Talk to any business owner in any industry and you'll hear the same story - they can't find enough help. The pandemic has caused a global worker shortage, putting tens of millions of people out of work. What's clear is the worker shortage may not recover anytime soon - and companies may have to adapt with fewer employees and higher demands for pay and flexibility.
According to various economists and business journals the following has permanently affected the job market:
(1) Job Loss
There were 114 million jobs lost worldwide in 2020. According to the Pew Research Center, 15% of adults were laid off or lost their jobs because of the coronavirus outbreak. Even if they didn’t lose a job, many workers reduced their hours or took pay cuts due to the economic fallout from the pandemic.
While the economy is rebounding in 2021 and many businesses have reopened, many employees are re-evaluating their career choices. In the United States, a record 4 million people quit their jobs in April, including 649,000 retail workers. A recent Ernst & Young survey of more than 16,200 employees globally, found that more than half would consider ditching their job after the pandemic if they weren't offered enough flexibility on where and when they work. Many workers have left front-line jobs in some industries for roles that are less exposed to the coronavirus.
(2) Massive Relocation
With the mass movement of people, who left cities as jobs were cut and the perks of urban living evaporated, not everyone has returned. Many students who would typically be hired for hospitality jobs in cities like New York or London are still living at home, while others are weighing permanently moving outside urban centers.
(3) Misplaced workers
Trained workers are stuck in the wrong places, as employees have chosen not to return to jobs. Others have retired early, are skeptical about going back to work in the face of lingering health concerns, or are having difficulty securing reliable child care.
(4) Increases in Start-ups
People are also starting their own businesses. In the United States, 2.5 million new business applications were filed in 2021 as of May. Many displaced employees are turning to owning their own businesses, where they feel they can control their earning potential.
(5) Increased Benefits
Many employees stayed on unemployment benefits or returned to work part time, in order to get the federal and state subsidies. While assistance may dry up soon, companies have been forced to offer more benefits to attract new employees they need now.
Already companies are adapting to shifts in the labor market in order to attract workers. Some of the incentives include:
Flexibility and work/life balance perks
Higher pay
Increased benefits
Sign on bonuses for new employees
The pandemic has fostered bigger shifts in the labor market, as people reconsider what types of jobs they want to hold — and on what terms. All industries are reallocating workers and re-thinking their business models in order to adapt.
