Labor Shortages

Labor Shortage

There is an exodus of employees and a loss of institutional knowledge happening at organizations around the globe — and it's shaking up the workplace in ways we haven't seen or prepared for. How organizations react will determine whether this is a long-term trend or just a reset.

Over the last year, many companies have faced a reckoning as large numbers of employees quit their jobs, launching a movement of sorts that Anthony Klotz, professor at Texas A&M University, Texas, USA, named the Great Resignation.

In January 2022, the U.S. Bureau of Labor Statistics announced that 4.5 million Americans left their jobs in November — the highest level since the agency began tracking this data in 2000. The quits rate once again reached 3%, rebounding to a recorded high first set in September of 2021

The Organization for Economic Cooperation and Development (OECD), which includes 38 member countries, found that 20 million fewer people are working now compared to before the pandemic with a slow rebound predicted. A recent survey conducted for the Bertelsmann Foundation reported that 66% of company decision-makers in Germany, Europe's largest economy, said they are currently short of skilled workers, an increase from 2020. In Australia, 40% of employees said they plan to look for a new job within the next six months. And in Singapore, 49% of employees surveyed as part of Microsoft's 2021 Workplace Work Trend Index said they are considering leaving their employers this year.

The period that initiated these rising quits rates can be traced to the onset of the COVID-19 pandemic when millions of employees around the world were laid off or furloughed. In some countries, unemployment benefits and government relief funds provided individuals the opportunity to remain at home for health reasons and to take care of their families. But even now, as vaccination rates increase and organizations begin to normalize working environments, and as more companies offer bonuses and incentives for new employees, millions of positions remain unfilled.

These historic labor shortages are further complicated by the disproportionate marginalization of women, a situation that is exacerbated by inequalities of caretaking and opportunity. At the beginning of the pandemic, workforce sectors with jobs primarily filled by women, such as the hospitality industry, were more at risk. In Latin America, research found that the pandemic stalled progress the region had previously made toward gender equality in the workforce, with 12 million women leaving the regional workforce due to the elimination of jobs.

Even as companies actively seek employees, many women are having trouble resuming or starting new careers. The National Women's Law Center (NWLC) reports that women's labor force participation was just 57.3% in October 2021, the lowest participation rate since 1988. Unemployment rates for Black women and Latinas exceed the figure for women overall.

The pent-up desire to seek a better work experience and greater flexibility is being released as the restrictions brought about by the pandemic recede. This additional factor has organizational leadership questioning how they can retain the employees they have while attracting new talent. To find the answer, leaders must be willing to address the surge of disillusionment felt by many employees about work/life balance, and what they now want from their jobs and the organizations they work for.

With 25 million new project professionals needed by 2030, according to PMI's 2021 Talent Gap report, these labor shortages will only intensify the challenges of delivering projects that are on time, on budget and that meet customer expectations. In the near-term at least, many organizations may experience significant turnover and schedule delays as team members and stakeholders alike leave for new opportunities. If not closely monitored and controlled, quality could decline as the burden put upon remaining team members grows.

While the Great Resignation has not hit home in every part of the world or every industry, the threat of labor shortages and discontented employees looms large. Organizations will need to reset the employer/employee relationship to create a successful retention culture, aligning on social impact initiatives of importance to workers, and providing greater recognition and rewards for employee contributions. It's a shift to the world of work that promises to last for decades to come.

Global Megatrends 2022

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For women, work is not just about making money — it's also how we have a voice, how we have influence, how we grow as humans.

Organizational development consultant,

Helping Women Claim Value: Interview With Susan Coleman, JD, MPA

Susan Coleman is a U.S.-based consultant with over 30 years of experience training and facilitating tens of thousands of people around the world in negotiation and collaborative strategies to build common ground. Her main focus now is empowering women through negotiation.

In Coleman's view, the fact that the COVID-19 pandemic has forced millions of women out of work reinforces some truths about their place in the world. "As long as we are not in the top rung, as long as we are supporting the next one up, people are okay with that. But if we actually had true gender equality, I think there would be a lot of pushback. For women who want to be professionals and also want to be a mom, childcare is key and if there isn't access to good childcare, women are going to drop out," Coleman says.

"While things are much more difficult for women around the world since COVID happened, I don't think that we are going backward. The trend of women entering the workforce has been one of the largest shifts in organizational life for a long time. And women, we are changing things."

Remote work has provided flexibility, but Coleman says, "We are in a big conversation in the world, about whether we are really in this together or whether we choose polarization. One of the fundamental choices you have to make when you negotiate is whether you're doing things collaboratively or competitively. Collaboration is really win-win. For women, it's about building up our awareness of what the skill set is and how to increase our negotiating capacity. With negotiation, a lot of it's about claiming value, receiving value, being asked for what you want."

If you can create a really good working environment that is collaborative, that is really building people's capacity, that's learning, all of these things, you will get the best out of people.

Organizational development consultant,

Reshaping the workplace

Susan Coleman, JD, MPA, organizational development consultant,, U.S. discusses how labor shortages can empower diverse voices to reshape the workplace.

Alleviating labor shortages

Innocentia Mahlangu, Pr Eng, MSc, PMP, senior civil engineer and project manager, Hatch, South Africa, discusses how creating inclusive workplaces can help retain talent and reduce labor shortages.
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