How will the US labor shortage affect economic recovery?
Currently, 48.6% of Americans are fully vaccinated
Even despite the ramped-up vaccination effort, the shadow of the labor shortage continues to loom over economic recovery.
Job growth has (on average) increased by 540,000 over the past few months; should it continue at that pace, the economy is on track to return to pre-pandemic levels by the end of 2022. That’s five times faster than the economic recovery seen in the Great Recession of 2008-2009.
Despite this, one worrying aspect of the labor shortage needs to be addressed: the mass exodus of women from the workforce. With the prospect of reversing years of the progress becoming a real risk in the near future, organizations need to improve – or risk losing out on talent:
1.8million fewer women are in the labor force than before the pandemic
Earlier this year, my colleague Amber Hayes highlighted the disproportional impact of the pandemic on women and other minorities.
As more families saw their homes transformed into classrooms and offices at the beginning of the pandemic, many working women have been forced to either cut their hours or leave their jobs altogether.
For those still working full-time, childcare costs, wariness about the spread of the virus and general uncertainty stretch working mothers to the edge. Without sufficient support from employers, organizations stand to lose out on massive talent from working mothers – especially as an employment gap of just one year leads to a 39% decrease in annual earnings (something that only increases over time).
Narrowing the gender wage gap with equal opportunities
As it stands, the share of women in the workforce has dropped to levels not seen since 1988. Unfortunately, the problem only persists at the executive level. In CEO and other similar roles, men outnumber women by almost 17 to one.
While it is widely believed that a woman earns just 80 cents for every dollar earned by a man, it understates the true extent of the gender wage gap. When measured by the total earnings over the most recent 15 years (for all workers who worked in at least one year), women workers’ salaries were less than half of men’s earnings – a wage gap of over 51% – or 49 cents to the dollar.
If organizations want to continue to thrive in the aftermath of the pandemic, they need to work harder to ensure every worker is represented in their C-Suite. Without strong women leaders to look up to, you risk alienating a whole generation of potential within your business.
The introduction of flexible talent management
Organizations need to strengthen the labor force participation by women, if they want to avoid missing out on talent in the aftermath of the pandemic. This is critical for both employees – they stand to increase their long-term earnings – and employers (who stand to benefit from increased productivity and motivation) alike.
Over the summer months and beyond, hiring will remain a top priority for organizational growth. In fact, job hiring is projected to return to pre-pandemic levels by the end of the year. And, the talent acquisition process stands to be totally overhauled in line with this.
Thanks to the widespread adoption of flexible working arrangements, organizations are, in turn, opting for flexible talent management. Virtual interviews are set to remain the norm (for the time being, at least), and the acquisition timeline is set only to accelerate further.
Executive search in the face of the labor shortage
Even with the threat of the labor shortage, the demand for jobs is set to increase for the remainder of 2021 and well into 2022. Pair that with the continued organizational shift to a ‘thrive’ mindset, executives are sure to look to executive search partners, to help introduce and improve the diversity and proportion of women and underrepresented talent in the workplace.
Here at Imperium Global, we have a database of over 250,000 under-the-radar candidates who are always looking for their next big opportunity. Utilizing powerful AI and data analytic tools, we always have access to prime candidates before they become available.
Of course, this wouldn’t be possible without our clients, who strive to provide working mothers and those from minority communities with the opportunity to progress within their organizations and their wider career.