I recently saw Ron Hetrick speak in person and he was great – chock full of relevant and timely information.  Ron is a leading economist whose work is focused on the changing economy of the labor force.  You may have heard of The Demographic Drought – he coined the term.  Ron explains how the demographics of the workforce swelled with the influx of Baby Boomers.  The hiring norms that worked in a previous era, one in which we had an abundance of workers, will no longer serve companies well.  Yet, those hiring norms remain, embedded in hiring practices we have used for decades, and choking our effectiveness in employee selection today.

The rules have changed. In turn, we need to change our paradigm for hiring to match our new reality.

Check out Ron’s work in The Rising Storm (LINK: https://lightcast.io/resources/research/the-rising-storm) in which he defines the Sansdemic.  Sans = without.  Demic = people. He specifically talks about the jobs that are most in-demand in current and coming times, and what this all means for the future of education.  Do the jobs of the future require the education we valued in the past? (The quick answer is no.)

Below 2.1

Since 1971, the fertility rate in America has been below the population replacement level of 2.1 births per woman.  It reached a historic low of 1.62 births per woman in 2023. This means that the available American labor pool is coming up short.  The impact is expected to become more severe and will very quickly have an adverse effect on service levels and productivity in business.  It already has.

The combination of low fertility, lowered work force participation, the aging of Baby Boomers and their exit from the work force, means that we are not meeting the needs to fill critical jobs. The workforce is buoyed by the high levels of participation of both women and immigrants- both of which reached all-time highs in 2024.  The shortage of labor to meet demands in the US will soon arrive at a critical deficit, rising to 5-6 million in the next seven years.

Every area of professional, labor and service work will be affected by the shortage.  You are likely already feeling it.

What can you do to keep your business staffed and productive?

1. Give employees reasons for wanting to work with you and make sure you highlight these in job advertising and interviews.
   It’s long been recognized that employees value the purpose of what they do in their jobs and what the company they are part of stands for.  Give voice to your purpose and mission.   Give it space on your website and mention it in your job advertising, too. The culture of your workplace is of interest to the people who join you and of paramount importance to those already there.   Work hard to be sure you are developing yours. Consider offering any amount of flexibility in work schedules.   Even the smallest amount of personal discretion to allow employees to meet outside obligations is appreciated and empowering.  A flex start or end time to the workday, even on a limited number of days in a week or a month, is a real boon.  Think of what you could do with one early-out day each month. Talk about the benefits and perks of being part of your team in job advertising and interviews.  Feature it prominently.  And walk the walk with your current team members.

2. Get rid of Bottlenecks and Shorten the Selection Time.
   With competition for talent as vigorous as it is, you must act on job applicants quickly and eliminate all lags and slow downs in the process.  Time is not on your side.  All worthy candidates have other options that you aren’t aware of.   Keep candidates informed about your interview process and be sure to ask them what else is in their pipeline. Lay out your timetable and the steps that you planned for interviewing and selection.  Then ask if they are able to see that timetable through.  Don’t naively assume it will work for all.  You may find that you need to adjust in order to meet the candidates where they are. No need to settle for second best if you are timely and informed by your own micromarket.

Get all parties on the same page and commit to the efficiency of completing prescreening and interviewing steps before you begin.  Know the steps you consider essential for assessment and follow up conversations, and be ready to calendar them immediately.  Time kills all deals.  Have all players on deck and committed to acting promptly to hire the best people.

3. When Supply does not equal Demand.

There are many unnecessary roadblocks beyond time delays.  Try to shake off some of the many paradigms of hiring that linger from a time when the workforce was much larger and available on different terms.   These include simple frameworks for employee selection that might now be regarded as relics:

• I want three to five finalists before I make a decision.
• I’ll run the ad for 30 days to get a full candidate roster.
• Require a degree to get better quality candidates.
• Require a specified number of years’ prior experience in the same job.

Each of these parameters is self-limiting and may be for no good reason.

Reframe your thinking to give you an actionable and better hiring framework.

• Be prepared to offer the job once you find the right candidate for it. With the current short supply of workers, those with the most potential will receive multiple offers and be hired quickly. If it’s the first person you talk to, be ready to act. Count yourself lucky.
• In our experience, candidates who applied at the beginning of a search may not be available in days or weeks. Time lags in handling applies will not benefit you in any way.
• Degrees may not indicate qualification or over-qualification for any job. Parse out what is really indicative of success – it may be attitude, communication skills, problem solving skills or the ability to learn a technical skill.  Is there some skill you need that you think is indicated by a degree?  Is the same skill available in people without that degree?
• Analyze jobs, other than the one you need to fill, that call for the same natural abilities that make someone successful in the job you have at hand. People who succeed in customer-facing roles will be effective with your customers, too.  People who can handle rejection in one setting can handle it in another.   Think about what is really needed to succeed in each job. Ability to focus on detail, ability to follow through, optimism, critical thinking, ability to follow process or innovate process, ability to diffuse conflict – all predict success in different types of tasks.
• Natural behavioral traits may be more important than years of tenure. Learning agility may be more important than industry experience. If a ready supply of experienced people in your industry or profession is not adequate, seek transferable skills or learning agility.  Open up possibilities.

Value and retain your people.
They won’t be easy to replace and the cost of re-hiring for jobs is high.  Are you taking care of them?  Will you keep the band together when the market fluctuates?  Do they know they are valued?

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