No Workers to Waste

Employers are facing one of the tightest labor markets in recent decades—tighter than even before the pandemic when the unemployment rate hit a 50-year low. Yet there are enough “missing workers”—those who are out of the labor force but want a job—to fill all our open positions, if only employers can tap into them.

These untapped workers want to work but face barriers to getting into the labor force. They may be jobless, but they aren’t unemployable—if employers take practical steps to surmount what keeps these workers off the payroll. Here’s who they are and how to reach them.

Missing workers: Out of the labor force but wanting a job

As of May 2022, there were a near-record 5.3 million more job openings than available workers, according to the Bureau of Labor Statistics. Yet at the same time, there are 5.7 million persons who want a job now but are not currently looking for one.

These missing workers can be classified into two groups of previous job hunters:

●      Those in the first group have searched for a job within the past year, including both discouraged and non-discouraged workers who are sitting on the sidelines and ready to work now.

●      Those in the second group are persons who abandoned their job search more than a year ago amid the unique challenges of the pandemic (childcare, health concerns, etc.) and are likely more willing to once again seek employment under the right circumstances.

For employers, then, widening the funnel of potential job candidates boils down to identifying these individuals who want a job but haven’t been searching for one, understanding their concerns and priorities, and adopting recruitment efforts and work arrangements that ease barriers to employment for these populations.

In the same vein, employers must also reset their expectations of the ideal new hire, by thinking in terms of the best “trainable match” rather than the “perfect match.”

Missing workers are “missing” for specific reasons

The upshot is that we know why many missing workers have left the workforce over the past year, which can inform employer strategies for reaching these populations. Based on the BLS household survey, discouraged workers cite being discouraged about their job prospects due to factors such as:

●      discrimination;

●      insufficient education, training, or experience needed to qualify for available jobs; or

●      being unable to find work in the past, either in their field or elsewhere.

By contrast, non-discouraged workers cite not looking for work during the past four weeks due to:

●      childcare problems and family responsibilities;

●      ill health or disability;

●      difficulty finding transportation; or

●      being in school or training.

Despite the historically tight labor market and rapidly rising wages and benefits, the number of missing workers remains 13% above pre-pandemic levels. And there are 17% more people who haven’t searched for a job in the past year but nonetheless want one.

Other overlooked talent pools

Under the missing workers umbrella are other groups who historically have been overlooked or even avoided by employers. These include the disabled, the previously incarcerated, and the homeless. For example, of the approximately 33 million Americans with disabilities aged 16 and over, less than a quarter (23%) were working or actively looking for work in June 2022, according to BLS data. Disabled workers have been making progress, with the labor force participation rate for disabled persons up almost two percentage points in June from a year earlier. But increasing that participation rate another two points to an even 25 percent—with the right employer incentives and support—would increase the talent pool by another 650,000 workers.

Similarly, the nearly five million formerly incarcerated people in America have an unemployment rate of over 27%. And of the approximately quarter million adults experiencing sheltered homelessness, research suggests that only about half have worked at some point during the year. By giving homeless and formerly-incarcerated people a chance at gainful employment, and offering additional coaching and support, employers can unlock a pool of untapped talent with higher retention rates.

Five strategies for filling talent gaps with “missing workers”

Raising wages and benefits aren’t enough to tap into these talent pools, because money isn’t the primary barrier keeping these workers on the sidelines. Rather, understanding what is keeping people out of the labor force will help employers remove some of the barriers and get these workers into the talent pipeline.

Companies can target missing workers by adopting five main strategies:

1. Adopt flexible, creative work arrangements. Remote work can be a game changer for some individuals, but it is not a silver bullet. More than half (53.6%) of employed people are in occupations that are not suitable for telework, according to BLS estimates. Rather, flexibility in setting work schedules (i.e., floating start times, shift swapping, or compressed work weeks) can offset some of the day-to-day family care, transportation, or other challenges of a regular 9-to-5 job. To reach discouraged workers, providing flexibility (and pay) to attend training during regular working hours can be especially motivating.

2. Make the recruitment process simpler and more inclusive. Companies must double down on proven tactics to reach missing worker populations. A Conference Board study found that implementing employee referral programs, intensifying social media efforts, and shortening the recruitment process with fewer interviews were among the easiest and most effective ways to recruit talent during periods of acute labor shortage.

Employers can also use more inclusive language in job postings, implement “easy apply” mobile options, reprogram application screening algorithms to accept (rather than throw out) resumes with employment gaps and alternative credentials, and maintain accessible virtual interviewing.

3. Split jobs into tasks. Employers can make it easier for potential job seekers to see how their qualifications or personal circumstances match open positions by breaking jobs into tasks and matching those tasks to candidates’ “three S’s”:

●      Skill level, by rewriting job descriptions to focus on core competencies and “must-have” skills, or lowering degree and experience requirements;

●      Schedule, by creating job sharing or project-based roles that can be filled by workers on a part-time or alternative schedule; and

●      Desired stress level, by offering roles with lower physical demands and stressors to accommodate personal circumstances

4. Let workers grow into their jobs through targeted training. Discouraged workers often don’t apply to job opportunities because they feel underqualified. Employers can ease these fears by making it clear in job postings that applicants can grow into roles through employer-provided training, including: robust onboarding or on-ramping programs; and internships, apprenticeships, or other work-based learning opportunities.

5. Consciously work to retain employees. With quit rates at an all-time high, keeping hard-won workers is just as important as finding them in the first place. Maintaining tailored training and support programs or special accommodations and work schedules used to recruit missing workers can increase job satisfaction, employee morale, and ultimately retention rates. Other tactical retention strategies include consistently aligning work assignments to skill development milestones (to avoid workers feeling underqualified), improving reward and recognition programs, formalizing career pathways, offering health and well-being programs that target specific employee needs, and conducting 30-, 60-, and 90-day “stay interviews” to identify what is and is not working for new employees.

A competitive advantage in the labor market

Missing workers—those that are out of the labor force but want a job—currently represent the largest untapped pool of talent in the US. If every “missing worker” were back in the labor force we would essentially end the current labor shortage. Yet enticing people back into the workforce entails understanding their reasons for not working and developing a unique mix of supports and incentives that remove some of the roadblocks keeping them out.

In a historically tight labor market, widening the talent pool also entails companies rethinking their notion of the ideal new hire. Companies that align job descriptions, roles, and functions to the broader set of concerns and priorities of people outside the labor force will have a competitive advantage in the labor market.