BLR Blog Image Addressing Talent Shortage 1115

Causes of the Current Talent Shortage—and What Companies Can Do to Overcome It

It’s no secret that the U.S. labor market is in shambles. Millions of Americans find themselves out of work—while millions more job openings remain unfilled. To make matters worse, the U.S. labor force participation rate has plunged to historic lows since the start of the pandemic in March 2020—reflecting an employment deficit that hasn’t been seen since the mid-1970s.

Throughout the country, HR professionals and talent acquisition specialists are scrambling to connect their organizations with qualified candidates—knowing that the viability of their business depends on it. From thousand-dollar sign-on bonuses to full tuition reimbursement, companies are doing whatever they can to catch workers’ attention. Yet despite these efforts, a collective recruiting struggle remains prevalent.

This begs the question: is this problem ever going to end? Here’s my take on why the labor market is in such a state of disarray—and what employers can do to enhance their talent acquisition strategies of the future.

More than just the pandemic

No one can argue that the past year and a half has been a chaotic time for both businesses and workers alike. While the outbreak of COVID-19 undoubtedly accentuated worsening labor market trends, problems existed long before the coronavirus came into the picture. According to data published by the U.S. Census Bureau, the American population grew only about seven percent between 2010 and 2020—comparable to previous historic lows between 1930 and 1940 during the Great Depression. Studies show that the country’s national birth rate reached a 35-year low in 2019. And—to make matters worse—the U.S. population is expected to begin shrinking by 2062. As these trends have all been headed in the wrong direction, it was only a matter of time before a labor shortage ensued.

Detrimental impacts on the U.S. economy

For centuries, the American economy has been buoyed by a strong and stable workforce—one that has been consistently robust in size. Yet during the pandemic—when countless businesses were shuttered and millions of workers were displaced from their jobs—some of the many luxuries that we’ve come to take for granted dissipated. Without an ample supply of workers, important processes were significantly disrupted. From a supply chain perspective, the pandemic has completely altered the state of business operations. Without an abundance of workers to draw from, processes that were once optimized quickly became impaired—throwing a wrench in business success and grinding the growth and expansion of the U.S. economy to a halt.

Departing baby boomers leaving a void

The success and viability of the American economy have—in large part—been due to the large population of baby boomers that remain active members of the U.S. labor force. Studies show that a whopping 76 million Americans were born between 1946 and 1964 in the period immediately following World War II. This now-older generation was critical in shaping hiring norms and supporting the growth of the U.S. labor market to unprecedented levels—making talent readily available and highly affordable. But due in large part to the impacts of the pandemic, a staggering 6 million baby boomers retired from the workforce from October 2020 to March 2021. Because of a lack of skills, experience, and training, younger generations of millennials and Gen Zers have seldom replaced these retiring workers—creating a significant gap in both people and productivity that businesses must address.

Learn more about COVID-19’s impact on ageism in the workforce.

Changing priorities among younger workers

Additive to the diminishing size of the U.S. labor force since the start of the pandemic, younger generations of workers have experienced a change in workplace priorities—and they’re making these new desires well-known. As Americans shifted to at-home work environments during the pandemic, many have developed an adoration for more flexible work schedules that can provide a greater work-life balance. Labor market surveys and studies conducted by the U.S. Bureau of Labor Statistics show that a rising number of male millennials and Gen Zers are seeking more part-time roles versus full-time positions. By prioritizing 20-to-30-hour per week jobs, younger men have further attributed to the talent shortage currently ravaging our nation. While these generations have often been stereotyped as lazy and entitled, such generalizations were ultimately caused by baby boomers’ reluctance to encourage their children to actively join the labor force. To ease the modern talent deficit and fill the void left by baby boomers, America needs to bolster its efforts to educate and train younger workers.

Video: Total Talent Management


The solution lies with innovation

Solving the collective talent woes that are ravaging American businesses—both large and small—isn’t a simple fix. For a country that has long been overly reliant on its robust workforce, problems like the ones we’re experiencing today have been long overdue. As growth in the U.S. population continues to dip toward historic lows, the answer to fixing this talent shortage lies in innovation. With less able-bodied workers available to work, companies must continue to evolve and keep pace with an increasingly digital world. The acceleration of automated technology is one such area where businesses can make up for a lack of suitable talent. Replacing manual processes with ones handled by software or robots is where the future of the workforce is heading. Unleashing the power of twenty-first-century innovation will ultimately help American businesses overcome these talent shortages and spark greater efficiencies in areas such as delivery and operations.

Improving talent acquisition through outsourcing  

If you’re an HR or TA professional like me, the past 18 months have been nothing but a rollercoaster ride. We’ve gone from recruiting needs coming to a standstill overnight to a non-stop hypergrowth hiring mode. If your business is currently feeling the effects of the current labor shortage, it’s time to consider outsourcing some of your talent acquisition functions. Working with a third-party provider can present a viable solution to help expand your talent pool, enhance candidate quality, improve time-to-fill, and generate substantial cost savings. Whether you’re looking for a Managed Service Program (MSP) to hire contingent workers or a Recruitment Process Outsourcing (RPO) solution for full-time employees, finding the right talent management provider can be the cure to your hiring woes.


Like it or not, the coronavirus pandemic has exposed a major problem within the American workforce—one that doesn’t look to be going away anytime soon. The current talent shortage hindering businesses across the country has put serious pressure on organizations to modernize and keep pace with the changing world around them. In such a strong candidate market, employees will pursue opportunities where they feel valued and appreciated. And with record numbers of baby boomers choosing to retire, the knowledge gap between older workers and younger ones continues to widen.

To prepare your business for the talent challenges that lie ahead, it’s imperative to develop a strategic long-term talent acquisition plan that addresses these challenges and lays out steps for the future. The success of your organization is largely dependent on its people. By being diligent and proactive in your recruiting approach, you’ll reap the benefits of a workforce that is highly skilled, properly trained, and well-qualified to get the job done.

The topic of workplace attrition vs. attraction has been a prominent one throughout the COVID-19 pandemic. Learn more about what your business can do to build a stronger workforce while fighting the impacts of employee turnover here.

This blog was written by Broadleaf’s Senior Vice President, Client Delivery, Suzie Mitchell.

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