Employers’ tactics for managing the labor shortage

The Economist analyzed how employers are adjusting to a labor market with only seven workers for every ten available jobs. Tactics include sign-on bonuses, higher base pay, in-house training, more predictable schedules, and investments in automation.

From “How America’s talent wars are reshaping business” (The Economist):

The share of job postings that list “no experience required” more than doubled from January 2020 to September 2021, according to Burning Glass, an analytics firm. Easing rigid criteria may be sensible, even without a labour shortage.

Another way to deal with a shortage of qualified staff is for the companies to impart the qualifications themselves. In September, the most recent month for which Burning Glass has data, the share of job postings that offer training was more than 30% higher than in January 2020. 

Besides revamping recruitment and training, companies are modifying how their workers work. Some positions are objectively bad, with low pay, unpredictable scheduling and little opportunity for growth. Zeynep Ton of the MIT Sloan School of Management contends that making low-wage jobs more appealing improves retention and productivity, which supports profits in the long term. As interesting as Walmart’s pay increases, she argues, are the retail behemoth’s management changes. Last year it said that two-thirds of the more than 565,000 hourly workers in its stores would work full time, up from about half in 2016. They would have predictable schedules week to week and more structured mentorship. 

As a last resort, companies that cannot find enough workers are trying to do with fewer of them. […] Increasingly, it also involves investments in automation. Orders of robots in the third quarter surpassed their prepandemic high, by both volume and value, according to the Association for Advancing Automation.


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