With the markets beginning to recover and production levels slowly starting to return to pre-pandemic levels, companies are faced with another difficulty: the continued ongoing shortage of workers.

The talent shortage is being caused by a variety of international economic variables as well as regional, industry and job-specific difficulties. Though you’re probably wondering how long is this going to last? 

We’ll take a look at some of the main causes of the shortage, whether it is set to continue, and reveal that companies may need to rely on executive recruitment to combat these problems.

What is a Labour Shortage?

A labour shortage often arises when there aren’t enough candidates available to enter the job market and meet the demand of employers. Whilst employers are having a difficult time recruiting qualified applicants for available job openings. 

The Factors Causing The Labour Shortages

While the shortage of current labour varies by location and sector, there is no question this is a challenge we are all facing. It’s complicated because of the different factors that impact hiring. Job applicants’ training and experience level, the qualifications the employer requires in the ideal candidate, and the wages an employer is willing to pay are just some of the factors that determine whether there is a shortage of staff in a particular industry or occupation.

Below we look at some of the factors that are contributing to the labour shortage.

1. COVID-19

The most obvious factor is, of course, the global pandemic. Not only did this create pandemic-related issues from millions of deceased to others dealing with the long-term effects of the virus.

Despite the obvious significant disruptions this factor has caused to workplaces, employers and employees are facing a number of challenges as a result of the pandemic, including:

Mental Health Issues

In the early stages of the pandemic, mental health professionals started to express concerns about the impact it was having on workers’ mental health. It appears these concerns are coming to light as The U.K.’s Office of National Statistics reported that one-half of the over 400,000 employees who left the workforce between the time of February 2020 and November 2021 was a result of suffering from long-term mental health issues.

Expectations Shift

Many workers endured additional stressors during the pandemic, including lockdowns and sudden layoffs, in addition to incredibly difficult personal tasks like homeschooling and caring for their elderly parents. Workers’ expectations have changed as a result of these pressures. Keeping a healthy work-life balance is at the forefront of these demands. Today’s workers want more flexibility in the form of remote work choices, flexible schedules, more paid vacation days, and more freedom to choose their own schedules.

Additionally, some employees are prepared to move employment in order to get the flexibility they want or to quit their positions completely if they can’t. In fact, recent research by Monster found that 92% of workers would be prepared to switch sectors if necessary, and 95% of workers are open to changing employment.

Living Costs and Low Wages

If employers aren’t leaving their jobs, they are looking for better job opportunities and switching employment as soon as something better presents itself. And even seeing relocations in search of better pay.

With the rising cost of living continually increasing, loyalty towards employers is decreasing as pay increases don’t appear to be enough to cover the rise in costs. And so for workers in certain sectors increased salaries are ever more important. 

Whether effects bought by COVID or increased expectations by workers, there has been a rise in focus on enhanced benefits as part of the overall employee package, with competitive salaries not being the only factor workers want.

Age Is Just A Number?

Generally speaking, the quality of living has improved and keeps improving. This means we are faced with an ageing population which is affecting the labour shortage. We’ve seen the average age for retirement shift over the years, and so has the increased number of people retiring each day.

Over the upcoming decades, we are expected to see the ageing population increase. Whilst we are seeing this increase, we’re experiencing a decrease in numerous countries’ birth rates falling. This combination will result in fewer people available to work and fill the roles of those retiring. 

The Gap Continues

Following on from the last point, people retiring from the industry or sector they were in leaves a loss of skills and experience. Though this isn’t the only factor contributing to a skills shortage. Technology has been increasing over the years, but with the pandemic, it has intensified and we’ve seen an increase in emerging technologies that help streamline business processes and improve workplace efficiencies. Whilst this is great for those on the receiving end that benefit from this technology, it does require workers with the skills to operate it. The demand for automation in the workplace increases the need for companies to acquire the right tech-related skills, but there aren’t necessarily enough workers to cover this demand.

The Impact It Is Going To Have

The shortage of staff in companies doesn’t look set to disappear anytime soon. Whilst we are bound to continue to hear the phrase ‘because of COVID’ for a little longer, some of the factors resulting in a shortage of staff available aren’t just ‘beacuse of COVID’.

This is a longer-term challenge that will test and affect companies over time, though having a better understanding of what those causes are can help your company overcome them. Gaining help in sourcing your next talent could be the make or break of your company’s growth, and executive recruitment can support with that.