Around the globe, nearly every industry is experiencing a skilled-labor shortage. A recent report predicts that by 2035, Germany will suffer a labor shortage of 7 million skilled professionals. In the UK, an ONS survey found that 13.3 percent of businesses reported a labor shortage alongside 1.19 million vacancies across the country, “similar to the number of unemployed people.” And in the US, the Chamber of Commerce and Bureau of Labor Statistics data found that roughly 3 million people have disappeared from the American workforce since 2020.
While the exact causes of the labor shortage may vary from country to country, the overarching reasons are the same. Baby Boomers are retiring early, younger generations are focused on education and reskilling instead of working, and people suffering from chronic health issues related to long COVID are no longer able to work.
Yet even these reasons aren’t sufficient to explain why the number of unemployed professionals is so close to the number of vacancies in the UK or why there are still 5.7 million unemployed Americans compared to the missing 3 million. One possible explanation: Incredibly rapid change.
Today’s work landscape—and many of the skills businesses now rely on—were unimaginable in the pre-pandemic world. Markets have evolved at breakneck speeds, and the skills required to keep the pace outran how quickly people were able to gain experience and expertise–especially as waves of layoffs swept every sector in the early days of the pandemic. Those who remained employed gained the skills and experience needed, but those who were laid off never had the chance.
Strategies for fighting the labor shortage
Businesses seeking to build a robust workforce equipped with the skills they need now and in the future must be proactive about investing in high-potential professionals (regardless of their current hard skillset or experience) and providing on-the-job training. Investing in apprenticeship, mentorship, and reskilling programs for talent of all ages will be key to reinforcing businesses. In fact, the US government even recently proposed a program to invest more heavily in sectoral training and apprenticeships.
These three best practices can help HR professionals integrate reskilling and training programs into their organization’s learning and development policies to bridge the skills gap and mitigate the impact of the skilled labor shortage.
1. Invest in apprenticeships
HR professionals in all industries can learn from the high-tech sector’s recent embrace of the apprenticeship model as a form of on-the-job training. Tech giants such as LinkedIn, Intuit, and IBM have all turned to apprenticeships for people who haven’t had the opportunities to receive the necessary education or work experience but have the potential to develop into valued professionals.
To follow suit, consider:
- Recruiting more widely – Today, apprenticeships can be used to expand and diversify recruiting pipelines and avoid overlooking potential talent simply because they lack specific credentials.
- Cast a wide net – Flexibility in apprenticeship programs can be highly beneficial. For example, LinkedIn allows apprentices to remain in the program for as long as it takes to meet the requirements for promotion, and makes apprenticeships available to both internal and external candidates.
- Focus on soft skills – Apprenticeships allow the hiring focus to shift from hard skills and credentials—which can be learned and gained—to cultural fit, mindset, and soft skills.
2. Benefit from mentorship programs
The world’s second-largest employer, Amazon, is currently leading the way with an example of how mentorships can be used for successful career development. Their mentorship program grew from 18,800 participants in its first year (2016) to nearly 160,000 in 2022.
The benefits of mentoring range from the more concrete—helping talent grow and be promoted—to the personal, building lasting relationships and offering inspiration. By pairing mentees with mentors who come from similar backgrounds or deal with similar challenges, mentorship can model possibilities for long-term growth.
Amazon Mentoring senior program manager Melony Menard shares these tips for success with mentorship programs.
- Empower talent – Allow mentees to take ownership of their careers by thinking about their growth areas, goals, and challenges before entering into a mentoring relationship
- Tie in DEI&B – Connecting mentorship with affinity groups helps promote diversity and equity while helping people grow
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3. Reskill talented individuals
In a world where 57 percent of people state that a lack of career development opportunities may prompt them to change jobs, employee development is key to retaining talent and future-proofing businesses.
With the labor shortage, it’s become best practice for businesses to shift their people strategy toward reskilling those with a proven ability to adapt, learn, and apply knowledge quickly. This helps keep top talent, which not only saves on recruitment and onboarding costs but also builds today’s workforce into the competitive talent agent required to thrive tomorrow.
The key is identifying transferable skills well-suited for reskilling efforts. These include abilities such as:
- Critical thinking – Analytical, problem-solving skills can be applied in any role, helping to evaluate problems—whatever they may be—and applying the best solutions
- Cloud computing – In today’s hybrid working world, the ability to use cloud databases, networks, and software is highly valuable, helping organizations scale and increase data security
- Data literacy – Nearly every role in a modern organization requires some degree of data literacy, which business leaders predict will become the most in-demand skill by 2030
Solving the global labor shortage
Many factors contributing to the global labor shortage are out of HR’s control. But there are actionable, practical steps HR leaders and professionals can take to strengthen their businesses, meet labor requirements, and cultivate a workforce ready and capable of handling the demands of today and tomorrow.
By focusing on enriching knowledge and skills through apprenticeship, mentorship, and reskilling, businesses can build a robust workforce and bridge the skills gap to thrive in the ever-evolving working world.