Businesses Struggle To Find Qualified Workers After U.S. Economy Reopens

While already challenging before the pandemic, the rapid reopening of the U.S. economy and the resulting increase in demand for workers has made it harder for businesses to find qualified employees. A survey by The Conference Board, conducted in April 2021, found that 80 percent of organizations hiring mostly industry and manual services workers report difficulty finding qualified workers, with 25 percent reporting that it is very difficult. This compares to 74 percent having difficulty prior to the pandemic, and only four percent reporting it was very difficult.

Retaining workers is also a challenge today. Forty-nine percent of organizations with mostly industry and manual services workers report that it is somewhat or very difficult to retain workers, up from 30 percent before the pandemic. Among those employing professional and office workers, 28 percent report difficulty retaining workers, up from 23 percent before the pandemic.

“Before the pandemic, industry and manual services workers were high in demand and short in supply. While this changed at the onset of the pandemic, as the economy reopens this trend is resurfacing—and fast,” says Frank Steemers, report co-author and senior economist at The Conference Board. “This poses a growing challenge to companies that are looking to attract and retain this cohort of the U.S. workforce. On the flip side, it bodes well for the workers themselves, accelerating wage growth and offering more employment opportunities.”

The Conference Board points to four main challenges for human resources departments in the months ahead: recruiting qualified workers and retaining existing ones, adjusting to a world where a large share of employees work primarily remotely, addressing deteriorating employee well-being and managing the return to the workplace.

Workplaces are likely to be emptier and more diffused as remote work remains the norm, post-pandemic. The Conference Board expects that the remote work boom is here to stay. Nearly 40 percent of human capital executives said that they expect a significant number of their employees—40 percent or more—will still work primarily remotely one year after COVID-19 subsides. This figure has doubled since the April 2020 survey, when only 19 percent of respondents expected the same. Pre-pandemic, most organizations—nearly 75 percent—had fewer than 10 percent of employees who primarily worked remotely.

Increased productivity during the pandemic appears to have come at a significant cost to employee well-being. Nearly 60 percent of companies reported that productivity increased in their organization over the past year, yet the upswing in productivity and working hours have taken a toll. The survey found that 76 percent of respondents said that they had seen an increase in employees identifying as burned out, 72 percent said that more employees had sought mental health support, 60 percent said the number of vacation days used decreased and 55 percent reported a decrease in work-life balance.

“During the pandemic, employees were often working longer hours in crisis conditions. While that may have boosted productivity, that level of performance is most likely unsustainable. Deteriorated levels of employee well-being are also likely related to increased anxiety and stress resulting from multiple factors, such as the global health crisis, the economic crisis and the lack of childcare,” says Robin Erickson, PhD, report co-author and principal researcher at The Conference Board. “As some of these situations are resolved or stabilized and organizations make long-term decisions about a future with more remote work, they will need to continuously monitor their employee experience and holistic well-being.”

A “hybrid model”—part in office, part remote—is expected to gain steam as workplaces reopen. More than 70 percent of surveyed organizations plan to reopen their workplaces in the next six months—May through October. Most of that will take place in the fall, with 50 percent saying that they plan to open back up between August and October. More than 40 percent of respondents expect their organization to sponsor a hybrid workforce where returning will be required for some and voluntary for others.

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