Workforce Shortages Got You Down? Time for Better Skills Development
The past few months we've seen a flood of announcements around worker layoffs attributed to a difficult economy. Unfortunately, that probably won’t change for some time still.
While the bulk of the layoffs (and news coverage) are concentrated in the technology sector, other industries like ecommerce, real estate and consumer products are also affected. Many of these industries had been red hot at the peak of the pandemic, and several experts say what we're experiencing is just a normalization of the demand.
But this round of layoffs isn’t like what happened with COVID-19 in 2020 — or what happened during the last recession in 2008 for that matter.
For one, there’s no catastrophic worldwide pandemic or financial collapse that’s driving these moves. Instead, rising inflation and general economic uncertainty have caught up with sectors that navigated 2020 and 2021 relatively unscathed, and a persistent lack of workers is adding to the challenge.
Why Unemployment Isn’t Going Sky High
Even in today's high economic uncertainty, unemployment remains at historic lows, and economists are predicting it will stay that way.
The lack of wiggle room in unemployment is mostly structural. Our workforce dipped by millions of people in 2020, which left many companies short-staffed. The corporate sector — even those very well-funded tech companies — still had thousands of job openings at the beginning of 2022.
We are only just now starting to return to pre-Covid levels in terms for worker availability, and there remains crisis-level workforce shortages in several sectors, including nursing homes and public transit agencies. If you want to be my neighbor and drive for my local public transit agency, they’ll pay for your CDL and give you a $7,500 hiring bonus. Telecom giant Spectrum has thousands of open jobs, even as working-from-home slows down.
Some of those jobs will be filled, even by nontraditional talent. That’s the good news.
The bad news is, even projected layoffs aren’t enough to fill the talent needs of these organizations. Rising interest rates put in place to control inflation won’t be enough to drive a huge swing in unemployment.
If the current economic landscape, erratic market behavior and a still lingering war in Europe can’t shift the figures on unemployment, what will?
Related Article: Increase Retention and Engagement With Internal Mobility
A Fresh Look at Skills Development
Late last month, Harvard Business Review published an article about new tech talent flooding the job market. The authors, Vijay Govindarajan and Anup Srivastava, called out the opportunity that organizations might find to tap a talent pool that has been out of reach for those without the deep recruiting pockets of Silicon Valley tech firms. The opportunity for non-tech sectors to modernize their systems with these talented individuals, they said, is pretty irresistible.
That’s one option for a narrow group of employees and organizations. Another option is taking a fresh look at skills development.
Addressing Employee Needs and Wants with a Digital Workplace
The workplace is getting more and more digital – both in how we work and where we work
Maintaining a Human-Centered Approach During Digital Transformation
When it comes to digital transformation - people drive change, not technology
The Evolution of Employee Recognition
Leveraging the power of appreciation to improve the employee experience
How to Build a More Innovative and Resilient Workplace Culture
What would happen if every member of your team came to work focused on finding solutions and creating better results?
The workforce isn’t going to get significantly larger without major changes. While increases in pay and declining market conditions have pushed us back to a pre-pandemic norm, there are skills gaps everywhere. And it will likely be a feature of our medium-term future.
Maybe it won’t be necessary for this single downturn, but we need to eventually get to the point where we can get work done with the people who are willing and able to work. When layoffs happen in one industry but there are still talent shortages in others, we have to ask ourselves why people and organizations can’t benefit from that shift?
Company-sponsored skills development programs have been effective but somewhat limited. Government- and industry-subsidized education programs have worked, too, but these programs aren't likely to be enough to meet the needs of businesses. Can business and educational institutions take the next steps to integrate development offerings?
Related Article: Mapping Out Your Company's Skills Set
A Broader Conversation About Reskilling
No single entity can solve this problem. The government can only take us so far. Many companies in the learning and development industry have been beating this drum for a long time, and so have I.
Has the conversation about skills finally made it to the big time? I think we are getting closer.
At this point, I don’t think anyone can afford to be picky about solutions. Hiring incentives and increased pay are only a small fraction of this equation. When the people aren’t there, the people aren’t there. Some industries can’t afford to wait much longer without serious repercussions.
At some point, workers will need to be retrained, and we’ll collectively have to take a look at skills in a different way. We’ll need to consider how many skills we’re willing to train for if it means jobs are filled and we have the people we need to meet the goals of organizations — and ultimately, entire industries.