As Massive Labor Shortage Looms, Lightcast's New "Demographic Drought" Report Can Help Companies Weather the Storm
MOSCOW, Idaho, Sept. 17, 2024 /PRNewswire/ -- A new data report from Lightcast, a provider of trusted global labor market data, analytics, and expert guidance, shows U.S. employers will soon face the largest labor shortage the country has ever seen, putting urgent pressure on both public and private entities to pivot their talent strategies and build a future-ready workforce.
Lightcast's new report, "The Rising Storm: Building a Future-Ready Workforce to Withstand the Looming Labor Shortage," shows how the deluge of Baby Boomers' retirement, plummeting childbirth rates, and historically low labor force participation will compound to create a deficit of six million workers by 2032. With the biggest impacts of this "perfect storm" expected to hit the healthcare, hospitality, and service industries hardest, it is critical that government and business leaders take immediate steps to address the workforce deficit.
"The Rising Storm" is a follow-up to Lightcast's "Demographic Drought" series that first predicted the coming labor shortage and opportunities to increase labor participation rate. This latest version offers new insights into the labor force dynamics shaping a significant transformation in the way of work, as well as actionable strategies businesses, educators, and government leaders should implement now to protect their organizations from the impending storm.
According to Lightcast's data and analysis, the workforce deficit is being driven by several key factors, including:
The "Silver Tsunami" hitting shore. Of the five million workers who have exited the workforce since 2021, 80% were over the age of 55. Now, the average retirement age has dropped to 61, diminishing any hope that older workers might fill new gaps in the labor force.
A rapid decline in the U.S.-born labor force. The only growth in the U.S. labor force since 2019 can be attributed to immigration, including April's record-high level of prime-age women participating in the workforce. Foreign-born workers are keeping the economy afloat.
A major mismatch between workers and available jobs. The shrinking U.S.-born labor force is also becoming younger, more educated, and more female, but these groups aren't filling key trade, service, and healthcare roles. Immigrants are essential; one in four doctors and one in five nurses in the U.S. are foreign-born. In some states, the dependencies are much higher.
The decline in workforce participation of prime-age men. Men are disappearing from the labor force, driven by an uptick in issues like substance abuse and incarceration that disproportionately impact this demographic.
"Like an approaching hurricane, we felt the outer bands of this coming storm during the pandemic as the 'Silver Tsunami' of Boomer retirements began, immigration came to a halt, and more than five million workers left the labor force," said Ron Hetrick, Lightcast Sr. Economist and co-author of the "Demographic Drought" series. "But that was just a preview. Over the next five to seven years, our labor pool's growth will not match our population's. We will increasingly have more consumers than producers, driving price hikes and product shortages, if we don't take swift action."
"This report reinforces our view that we are on the cusp of an era of unprecedented turbulence in the labor market -- in the U.S. and all over the world," added Lightcast CEO Chris Kibarian. "To help our public and private sector clients thrive in challenging market environments, we feel it is important to first understand root causes and areas of acute shortages so we can focus our efforts on building sustainable solutions for education, training, workforce management, and economic development. We are committed to successful outcomes as much as we are committed to sharing powerful labor market insights."
According to Lightcast's analysis, organizations will need four core strategies to adapt to the shifting labor market: globalization, automation, immigration, and workforce development. Finding new ways to expand the talent supply, whether through seeking capable employees abroad or exploring the potential of AI in key roles, will be necessary to bridge gaps across industries.
Meanwhile, educators and employers must prioritize skills development and adaptability over college degrees.
"One of the factors contributing to this talent deficit is that we've de-valued service, manufacturing, construction, and other trade work while holding those requiring a college degree in higher esteem," Hetrick said. "That's deterred a lot of people from pursuing these careers, despite substantial improvement in wages and lucrative career opportunities in many occupations in these sectors. Most importantly, these are incredibly important jobs that sustain our economy, and we must shift that mentality immediately if we're ever going to have enough people to produce, build, repair, and service our vital needs."
To overcome hiring deficits, Lightcast suggests organizations prioritize skill adjacency, upskilling, and development to build a future-ready workforce, rather than filtering out talent that doesn't meet their specific skills requirements at face value. This adaptable approach to trainability will provide greater agility and broaden the talent pool considerably.
To learn more, download the report now at https://lightcast.io/resources/research/the-rising-storm.
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About Lightcast
Lightcast provides trusted global labor market data, analytics, and expert guidance that empowers communities, corporations, and learning providers to make informed decisions and navigate the increasingly complex world of work. With a database of more than one billion job postings and career profiles, our team provides best-in-class customer service with robust data, clear analysis, and expert guidance on skills, jobs, and opportunities. Lightcast is active in more than 30 countries and has offices in the United States, United Kingdom, Canada, Italy, New Zealand, and India. The company is backed by global private equity leader KKR. For more, visit lightcast.io.
Press contact: Cara Christopher, media@lightcast.io
