As U.S. economic growth continues, industries from transportation, dining, housing, and manufacturing are adapting quickly to scale their operations up to pre-pandemic levels. But labor shortages driven by the pandemic are a fast-growing challenge for companies looking to meet rising customer demand.
Today, there are approximately 4.6 million workers missing from the labor force due to employer shutdowns or cutbacks driven by COVID-19, according to the U.S. Bureau of Labor Statistics. Here in Spokane, we have seen a 66% increase in the number of job postings from 2020 to 2021.
The good news is that businesses can expect an increase in available workers in coming months, as those sidelined by COVID-19 begin to reemerge. But labor shortages are expected to be a persistent challenge. Now is the time to plan for this new world of work, which includes hybrid schedules, wage growth, training, and other critical priorities like workplace safety and diversity, equity, and inclusion.
Following are five steps Spokane companies can take to rebuild their workforces and maximize success.
Listen to the needs of your talent. The pandemic has permanently shifted how we prefer to work, and which benefits we find most important. According to a Morning Consult survey, 39% of workers and half (49%) of millennial and Gen Z employees would consider quitting if their employers weren’t flexible about remote work. Likewise, workers are demanding more from their employers and the facilities they work in with respect to worker safety, health, and well-being.
Employers should engage employees at all levels in return-to-work policies and decisions, so approaches are rooted in their preferences. Key areas to consider include more flexible working policies, enhanced benefits for working parents and caregivers, extended paid leave, and safeguards to ensure work-life balance. Hold ongoing listening sessions, including through surveys and one-on-one conversations, to keep a pulse on employee concerns. Proactively and transparently communicate all decisions and be prepared to adjust policies as needs and circumstances change.
Prioritize skills assessments and trainings. BofA Global Research estimates that approximately 700,000 workers left the labor force due to a skills mismatch. Combined with record disruption driven by the pandemic, reskilling and upskilling the workforce is paramount.
To start, employers should assess how an employee’s job may have changed during the pandemic. Then, invest in ongoing training for employees to boost learning and address expertise gaps. Perhaps it’s a new training in artificial intelligence or robotics for workers seeing fast disruption in their field, like manufacturing, or a rotational program that enables corporate employees to learn about other areas of the firm. Companies today have a critical opportunity to use the best of corporate America’s resources to equip workers with the skills, technologies, and mindsets to succeed.
Keep pace with wage growth. A smaller pool of workers combined with strong labor demand is fueling wage growth, and the greatest wage lifts are being seen in roles that experienced the highest demand during the pandemic. Average annual salaries stood at $50,150 in April 2021, up from a low of $47,400 last year, according to Revelio Labs.
In today’s war for talent, employers must ensure their wages are competitive and in line with a growing economy. Important steps include conducting regular industry benchmarking, reviewing benefits and salary growth plans, and performing companywide audits to uncover and address pay inequities.
Support financial (and overall) wellness. According to Bank of America’s latest Workplace Benefits Report, 62% of employers feel “extreme responsibility” for employees’ financial wellness, up from 13% in 2013. Still, only 49% of employees say they feel financially well today, down from 61% two years ago. This comes as COVID-19 produced significant new financial challenges for Americans to weather.
In a post-pandemic environment, employers must reimagine approaches to financial wellness. To start, ensure any program addresses common employee challenges that go beyond retirement, such as rebuilding savings, emergency funds and health care costs. Acknowledge that needs may differ based on gender and age, and think about wellness more holistically, recognizing the interconnected nature of financial, physical, and mental wellness.
Champion diversity, equity, and inclusion. The pandemic and racial injustice movements have brought DE&I awareness to an all-time high. Employers agree that offering meaningful DE&I programs is critical to attract and retain talent. Studies have also shown that a more diverse workforce leads to better financial performance.
To attract a new generation of socially minded employees, employers need to “walk the talk” on DE&I with new and expanded initiatives, measurable goals, and clear action. Key steps include empowering employees to be part of DE&I workplace programs and discussions, setting near and long-term goals and proactively communicating a roadmap to achieve them, and implementing DE&I into your company’s broader corporate strategy.
As workplaces continue to think about reopening plans, and as the fight for talent continues, putting these proactive practices in place will go far in helping companies ensure they have a talented, diverse, and productive workforce that can launch them to success.
Kurt Walsdorf is the Pacific Northwest Region executive of business banking and President of Bank of America
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