Lauren Saidel-Baker is an experienced speaker and economist. She graduated cum laude with honors in economics and a double major in religion from Wellesley College. Her experience in finance supports her commanding grasp of ITR Economics' programs and subscriptions and their practical applications.
The tight labor market remains one of the toughest challenges currently facing US businesses. The US Unemployment Rate stands at 4.4%, which essentially represents a country at full employment. Another factor contributing to the scarcity of workers stems from a pandemic-related drop in the Labor Force Participation Rate, or the share of the population that is either working or actively searching for work. In January, the Participation Rate came in at 61.9%. While this figure was 1.9 percentage points above the April 2020 low, it is still slightly below the pre-pandemic level.
The resulting dearth of workers has important implications for businesses that are looking to hire. In this environment – with job openings outnumbering job seekers – there are not conventional unemployed workers on the sidelines to attract. Instead, businesses must attract potential hires away from whatever other thing they are currently doing – whether that is a different job or something outside the labor force altogether.
This unique labor market will require creative solutions. Here are a few that have helped some of our clients:
- Seek out nontraditional employees. Evaluate your local labor market and identify groups that are disproportionately unemployed or under-employed. Consider a reentry program for the formerly incarcerated or a program targeting differently-abled employees – such as those with autism.
- Re-evaluate your hiring requirements. In many fields, a traditional four-year college degree is no longer a requisite. In fact, in-house training can provide more targeted and effective instruction. Instead of seeking a candidate with a degree, look for those that exhibit soft skills – which are harder to teach. For some firms, English-language requirements may not be necessary.
- Offer flexibility. Understand that some potential employees have nonnegotiable personal priorities. Seek to accommodate them. Perhaps a new production shift could be fit to school hours so that parents can get their kids out the door in the morning and be home in time to meet the school bus. In some cases, flexible hours or remote work arrangements will attract employees who would not be seeking work otherwise.
- Fill the pipeline. Consider initiating a partnership with local schools through which you can provide training or internships to students. When those individuals graduate, they will be trained in the specific skills your firm needs, and they will have benefited from the educational opportunities provided.
For many companies, the ideal candidate today will look different than the ideal candidate during prior economic cycles. Firms that "think outside the box” will inevitably find some incredible new people, and they will stay ahead of the still-tight labor market.