6 Useful Strategies to Survive the Labor Crisis of 2022

The labor crisis of 2022 is in full swing. With the lingering effects of the great resignation and ongoing inflation, workers and employers have yet to meet eye to eye and address today’s labor shortage.

What are the driving forces behind the labor crisis of 2022 and how can businesses cope and survive as the post-pandemic workforce keeps evolving? Read along to discover strategies that can help your business survive.

COVID-19 and The Great Resignation

April of 2021 saw a record high of 4 million resignations among American workers. This was followed by another 20 million resignations during the latter half of the year, with November seeing the highest at 4.5 million in a month. The Great Resignation now continues in 2022 as one in five workers has plans to quit within the year. 

COVID-19 has forced the global business community to make adjustments, introducing new ways to work for everyone. As such, the demands of workers have also evolved and are a huge factor for businesses that want to recover in the post-pandemic era.

The Labor Crisis of 2022

From a shortage of available jobs to now a shortage of workers willing to be employed, the effects of the COVID-19 pandemic continue to affect American businesses.

Because of the coronavirus outbreak, businesses had to close or scale down operations, raising the unemployment rate to 15% in March of 2020. Unemployment eventually declined to 6% in 2021 and returned to pre-pandemic levels by July of 2022. The initial decline was thanks in part to stimulus checks aimed at helping American businesses. 

The problem lies in the fact that the labor force has three million fewer participants compared to February of 2020. Job openings were almost double the number of available workers by May 2022. In a recent report, there were only 6 million unemployed workers to fill in the 10 million job openings in the U.S.

Factors Causing the Labor Crisis of 2022

The numbers clearly show that America is facing a labor crisis in 2022. Before strategizing how to fill the talent gaps in your business, it’s important to understand the forces driving the talent shortage. Here are commonly cited reasons for low labor force participation according to industry experts.

Savings

Up to 68% of unemployment claimants gained more from being unemployed in the pandemic compared to having jobs before. 

While the larger part of the almost $4 trillion of savings from Covid lockdowns and stimulus checks went to the wealthy, a generous portion of Americans still gained enough economic stability to be confident in staying out of the labor force.

Retiring Boomers

The older generation of the workforce were large contributors to The Great Resignation. Adults 55 and older continue to leave the American labor force even after the Covid-19 vaccines have been rolled out.

Baby Boomers comprise up to 24% of the American labor force, making their decision for early retirement an impactful one on the business community.

The Rise of Entrepreneurship

The pre-pandemic state of entrepreneurship, changes in work preference during the pandemic, and tech advancements all contributed to the rise of entrepreneurship in recent years.

Not only did this mean more employees left the labor force and became entrepreneurs, but the creation of new jobs also skews the ratio of available jobs to available workers.

The Great Reshuffle

Reports have cited the great resignation to have evolved into the great reshuffle. While workers quit en masse, they don’t necessarily leave the labor force.

Those who have chosen to stay simply shifted to other fields or employers that offer better benefits or more agreeable working conditions. While the hospitality and healthcare industries suffered from the highest resignation rates, employment in software and IT services surged.

Hiring Barriers

Baby Boomers who leave the labor force aren’t always easily replaceable with talent from the younger generation. They’ll need time and training to be able to fill in a position that had someone with decades of experience.

Some of today’s job vacancies need people who have the qualifications to replace someone with years of experience and not everyone has that. There are willing participants in the labor force who simply don’t have the requisites for a lot of vacancies.

There’s a challenge in finding a solution to fill vacancies left by the older generation with younger workers who won’t have the same background or qualifications.

Changing Employee Needs

In a research conducted by Microsoft, they found that while 65% of employees still want in-person time for collaboration, a greater 70% demand flexible remote work options.

Almost 50% of workers also desire more opportunities to grow in their careers, with 38% actually feeling held back by the pandemic. These factors are among the top labor market pressures that businesses need to address.

