Overcoming the Leadership Gap Part 5: The Shrinking Labor Force and Where to go From Here
A few weeks ago the Bureau of Labor Statistics released their monthly report of the Employment Situation for April 2021 and the report aligns with some of what we have seen that is contributing to the leadership skills gap – a shrinking labor force that makes it more difficult to find high potential candidates. The unemployment rate remained almost unchanged at 6.1%, but there still seems to be a shortage of workers for all of the open positions. So, while the conversation about opening, and reopening job requisitions seems to be fresh and coming to the top of priority lists, the labor supply has not yet caught up with the demand.
With the decline of job numbers from the March report, there is increased focus on the pace of recovery, and there are still a mountain of 8 million jobs to climb back up to reach the level of jobs in the economy pre-pandemic. There are even predictions that taking April’s numbers and rate of growth into account, we may not be able to crest that 8 million job mountain until well into 2023. As we have discussed throughout this series, no one factor can be contributed or analyzed in a vacuum. Workers are still facing uncertainty around childcare, schools, health concerns, unemployment insurance, or even wage rates in general.
Looking at some historical data, we can also see the shrinking labor force continuing to be an issue. The Labor Force Participation rate for April 2021 is 61.7%, still well below the January 2020 63.4% rate, with the trajectory of growth trending upwards as it has been since April 2015. For those that are part of the most recent numbers, and even thinking about the hopeful growth of that percentage over the coming months, the challenge becomes , attracting and hiring the top tier candidates for open positions.
Not only do we have to consider that the labor market is tight, but also that candidates are moving through interview processes quickly. While the introduction of virtual interviewing has certainly expedited the overall hiring process, candidates are expecting quick responses to identify next steps as they may be managing 2-3 company interviews at a time. Being prompt with feedback, especially candidates for hard to fill positions, is essential to the process and can help candidates feel engaged and invested in your hiring process.
With the supply of candidates being a concern, and the availability of high caliber candidates limited, the search efforts to find the right fit for an open role can be a process. The push to fill an open seat, especially one that may be revenue generating on a contract or in a sales role, can weigh on the minds of decision makers. Being able to trust in a process, provide feedback throughout each step, setting expectations early on for profile fit, and being open to new ideas are all areas to keep in mind during today’s recruiting environment.
Throughout our series on the leadership skills gap, we have identified some ideas that may be good to consider in today’s environment to find and access those high potential employees:
Outline a succession plan, skills assessment, and staffing plan to account for upcoming retirements and how the roles are shifting to bring in the most recent generation of workers.
Determine if opening roles to allow for part-time work or temporary projects makes sense to access the skills needed for the business to reach goals or milestones.
Harness an employee’s entrepreneurial motivations by incorporating mission driven purpose into daily work and tying company goals to individual goals.
Tap into those looking for autonomy by providing an opportunity to lead other initiatives than people or staff – including products, process, and projects.
We hope that this series provided some ideas to mull over as you look towards June rounding out the second quarter of the year, identifying positive goals for the second half of 2021, and as you consider hiring your next great team member.