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Why We Are Entering A Secular Labor Shortage

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Summary

The US Bureau of Labor Statistics (BLS) recently released a ten-year forecast for the US labor market, which projects low employment growth and a decrease in labor participation due to low birth rates and longer lifespans. This will lead to a secular labor shortage, meaning a long-term trend of difficulty in hiring. To address this, companies must invest in internal development, talent mobility, and career pathways. In addition, employee productivity and the overall employee experience must be improved, and organizations must change the way they think about employees as trusted assets rather than replaceable parts. These concepts will be explored further in October with the announcement of the “Post-Industrial Economy” research agenda.

Q&As

What does "secular" mean in the context of the labor market?
In the context of the labor market, "secular" means of or relating to a long term of indefinite duration.

What does the BLS forecast predict for total US employment growth and labor participation rate?
The BLS forecast predicts total US employment growth will only average .3% over the coming decade and the labor participation rate will drop from 62.2% to 60.4%.

How can the labor shortage be solved?
The labor shortage can be solved by automation, AI, and organizational ingenuities.

What implications does the labor shortage have for employees and organizations?
The labor shortage has implications for employees and organizations such as employees having more agency and power, companies having to double their efforts to improve employee productivity and the overall employee experience, and companies having to rethink their HR and leadership practices in a fundamental way.

What new strategies and models of leadership are needed to address this "secular" labor shortage?
New strategies and models of leadership needed to address this "secular" labor shortage include investments in pay, inclusion, training, and sound management, as well as rethinking companies as "pools of labor" and considering people as trusted assets.

AI Comments

👍 This article provides a great overview of the secular labor shortage and the implications it has on our economy. It is well-researched and provides a comprehensive understanding of the situation.

👎 This article does not provide any practical solutions to the labor shortage, instead it just acknowledges the problem and suggests further research on the issue.

AI Discussion

Me: It's about the implications of entering a secular labor shortage. There are lots of economists expecting the labor market to cool, but it's still hard to hire. We're in a low birth-rate country, and as our longevity goes up, many of us are slowing down and stopping working. This means there will be a labor shortage in the future.

Friend: Wow, that's a really concerning trend. What are the implications?

Me: The article talks about how GDP is expected to rise despite this labor shortage, but that means companies have to spend more effort on internal development, talent mobility, and career pathways for existing staff. There's also a need to double our efforts to improve employee productivity and the overall employee experience. Employees will also have more agency and power, and companies will need to rethink their HR practices. Finally, the two sectors that will dominate in the future are healthcare and those in mathematics, science, and computing.

Action items

Research the World Bank analysis to understand the peak year for labor by country.
Invest in automation, AI, and organizational ingenuities to increase productivity and the overall employee experience.
Develop internal development, talent mobility, and career pathways for existing staff to address the labor shortage.

Technical terms

Secular: Of or relating to a long term of indefinite duration.
BLS: Bureau of Labor Statistics.
GDP: Gross Domestic Product.
Labor Participation Rate: The percentage of the population that is actively employed or actively seeking employment.
Demographics: The statistical characteristics of a population, such as age, gender, education level, income level, and occupation.
Low Birth Rate: A birth rate that is lower than the average rate for a given population.
Longevity: The length of time that a person or thing exists.
Automation: The use of technology to automate processes and tasks.
AI: Artificial Intelligence.
Organizational Ingenuities: Innovative solutions to organizational problems.
Time-to-Hire: The amount of time it takes to fill a job opening.
Union Activities: Collective activities undertaken by a group of workers to improve their working conditions.
MS Viva: Microsoft’s suite of employee experience products.
Employee Experience: The overall experience of an employee in the workplace.
Post-Industrial Economy: An economy that is based on knowledge and information rather than on manufacturing and production.