It’s been five years since the COVID-19 pandemic disrupted the workforce, but the U.S. is still seeing a talent shortage as the demand for workers exceeds the working population. According to SHRM Business, the U.S. labor market has consistently had more job openings than unemployed workers since March 2018.  

So what’s causing this labor shortage?  

One major factor: the broader U.S. economy remains strong, which causes a high demand for workers..  

This has created a competitive landscape where employers are trying to attract and retain workers to prevent disruptions to service or production. 

In this blog, we’ll explore the labor shortage in the U.S. and discuss five strategies employers can use to address it. 

A Closer Look at the Labor Shortage 

 It is not just a few industries that are facing a shortage of talent. According to the U.S. Chamber of Commerce, the health care industry falls far below the national unemployment rate. In the next decade, the U.S. is expected to have an average of 193,000 job openings, but only 177,400  nurses entering the workforce. 

 Industries such as hospitality, food services, and transportation rely heavily on in-person work. As a result, they experience some of the highest quit rates. In fact, the leisure and hospitality sector leads with a quit rate of 4.1%. Employees who are required to work on-site full-time are generally more likely to leave their jobs, which contributes to the labor shortage. 

 In addition to a high demand for workers, population aging has directly affected the labor shortage. This contributes to there being more job openings than unemployed people. 

5 Ways Employers Can Address Labor Shortages Affecting Their Industry 

As employers continue to deal with this ongoing labor shortage, it’s important to understand the steps that can be taken to overcome these challenges. Here are five effective strategies you can use to minimize the impact of the talent shortage: 

 1. Use Contingent Staffing 

Contingent workers are employees who are hired on a temporary or non-permanent basis. They can often fill temporary skill gaps. According to the U.S. Bureau of Labor Statistics, 80% of employers use contingent staffing. By using a staffing partner, your HR team does not have to spend time on tedious tasks like onboarding paperwork or payrolling. 

When choosing a vendor to use for contingent staffing, you must ensure that it is the right fit. There are many different factors when using contingent staffing, but it is extremely important that you yield high-quality workers. Acara has been a trusted source for contingent staffing as we have successfully sourced thousands of highly-skilled workers for our customers. 

2. Offer Competitive Compensation 

As the labor shortage drives a highly competitive hiring market, it’s more important than ever to position your company as an attractive choice for candidates. 

By offering competitive compensation, you position your company to attract high-quality candidates who are motivated and skilled. When your pay and benefits align with or exceed industry standards, it sends a clear message that you value your team and recognize their contributions. 

3. Upskill Your Team 

Training and developing your existing workforce is another key to overcoming the labor shortage. 

 By growing your talent internally, you not only build a more loyal and engaged workforce, but also gain the flexibility to cross-train employees across multiple roles. This allows team members to develop new skills and ensures your organization is better prepared to adapt to shifting business needs or fill gaps quickly. 

 The Cleantech industry, for example, has required companies to react quickly as the roles needed have changed. Construction workers, electricians, and engineers can easily shift into a cleantech role with very minimal training. This helps meet demand, as a 2024 McKinsey report found that the global cleantech industry will need an additional 1.5 million workers.  

4. Give Employees a Voice 

In the last decade, employees’ ideals have shifted as workers expect more out of their employers.  Employees want to be heard and their mental health to be prioritized, among other things. By proving that your company meets these employee ideologies, you can keep good employees.  

 This approach directly addresses the labor shortage by building trust with your employees. When you listen to their feedback and make meaningful changes that benefit them, it shows you value their input and well-being.  

 That kind of trust leads to stronger retention, higher morale, and a reputation with prospective talent as an employer who truly cares. 

5. Prioritize Work-Life Balance 

Work-life balance is achieved when employees can equally prioritize the demands of the job with the demands of their personal life. This can help prevent burnout among your workers and increase productivity.  

Similar to giving your employees a voice, prioritizing work-life balance helps address the labor shortage. Being able to provide examples of how your organization supports employees’ physical and mental well-being will help you land talent and not have to battle the labor shortage. 

Consider adding a remote or hybrid work plan. Giving employees flexibility to work outside the office will encourage a better work-life balance. 

 This prevents you from having to search for talent, therefore helping address the talent shortage. 

Conclusion 

The labor shortage continues to challenge businesses across the U.S. But there are steps you can take to minimize the impact of this shortage and prevent any disruptions to your work. 

Addressing talent gaps by upskilling your team or hiring contingent workers, positioning yourself as an ideal employer for top talent, and adopting strategies to retain your current talent will help you stay successful as these challenges continue.  

If your organization is feeling the strain, Acara can help. Through Contingent staffing solutions, we can connect you with qualified candidates. Contact us to learn more.