Job openings at the end of January in the United States reached 6.3 million according to the US Bureau of Labor Statistics. The rapidly shrinking gap between available jobs and the number of individuals seeking jobs could easily lead to a labor deficit. At the very least, the competition for workers is intensifying with the tightening of the labor supply. For some businesses, it is an issue of too few bodies. For others, it is an issue of too few qualified candidates. Increasingly, it is an issue of more and more employees willing to accept more favorable employment elsewhere. No matter what specific reason an employer faces a labor deficit, however, employers must automate, scale back their operations, risk overloading their current workers, or find ways to maintain and expand their payroll. All employers need to make themselves more attractive in an economy favorable to job seekers.
Unfortunately, the capacity of employers to make them themselves more attractive through higher wages, as well as non-financial incentives, largely depends on their revenue and budget caps. Employers operating in low-profit industries, which deliver slim profit margins, and low-income regions, which restrict the ability of businesses to raise their prices and attract new consumer spending, will struggle the most to cope with labor deficits. Because employees do not just work for a paycheck, employers can, of course, try to cater to the social and emotional interests of employees, in addition to their economic interests, by creating a more favorable work environment, e.g. preferential scheduling, streamlined operations that ease the stress on workers, greater workplace freedom, and improved employer-employee relations.
One major problem with the modern view of the workforce is the mentality of businessmen who treat their workers like commodities. It is why some businesses are more likely to face a labor deficit than others. Like precious metals, some employees are silver, others are gold, and an elite few are platinum while the majority are either copper or iron. Employees are graded based on their ability to fit the qualifications companies need them to fill. They are not treated as individuals with unique skills sets and backgrounds, which means businesses cannot fully capitalize on their potential. Instead of tailoring roles in their businesses to utilize the skills of employees and candidates, businesses try to fit people into positions. The simple truth is that, businesses struggle to find the qualifications they want, because people are so diverse and specialized that they cannot be what employers want them to be.
Entrepreneurs can build businesses, because they are able to fill a need. Although a need might exist, an entrepreneur is only able to build a successful businesses when he or she is able to provide for that need. If the need, or demand, does not actually exist, the business will fail. When an entrepreneur is unable to find a way to utilize his or her resources and skills to fulfill a need, that entrepreneur is unable to build a successful business. The same is true of employees. The need for them exists. The employees have certain skill sets. The business owner or manager must find ways to utilize the skill sets of employees to provide for an existing demand. Employers, therefore, need to approach hiring and promoting with an entrepreneurial spirit. They need to embrace pro-growth work environments.
With that in mind, the workforce is a sea of human resources. As the needs of a business change, the positions and employees must change or be eliminated. Change is the one certainty all businesses face. Employees must, therefore, be able to fill the needs of the business today and tomorrow. Few employees, if any, will fit a position perfectly. Employers must, therefore, foster adaptability in their employees. The only way to do that is to seize the opportunities presented by employees, who may not be a perfect fit for an existing position. It is also the only way to create the opportunities and jobs people will need in the future. Instead of commoditizing people, businesses need to capitalize on their human resources to foster opportunity creation for their businesses and the economy.
Furthermore, non-financial incentives are very limited and overall pay rates must increase in an economy that favors labor. The unemployment rate is a number that is talked about a great deal. Based on the number of people who allegedly want to work, this overly relied upon value is fairly dubious, but it does factor into a far more important number: wage growth. What makes wage growth more important is that it shows the strength of the economy by revealing the need for businesses to pay their workers more and the capacity of working consumers to spend more. Wage growth shows how well wealth is being circulated, or distributed, throughout the economy, which reveals the economy is working. Wage growth also reveals whether or not workers are progressing toward financial security and prosperity.
A lack of reliable workers is a problem for any business. It is a problem that most employers hope to solve in a way that does not hurt their businesses. When the budget allows it, raising the pay of workers is an easy and potent way to show employees that they are valued and needed, which helps with retention. It is easy to disqualify potential hires, reason away arguments for wage increases, and dismiss the need for solid human resource management, but businesses need good workers to become successful and to remain successful. When the labor market has an excess of job candidates, it is especially easy to treat workers as nothing more than the “help.” Looking for any reason to disqualify someone, instead of seeking out what a person has to offer, is why businesses, industries, and economies fail. It is especially hazardous when employees can find work elsewhere in an economy defined by labor deficits.
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