrier to employment that many are not willing to cross and are certainly not willing to cross in return for a low paying hourly job.
Career Change and Reskilling:
For many of the workers who are currently not returning to their former jobs, one of the driving factors is that many of them took the forced time off from work to rethink what skills and what training and education they need to better their lives and earning potential. This has very much been the case for younger adults who took this opportunity to advance their careers and will be returning to the labor force with greater value and better prospects. While it’s good that they are advancing their careers and bettering their lives, their absence has left behind open roles.
There were a considerable number of employees that saw their jobs instantly removed when the pandemic hit, without any real care or loyalty to them, which was certainly a cause for contention as well as reflection. This labor force has now recognized how important their work is and that they were not necessarily treated as well as they should have been through such a challenging time. With all this in mind, companies may have to reconsider the amount they offer their employees to come back, as paying workers what they are actually worth will probably be the only real way to rectify the labor shortage (some have referred to this as the across-the-board need for the “Great Raise”).
There is one way to summarize how all of the points just so happened to occur at the same time—COVID-19 caused more than a pandemic, it created one of the single greatest moments of reflection we have seen in our lifetime. Reflection about what matters, what we want out of life, the role work plays in our lives, and what we value. That reflection point, along with all of the above factors (and most likely other ones as well), has significantly impacted and created a shift in the labor market. When these points are heard out loud, they are all rational and logical—driving people into such change overnight will no doubt change them too. The question is, are these factors permanent or simply a reflex that will fade away as we fade into a new normal? That will have to be seen in time.
Author: Arran Stewart, CVO and Co-founder of Job.com
Original article found here