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Home » Blogs » Think Tank » Multigenerational Labor Gap Calls for Creative Solutions, Report Says

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Multigenerational Labor Gap Calls for Creative Solutions, Report Says

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Professionals meet in an office. Photo: Pexels.
May 4, 2022
Helen Atkinson, Senior Editor

“Workers can come from only two sources: the population we already have or the population we can gain through immigration.” That’s the stark message from Emsi Burning Glass Technologies, an analytics software company that provides real-time data on job growth, skills in demand, and labor market trends. 

In its latest report on what it terms the Demographic Drought, “Bridging the Gap in Our Labor Force,” the firm points to the fact that, added to an aging population, many younger workers are simply leaving the workforce altogether. “Recovering our workforce is not about the employed vs. unemployed, it’s about the unengaged,” say the authors, Ron Hetrick, Cassondra Martinez and Hannah Grieser. “The same question is on everyone’s minds: How can we fill the labor force gap?”

The problem is not a historical hiccup. Even before the COVID-19 pandemic, they point out, the U.S. was facing a talent deficit of six million workers by the end of the decade. Then, the pandemic struck, and brought that prospect closer very fast. There are currently a record 11 million job openings in the U.S. The “unengaged” account for 6 million and there are more than 4 million immigration visas stuck in processing. 

In order to address the problem of the missing workers, simply knowing how many people are out of the labor force is not enough, the report says. It’s necessary to get a better understanding of specifically who is missing. 

The report breaks down three age cohorts: 16-24 (entering workforce), 25-54 (prime-age workforce), and 55+ (imminent retirees). Emsi Burning Glass’s analysis of U.S. Department of Labor statistics finds that the 55+ cohort left the labor force at a much higher rate than the others. To get back to a healthy labor force participation rate (LFPR), there is a need to actively re-engage that 55+ population, especially those who exited the labor force early. 

Additionally, looking at the drop-out rate of prime-age workers, the authors raised the question of whether some of these individuals are spouses who learned how to live on one income during the pandemic.

The report looks at two other factors compounding the low LFPR: cost and lack of childcare, and a temporary boost in personal savings. First, childcare facilities experience problems ascertaining qualified staff, making childcare hard to find, and childcare expenses can undercut the economic benefits of returning to work, especially for lower-wage workers. That situation is unlikely to change. 

On the second point, there is more likelihood of a shift. Personal savings actually went up during the pandemic, likely meaning more Americans could make ends meet without returning to work. The fact these savings are now decreasing may indicate that people will return, the report argues.

But that still leaves a large gap to be filled. 

Solutions suggested by the report include embracing the gig economy, part-time work, and overall “job freedom mentality” — including flexible hours, contract work, remote and hybrid options. These, the authors say, can open up creative opportunities for filling positions.

They also urge employers to get proactive and creative about recruiting. “Try shifting the focus of your recruiting efforts away from resumes that check all of the skill boxes,” the authors suggest. “This includes sourcing and recruitment techniques that tap into pools of workers that may have no experience in your industry.”

In order to attract older workers back, employers should bear in mind that the strategies they use to recruit younger people into the workforce may not motivate older workers. One suggestion is to offer part-time employees benefits usually provided only to full-time employees, as an enticement.

The report also emphasizes the rising share of immigrants in the U.S. workforce, which makes logical sense when you consider the falling birth rate within the country. Therefore, one potential solution to the workforce shortfall would be to increase immigration. “But this is not a matter of simply flipping a switch,” the report warns. “Immigration raises a tangled set of social, political, economic, and demographic questions. And there are no one-size-fits-all answers. At the same time, however, the data indicates that conversations about the labor shortage should include a look at the future of immigration.”

“Workers can come from only two sources: the population we already have or the population we can gain through immigration.” That’s the stark message from Emsi Burning Glass Technologies, an analytics software company that provides real-time data on job growth, skills in demand, and labor market trends. 

In its latest report on what it terms the Demographic Drought, “Bridging the Gap in Our Labor Force,” the firm points to the fact that, added to an aging population, many younger workers are simply leaving the workforce altogether. “Recovering our workforce is not about the employed vs. unemployed, it’s about the unengaged,” say the authors, Ron Hetrick, Cassondra Martinez and Hannah Grieser. “The same question is on everyone’s minds: How can we fill the labor force gap?”

The problem is not a historical hiccup. Even before the COVID-19 pandemic, they point out, the U.S. was facing a talent deficit of six million workers by the end of the decade. Then, the pandemic struck, and brought that prospect closer very fast. There are currently a record 11 million job openings in the U.S. The “unengaged” account for 6 million and there are more than 4 million immigration visas stuck in processing. 

In order to address the problem of the missing workers, simply knowing how many people are out of the labor force is not enough, the report says. It’s necessary to get a better understanding of specifically who is missing. 

The report breaks down three age cohorts: 16-24 (entering workforce), 25-54 (prime-age workforce), and 55+ (imminent retirees). Emsi Burning Glass’s analysis of U.S. Department of Labor statistics finds that the 55+ cohort left the labor force at a much higher rate than the others. To get back to a healthy labor force participation rate (LFPR), there is a need to actively re-engage that 55+ population, especially those who exited the labor force early. 

Additionally, looking at the drop-out rate of prime-age workers, the authors raised the question of whether some of these individuals are spouses who learned how to live on one income during the pandemic.

The report looks at two other factors compounding the low LFPR: cost and lack of childcare, and a temporary boost in personal savings. First, childcare facilities experience problems ascertaining qualified staff, making childcare hard to find, and childcare expenses can undercut the economic benefits of returning to work, especially for lower-wage workers. That situation is unlikely to change. 

On the second point, there is more likelihood of a shift. Personal savings actually went up during the pandemic, likely meaning more Americans could make ends meet without returning to work. The fact these savings are now decreasing may indicate that people will return, the report argues.

But that still leaves a large gap to be filled. 

Solutions suggested by the report include embracing the gig economy, part-time work, and overall “job freedom mentality” — including flexible hours, contract work, remote and hybrid options. These, the authors say, can open up creative opportunities for filling positions.

They also urge employers to get proactive and creative about recruiting. “Try shifting the focus of your recruiting efforts away from resumes that check all of the skill boxes,” the authors suggest. “This includes sourcing and recruitment techniques that tap into pools of workers that may have no experience in your industry.”

In order to attract older workers back, employers should bear in mind that the strategies they use to recruit younger people into the workforce may not motivate older workers. One suggestion is to offer part-time employees benefits usually provided only to full-time employees, as an enticement.

The report also emphasizes the rising share of immigrants in the U.S. workforce, which makes logical sense when you consider the falling birth rate within the country. Therefore, one potential solution to the workforce shortfall would be to increase immigration. “But this is not a matter of simply flipping a switch,” the report warns. “Immigration raises a tangled set of social, political, economic, and demographic questions. And there are no one-size-fits-all answers. At the same time, however, the data indicates that conversations about the labor shortage should include a look at the future of immigration.”

HR & Labor Management

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