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How a Focus on Employee Wellness can Combat Looming Labor Shortages

As the pandemic fades, the US economy is roaring back to life, with consumer spending leading the way. As people resume their previous activities, industries ranging from hospitality to retail are scrambling to hire workers. Employers find themselves competing for workers with those in their industry, as well as others such as e-commerce giants Amazon and Walmart.

Many organizations, especially in high-demand industries, find themselves short-staffed despite millions of laid-off workers. So many Americans are unemployed in 2021 that experts say it’s suppressing the country’s economic recovery. Desperate employers are raising wages and offering incentives such as signing bonuses, yet many positions remain open and turnover is a problem.

Even good-paying jobs in construction, trucking and manufacturing can’t find or keep qualified candidates.

While it’s tempting to blame fear of COVID, poor pay and/or working conditions, or generous federal unemployment benefits for the dearth of job applicants, the reality is more complex. While those aspects all have an impact, there are other contributing factors as well. The pandemic upended the labor market, with millions reevaluating their job circumstances. Many decided to make a change by switching professions or dropping out of the workforce altogether.

  1. The pool of potential employees shrank in 2020 as many older workers, especially Baby Boomers and those with health problems, opted for early retirement. Some of them, such as factory workers, welders, and truck drivers, had valuable skills and/or certifications not easily replaced.
  2. Local job markets vary widely by region, with states’ unemployment rates ranging from 2.8 to 8.5 percent. Many unemployed don’t live where the job openings are located. For example, an out-of-work car factory worker in Detroit won’t typically consider a similar job in Texas.
  3. More than six million people, mostly women, cite child-care duties for limiting their ability to return to work.
  4. Furloughed workers often wait to be called back to their previous employer, where they may have seniority and accrued benefits, versus starting all over at a new workplace.

Even before the pandemic, industries such as the manufacturing, construction and transportation sectors complained how a lack of skilled workers was hampering productivity and competitiveness. This is only expected to get worse as millions of older workers retire and others drop out of the active workforce.

A recent report by the Workforce Institute at UKG finds the manufacturing industry especially hard-hit. Nearly two-thirds of manufacturers report struggling to fill critical labor gaps and nearly half have trouble retaining skilled employees. Another report by Deloitte and The Manufacturing Institute forecast over 2 million manufacturing jobs will be unfilled through 2030, costing the US up to $1 trillion in lost economic output in that timeframe.

Employee Recruiting and Retention Take Center Stage

With labor shortages predicted to be an ongoing problem, organizations need to focus on employee retention as well as recruitment. With new talent so hard to find, a trained, experienced employee is a valuable asset. Improving the quality of jobs, increasing pay as needed, and investing in employee wellbeing can help organizations find and retain workers long-term.

Employee wellness programs are shown to improve employee musculoskeletal functions, decrease absenteeism and presenteeism, and enhance worker productivity. Whether onsite health screenings, exercise routines, or onsite physical therapy, programs like these can be used to treat various health conditions and boost employee morale. They may also help workers stave off disabilities that would lead to early retirement, so they can stay on the job and share their valuable knowledge with newer employees.

To learn more about the connection between MSK wellness and employee productivity, download the ebook below.

MSK eBook