Burned Out Millennials

Career stagnation among millennials contributed to the sense of burnout that they’ve been feeling even before the pandemic. 

With lockdown measures lifted, vaccines rolled out, and their savings from the pandemic, members of the millennial generation choose to take a break from participating in the labor force.

6 Strategies to Survive The Labor Crisis of 2022

So how can your business cope to survive the labor crisis of 2022? Here are a few ways your business can adapt to changing times.

1. Allow More Flexibility

Employee demands have changed and businesses have to adapt. If you don’t act on this quickly, you could get the short end of the stick.

As the demand for remote work increases, businesses are becoming more agreeable when it comes to allowing hybrid work arrangements.

If your business really needs people to be present, perhaps change something in how you build your employee schedule. Allowing your employees to commit to a schedule that they agreed on encourages them to be more efficient and accountable in managing their time around their schedule.

While work-life balance may be a persistent challenge to employees, it’s important to consider and listen to their demands. This can be your key to creating an attractive job offer and lowering attrition in your company during the labor crisis of 2022.

2. Be Better at Recruitment

Getting creative and strategic with your recruitment strategy can help you find the employees your company needs faster.

Spending more time in finding the right places to promote your vacancies can reward you with more applicants and a shorter hiring process.

The same goes if you hire a virtual assistant for recruitment. An inexpensive solution for any business, virtual assistants (VA) for recruitment can help you find reliable talent faster, saving your business and your time.

Make sure to get their help in creating attractive vacancy promotions, screening and searching for talent, and writing impressive job descriptions.

Referrals can also work for your business so don’t forget to consider incentivizing a referral program for your employees.

3. Find Partnerships

Did you know that you can find partnerships for employment? You can reach out to schools, universities, local communities, and grassroots movements to find talent for your company.

You can get more creative with how you do this, but a common approach is to offer free training or workshops for those who agree to join your team. This can be highly rewarding when you find a niche community that aligns with your business's core values and needs.

4. Automate Non-Core Tasks

Investing in technology is a common practice in the age of digital business transformation. One valuable benefit is that you can automate non-core tasks for your employees.

Automation can not only help your current employees to work more efficiently, but it can also free up their time, decrease their workload, and make work a happier experience for everyone.

Implementing automation in your business processes eliminates small tasks that otherwise take up large amounts of your staff’s time. Not only does this improve productivity, but it can even decrease the pressure to find more people for your team as the labor crisis of 2022 goes on.

5. Add More Benefits

If your budget allows you to offer competitive wages, that’s probably what you should do. If not, you can get creative with the other benefits to offer your future employees.

Finding ways to make employees feel valued is important in today’s talent economy. If you can’t increase everyone’s wages, you can introduce more performance-based or revenue-based incentives. 

Opportunities to learn and progress in their career are also valuable, as well as engagement activities that your demographic of employees truly enjoy.

Spending some time to learn about what your employees want aside from higher pay can help make your vacancy more attractive to applicants.

6. Outsource to Virtual Assistants

If your business includes a lot of tasks that can be handled remotely, you can outsource the work to virtual assistants. Known for being a cost-efficient solution for small businesses and enterprise-level organizations, outsourcing to VAs can help fill gaps in your organization.

While most hire VAs to trim the fat of admin tasks for the rest of their teams, there are specialized virtual assistants who can help you in marketing, prospecting, recruitment, customer service, and other business areas.

Bottom Line

Without enough people in the labor force, the economy will also struggle to recover from the effects of the pandemic. The labor crisis of 2022 can eventually worsen inflation as businesses remain understaffed.

If talent shortage is a problem in your company, always consider what can be automated and what can be outsourced to remote workers. Automation lowers the demand for more people, and outsourcing to virtual assistants has been working since before the pandemic.

If you’d like to start working with a virtual assistant from a company you can trust, contact Virtudesk by filling out this form, so one of our Consultants can get in touch with you.

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