When there is a shortage in labor is sign companies are facing hard to find qualified candidates for open positions. There aren’t enough applicants to fill the jobs they’re hiring for, and the few candidates available aren’t easy to find.
However, labor shortages may be more complex. Some positions are difficult to fill, and certain industries face a greater challenge hiring and keeping employees than other industries.
Here’s what you should be aware of about labor shortages, which sectors and jobs have the highest demand for labor and how a shortage can help your career.
Definition and Example of a Labor Shortage
If the need for workers for a specific occupation exceeds the supply of people who are skilled, ready, available, and willing to work in that field, there is a shortage. The reason for this is demand and supply. Do you have enough employees to meet the needs of an employer? If not, then there’s an issue with the labor market.
When there is a shortage of workers when the pool of labor is small, attracting skilled workers is a challenge to fill open positions. Filing open jobs is more time-consuming, and the retention rate is not great. Employers might have to raise wages and increase benefits packages to draw and keep employees.
- Alternative name manpower shortage occupational shortage
One sector that is suffering from a labor shortage in nursing. Asset and investment management company Mercer’s Healthcare Labor Market report explains that there are 3 million licensed nurses working throughout the U.S. Nurses’ demand is projected to rise by 5% in 5 years. In addition, 1.1 million nurses have been expected to retire or switch careers. If this trend continues, the future could result in an unsatisfactory shortage of around 100,000 nurses across more than half the states of the U.S.
There are a variety of reasons why labor shortages don’t just affect certain occupations or industries. When the economy and job market change in time, the affected sectors will also change as the demand for workers raises or decreases.
Types of Labor Shortages
It’s not just based on the number of jobs available compared to the number of people. It’s complicated due to the numerous factors that influence the hiring process. The training and experience level, skills required by employers for a perfect candidate, and the salary the employer is willing to pay are all factors in whether there’s an employment shortage in a specific sector or job.
The main types of labor shortages are:
- A number of individuals The possibility of labor shortages when there aren’t enough qualified candidates to meet the requirements of an organization.
- Qualities of job applicants If employers have problems finding workers who have the skills they require, There could be a shortage of workers.
Read More: What is an Interview? Types of Interviews
Reasons for Labor Shortages
The reason for the shortage of labor is several elements, such as:
- An aging workforce
- Early retirement
- Health-related concerns
- Workers who leave the labor market
- A decrease in blue-collar workers
- Immigrants are not allowed to be in certain areas.
- Self-employed people who are looking for a job.
- Workers quit their jobs.
- Increased demand for information technology (IT) services
One reason for a shortage is the fact that workers quit their jobs at high rates, while the demand for workers is still high. In September 2021, for instance, 4.4 million U.S. workers quit their jobs–the most ever recorded–but job openings remained stable at 10.4 million.
The effects of labor shortages are also felt in industries that have higher than average rates of resignation. For example, in the year 2021, the Bureau of Labor Statistics (BLS) stated that 867,000 workers in the food service industry left their positions in the month of August 2021. This rate of 6.6 percent was more than twice what the nation’s average was off 2.9 percent. Employers in sectors that are hard hit typically offer incentives for hiring and pay increases to draw and retain employees.
Industries and Occupations With Labor Shortages
The Society for Human Resource Management (SHRM) survey revealed that 73 percent of employers see fewer applications for jobs that are difficult to fill. The most difficult jobs to recruiting, according to SHRM, are hours-based, entry-level and mid-level positions that are non-managerial, particularly in industries like hospitality, manufacturing, food service, and health care.
In the meantime, the non-profit research firm The Conference Board reports that the retention and recruitment of manual and blue-collar workers can be a challenge for employers. There is also a competitive employment market for tech employees.
Labor shortages in comparison to. Jobs Openings
The labor shortages are affecting certain industries more severely than others. While there’s a shortage of workers in certain industries, generally, there are fewer jobs available than before the outbreak. The BLS says that as of October 2021, U.S. employment is still down by almost 4 million people compared to levels prior to the pandemic at the time of February.
Labor shortages in comparison to. Unemployment
Although the market for jobs has lower employment opportunities than in previous years, there are more job openings than are people who are not employed. In April 2020, there were five unemployed people for every job opening. In September 2021, however, there was less than 1 (0.7) worker for every job that was open.
In the exact month in which it was recorded, the number of jobs per month increased to 7.7 million people who were unemployed, 10.4 million job openings and 6.5 million new employees. In the twelve months that ended in September 2021, it was an overall increase in the amount of 5.6 million positions.
While the job market has more opportunities than unemployed workers, not all that are not employed are looking for work, and those who are might not be qualified for the positions that are available.
As the employment market is expected to continue to expand as it does, the possibility of shortages in the affected industries will only grow. To be competitive, employers offer sign-on bonuses plus higher pay as well as a variety of benefits to draw applicants.
How a Labor Shortage Can Benefit Your Career
If you’re on the job market or are considering the possibility of a career shift or career change, a labor shortage could be beneficial to your career and your earnings. It’s more straightforward to find work in a competitive labor market since employers might lower the requirements for hiring and increase salaries to attract candidates.
An Webinkeys employer survey found that 57 percent of employers offer referral bonuses as well as 55% of employers employing temporary or outside employees, while 44 percent are training and upskilling employees and 43% are increasing salaries. According to ADP’s Q3 2021 Workforce Vitality Report that there was an average salary raise of 6.6 percent for those who changed jobs, compared to 2.5 percent for entry-level positions and 4.8 percent for current employee salaries.
If you’re contemplating the possibility of a job and have the qualifications employers are seeking, You’ll be well-placed to succeed in the job market, in which there is a shortage of labor.
A few ways that a shortage of labor could benefit job seekers and change careers include:
- Increase your odds of being hired as employers are cutting the requirements for job seekers for certain positions.
- Employers are hiring faster since they are streamlining the recruitment process to allow new employees to join quickly
- Employers can earn more money when they offer bonuses for hiring as well as retention bonuses and higher wages to draw in prospective employees.
- Learning new abilities and opportunities for growth when companies increase on-the-job training and reskilling programs.
Job Tools Available
If you’re not sure of how to use the abilities you possess to benefit from an employment shortage, or if you don’t know what your credentials are, take a look at the tools that can assist you in getting employed.
For instance, Webinkeys’s Skills Matcher tool will help you find jobs that match your skills. If you’re looking for training to enhance your skills, Use the naukri Training Finder tool to locate the right training and certificates and financial assistance to make the change to a new career.
- If there is a shortage of labor, there aren’t enough people to fill the positions employers are looking for, and it’s difficult to find candidates for open jobs.
- The main reason for labor shortages is when employees leave at high rates and the demand for workers is high.
- The industries that have been the hardest affected by the recent shortage of labor include hospitality, manufacturing, retail, foodservice and health care.
- Being hired in a tight job market may be more straightforward than in other periods because employers can lower their hiring requirements and increase wages to draw prospective applicants.