There is a labor shortage. What will you do?

by | Jun 1, 2021 | Effective Teams, Leadership, Strategy

EMSI recently published “The Demographic Drought: How the approaching sansdemic will transform the labor market for the rest of our lives?” This fascinating report details the decline of the US labor market and provides some recommendations for organizations. EMSI breaks down the word “sansdemic” meaning “sans-without, demic-people.” This reports states:

“A talent deficit of over 6 million Americans within the next seven years threatens not just colleges and companies but our common way of life. Losing people means losing many of the goods and services and standards of living we have grown to expect.” (p. 39)

The reasons for this decline in available labor includes:

  • Lower birth rates
  • Retiring baby boomers
  • Low labor participation of prime-age Americans

EMSI concluded the report with: “Every student, every employee, every potential employee is valuable” (p. 39). 

What can organizations do to address the growing labor shortage? 

  • Employee retention should be a key strategy for all organizations. How is your organization intentionally working to retain employees?
  • Provide flexible schedules for employees. Many baby boomers are interested in working, but they do not want a full time commitment. Younger members of the workforce are also interested in flexible, part time schedules. How can your organization accommodate the desire for flexibility? 
  • Offer parental leave and benefit programs for new parents. What benefits are offered by your organization to new parents? 
  • Utilize technology and automation to maximize efficiency and reduce the number of employees needed. What jobs can be filled by artificial intelligence, automation, and technology? 
  • Evaluate low wage positions. It is possible that the labor shortage will cause companies to raise wages or reconsider staffing arrangements. 
  • Embrace diversity, equity and inclusion by expanding the pool for potential employees. Are there demographics your organization should consider targeting for recruitment?
  • Invest in your current workforce by providing training that will allow employees to move into new roles. What partnerships are available with higher education and external consultants to improve job skills?

After writing an initial draft of the blog, I shared the above suggestions with some business leaders. Both leaders emphasized the importance of a positive company culture and their focus on employees. 

Andy Niemeier is the Co-CEO of Azzip Pizza, a growing chain of fast casual pizza restaurants with ten locations. Azzip’s turnover rate in last year was 72% compared to the industry average of 131%. Andy said, “We view this as a strong sign of the strength of our employer brand if we are able to retain employees at almost twice the levels of our peers.” 

In their 2020 employee survey, team members were asked “On a scale of 0-10, how likely are you to recommend Azzip Pizza as an employer to a friend?” Nearly 90% of employees responded with a ‘7’ or higher with ‘10’ being the highest response (53%). That seems unusually high for the food service industry. Andy explained, “I think an employer brand is incredibly powerful. What are you known for as an employer? What are people telling others about what it’s like to work at Azzip? Do former employees speak well about their time at Azzip? A strong employer brand also translates over into a strong consumer brand (and vice-versa!).”

Matthew Nix is the President of Nix Companies, a growing group of small businesses combined to form a diversified metal solutions provider offering industrial products, manufacturing, and maintenance contracting. Nix Companies has recently been recognized as one of the “Best Places to Work in Indiana.” Matthew emphasizes the importance of focusing on employees and building a culture. He shared, “Our early decision to focus on our people and our culture will prove ever more valuable throughout the remainder of our careers.” 

In a recent article titled “The myth of labor shortages,” Leonhardt (2021) writes “companies have an easy way to solve the problem: Pay more.” This strategy may help encourage prime-age Americans to enter the workforce, but I doubt that only increasing wages will be enough. This problem is complex and multi-faceted. I recommend employers consider the recommendations in this blog. In addition, they should focus on listening to and learning from the experiences of current and former employees. 

How is your organization preparing for the labor shortage? What will you do in the coming year to ensure you have a skilled and talented workforce? We can help your organization invest in the workforce through leadership training and coaching programs. In addition, we can help facilitate a plan for enhanced employee engagement and retention. If you are interested in learning more about our services, please contact us


EMSI. (2021). The demographic drought: How the approaching sansdemic will transform the labor market for the rest of our lives. 

Leonhardt, D. (2021, May 20). The myth of labor shortages. The New York Times.