Human Capital & Strategy-III

3 Innovations To Expand The Ever-Shrinking Labor Pool

Retirements, resignations, and staff shortages are plaguing businesses around the world. How are smart firms fighting back? ______By Joseph Warren

The phrase “Sorry, we’re a bit short-staffed right now” has become so commonplace it’s practically a punch line. Unfortunately, the bottom line impact of staffing shortages is no laughing matter. From mission critical vacancies in the back office to embarrassing gaps on the front lines, companies are scrambling to adapt to a “new normal” where there’s not enough staff to go around.

Some firms are adapting better than others. Here, three strategic innovations to address worsening labor shortages will be discussed, with an emphasis on tactics that can be quickly implemented by companies of any size, in any geography.

New wage transparency in online job postings offers talent pool benefits

One move firms can lean on right from the start is full wage transparency in job postings. Mandated in an increasing number of important labor markets, this disclosure has not been without controversy. However, it’s a fast way to indicate that a company isn’t afraid of having the conversation and that a firm has nothing to hide about how (and who) it pays.

The benefits, in fact, flow to both sides. For employees, it can help separate suitable jobs from poor matches, saving time in transitioning from one job to the next. For female applicants in particular, such disclosures can help end the gender pay gap and allow women to escape environments where their skills may not be being appreciated financially. By the same token, firms can show they’re paying equitably, attract a higher quality of candidate for open positions, and get ahead of the curve on understanding which skills are truly valued in their markets.

One extra perk? This transparency is also a place where employers who are offering new sign on bonuses, relocation packages, or higher salaries can stand out from the crowd. While wage increases and bonuses may not necessarily increase the total amount of talent available, it can increase the amount of talent interested in taking the work, which can be a tactical improvement worth the cost in tight markets.

Relaxed “requirements” allow firms to adapt to market realities

Another tactic savvy firms are quickly embracing is to re-examine their requirements for a given role. While this is sometimes referred to as “relaxing” requirements, it may be better thought of as relaxing “requirements” for work that often stood in the way of expanding the talent pool. In fact, there are three hot button requirements that can be tackled first by any firm looking to access more candidates – education level, drug testing, and criminal background.

At many firms, education is often the easiest place to start. Why is a four-year college degree listed as a requirement for an entry-level position? The degree is being used as a proxy for skill, but it’s not a perfect equivalent. Instead, the wide-spread availability of online skills assessment tools can make these kinds of tests a more accurate predictor of future success in-role, ending the need to filter out large swathes of the labor pool due to an unnecessary degree requirement.

More controversial? The ability to pass a drug test. Particularly as states legalize recreational use of marijuana, this requirement is not just narrowing the labor pool – it’s a legal minefield. As a result, where job safety isn’t a key factor, adapting drug testing requirements to the realities of the geographic market can open up new many areas of potential talent.

Equally contentious – and also having a noticeable disparate impact – are criminal background check requirements. Often linked to drug-based arrests or incarceration, this can keep highly capable potential new hires quarantined away from key opportunities. Further, 25 percent of US jobs require some kind of occupational license, and past incarceration can make the licenses needed to land those jobs off limits, too. However, over the last few years, many states have been changing their rules around this, expunging drug-based convictions or broadening occupational license support, which is allowing companies to access more potential workers. Given that nearly 100 legal changes have happened around this since 2017, firms interested in accessing a population eager to work and reintegrate fully should regularly check what’s possible in their jurisdictions and nationwide (and even consider nudging local lawmakers as needed).

Flexible job design expands pool of eligible staff

A third tactic to expand the pool of potential workers is flexible job design. This can be implemented in manufacturing as well as office settings, and offers several intriguing benefits to firms looking to expand their labor pool.

For existing staff, there’s the chance to keep workers more engaged with their positions. This could mean allowing some workers to be at home vs. in office, easing a caregiving juggle, or for two workers to split a job, keeping the position filled even as staffers choose part-time arrangements. In firms facing a retirement cliff, redesigning workloads can also be a rare opportunity to keep skilled senior staff engaged and contributing long past the time a 9-to-5 arrangement would have held them. There are also significant benefits when recruiting workers.

Flexible job arrangements – remote work, hybrid offers, alternative scheduling – can remove geographical barriers, expand the accessibility of the position, and make the firm more attractive to prospects. All of these things expand the labor pool, and at times can do so quite dramatically. For example, in STEM fields, offering flex arrangements can help keep women from leaving mid-level roles throughout the childbearing years, deepening future pools of executive leadership talent. Further, choosing to offer flex arrangements signals to workers that the firm is an innovator and likely to support work/life balance issues in a number of other ways, too.

Concluding thoughts

Good workers are in short supply – but they can be found. To expand a shrinking labor pool, firms need to get creative and eliminate as many barriers to talent as possible. Three places to start include being transparent about pay when posting jobs, nixing unnecessary requirement roadblocks, and allowing for flexible job design. While these three tactics may not provide an infinite supply of new workers, they are excellent places to start filling gaps and reaching new pools of highly qualified people.