It’s no secret that the US has been struggling with a Labor Shortage and competition for good talent is at an all-time high. Declining labor force participation rates, The Great Depression, and The Great Resignation have all contributed to major disruptions to the Labor Force in the 21st Century.
Labor participation Rate Fall
Since the early 2000’s, there has been a dramatic reduction in the US labor force participation rate. In January 2001, 67.2% of Americans between the age of 15-65 were employed and that number steadily declined until bottoming out in March of 2020 when that number was only 60.8%. Whether it’s because more baby boomers have entered the era of retirement or because people are simply making lifestyle changes, there has been a growing number of workers exiting the workforce and we have lost valuable knowledge and skills.
The Great Recession
During 2007 –2010, the most severe economic downturn happened since the Great Depression of the 1930’s. The US economy broke, and unemployment topped 10%. This was nearly 9 million people (about half the population of New York) lost their jobs. It was a slow comeback to getting our economy back on track, but by 2017 unemployment rates had fallen to 4.1%. Jobs were permanently eliminated which left workers scrambling to learn new skills and find new work opportunities. While the Great Recession made it easier for business to hire quality talent
The Great Resignation
At the start of the COVID pandemic, unemployment rates topped 14%. These rates had not been seen in over 50 years. For years, we experienced an employer driven labor market. This all changed in the Spring of 2021, when we began to see the pendulum swing and workers started leaving their jobs in the search for greener pastures. In 2022, over 50 million people (about twice the population of Texas) quit their jobs in search of work life balance, flexibility, a better work culture and increased compensation. Perhaps it was long-term job dissatisfaction or lack of career advancement, but The Great Resignation only compounded the challenges businesses faced hiring qualified talent.
What will be the next big workforce disruption?
Whether the fall of an economy, a pandemic or people reshaping their lifestyles, it’s only a matter of time before the next major event leaves us all re-strategizing on how to hire great talent. Artificial Intelligence (AI) is making great strides and will reinvent the way we work and who we hire. We’ve already started to see a shift where AI has begun eliminating repetitive\mundane jobs, but it is also creating new opportunities. AI may be the dawn of a new age, but how we choose to use it and pivot to up-skill displaced workers will determine our future successes.