Understanding the Labour Shortage
What is Labour Shortage?
The word labor shortage is not as clear-cut as it seems; it is genuinely a complex concept. Labour shortage refers to the shortage of qualified individuals to fill vacant job posts. The truth is some industries are affected by labor shortages more than others. They find it extremely difficult to find the right talent to hire and sometimes find it challenging to retain the employees they were able to hire—for instance, trucking, retail, technology, and health care industries. According to the Bureau of Labour Statistics (BLS), the U.S. had a labor shortage of almost 164 million in January 2022.

There are two types of labor shortage: quantity of people and quality of job candidates. The quantity of people refers to an apparent need for qualified individuals to fill the posts. On the other hand, the quality of job candidates refers to the shortage of individuals who lack the required qualifications to fill the position.

What Causes Labour Shortage?
Let’s break down four (4) main reasons countries experience labor shortages.
1. The Pandora-box (Pandemic).
The pandemic has undoubtedly affected most workers’ mental health, well-being, safety, and overall performance. People have dubbed it “The Great Resignation” phase of our lives. In 2021 alone, many Americans resigned from their place of employment due to safety concerns, concerns of job security, and a desire for more flexibility. The U.S. Chamber of Commerce found that over 47 million quit their jobs in 2021 due to the COVID-19 pandemic.
2. More Entrepreneurs.
We live in an age where people value being self-employed. This allows them to be flexible with their time experience financial security, independence, and the joy of doing something they love. Can you believe that we have 582 million entrepreneurs in the world? Notable, isn’t it? The pandemic only added to the number of entrepreneurs we have globally. People needed to be sure that they would not have lost their jobs, ultimately, their income.
3. More jobs than workers.
The world is evolving. There are several new industries, jobs, and experiences that people would like to explore. In addition, a lot of people have opted to be their boss. The U.S. Bureau of Labour and Statistics found that over 4.4 million workers quit their jobs while job openings remained 10.4 million. This created an ever-wider gap for the economy.
4. Early Retirement.
In 2021, the pandemic forced several people into early retirement. The truth is people were afraid because it was a time of uncertainty. Some people were laid off, and some were fired. Likewise, some people could not keep up with the requirements of working from home. So, they went into early retirement.
Key Takeaways:
  • Labour shortage refers to the lack of qualified individuals to fill vacant job posts.
  • According to the Bureau of Labour Statistics (BLS), the U.S. had a labor shortage of almost 164 million in January 2022.
  • There are two types of labor shortage: quantity of people and quality of job candidates.
  • Labour shortage is caused by the pandemic, having more entrepreneurs, more jobs than workers, early retirement, and health concerns.