If you’re among the more than 14 million people over the age of 16 trying to find a job, you might be feeling frustrated. You might have put your resume and application in dozens of times, and still have nothing to show for it. There are more than 3.2 million of you who have been looking for a job for more than six months. That’s a long time without a paycheck.
More than half of business owners say finding employees is the number one problem faced by companies in the coming months.
At the same time, if you are a business owner – particularly a small business owner – you’re likely feeling frustration of your own. You want to hire someone – you need to hire someone – but you’re not finding the right person. More than half of business owners say finding employees is the number one problem faced by companies in the coming months. No workers is not good for business.
There is definitely a disconnect here, one that has been brewing for some time.
Even before the global health pandemic disrupted our economy, the way we work was changing at a rapid pace. New technology in the workplace – from the factory floor to the retail store to the office – required new skills from employees and job seekers. The pandemic didn’t slow down the changes; it sped them up. It also exposed some underlying barriers and challenges to employment that continue to reverberate throughout our economy.
Now, 19 months in, there are a record 10.9 million open jobs around the country, with a huge demand for workers in health care, finance, hotels, and food service. At the same time, there are 8.4 million people out of work and looking for a job. There’s also another 5.7 million people out of work and who say they want to work but have not been looking for various reasons.
The numbers indicate there are more than enough jobs to go around for everyone who wants one, and then some. So, what’s the problem?
Work Has Changed, So Too Have Skills
COVID-19 accelerated changes in technology. What was expected to happen over several decades happened in just months, represented in three broad trends: remote work, e-commerce and automation.
“Many companies deployed automation and AI in warehouses, grocery stores, call centers, and manufacturing plants to reduce workplace density and cope with surges in demand,” explained a McKinsey Globel Institute report. More sophisticated, automated machines and tools need a more skilled workforce to maintain or run them.
This quickening of workplace adaptation creates a demand that the talent pipeline can’t keep up with. Many businesses are tackling the problem head-on, and internally, contracting with outside training providers to set up in-house training to develop the talent with the skills they need to get the job done.
The Hidden Workforce
Businesses are leaving talent on the table. “Companies are increasingly desperate for workers,” but as many as 27 million American workers and job seekers remain “hidden” because employers are using AI-powered applicant tracking systems to screen candidates, according to a new report from Harvard Business School.
“We framed the phrase ‘hidden worker’ because the processes that companies use – and the way they implement them – have the effect of screening out a large number of people from any kind of active consideration for a position,” the report’s co-author Joe Fuller recently told me on my Work in Progress podcast for the nonprofit WorkingNation.
Ninety-nine percent of the nation’s biggest companies access job applications via screening software, and they set filters that can either keep a person in the candidate pool or exclude them, according to Fuller. “A a filter is, does this person have a college degree? If so, then they stay in the pool. A more subtle one is that almost half of U.S. employers will use what’s called a ‘continuity of employment filter’ that says if someone has a gap on their resume of more than six months, exclude.”
Job candidates that are 80 to 90 percent of the way to being qualified are falling out of the candidate pool because they are being evaluated by a machine instead of a human being.
Job candidates that are 80 to 90 percent of the way to being qualified are falling out of the candidate pool because they are being evaluated by a machine instead of a human being, said Fuller.
Employers need to realize the depth of the talent pool of those with high school diplomas, but without college degrees, Shad Ahmed, COO of nonprofit [email protected], which champions the hiring of workers without a college degree, pointed out.
“A generation ago, you could have an entry-level job in sales and that could be your gateway to a great middle-wage job today. Those entry-level jobs in sales are called sales account representative roles, and 80 percent of those have a degree requirement,” he continued. “We’re putting up structural barriers that are shutting out many workers from even getting into those first entry-level jobs.”
Midcareer Workers Face Age Bias
You may be surprised to learn that almost half of the long-term unemployed – people out of work for six months or more – are 45-year-old or older. Age bias plays a big role in this, according to the Meeting the Midcareer Moment report from Generation, a nonprofit that trains workers of all ages for today’s workforce.
CEO Mona Mourshed said when hiring managers look at older job applicants – no matter how experienced – they wrongly see someone who isn’t tech-savvy, isn’t adaptable and who won’t fit into the company culture. “These perceptions of midcareer workers are putting them at the bottom of the pile when it comes to hiring,” said Mourshed. “Long story short, employers see the age 45+ population as having absolutely no strengths relative to those who are age 18-to-34 or 35-to-44.”
Job seekers between the ages of 35 and 44 are most popular with hiring managers, according to the survey. “That’s the sweet spot. They’ve had enough experience, but employers still view them as being nimble and creative. This for us was one of the most stark findings of the report. It really puts a number on ageism.”
The Generation report argued that we are at a crossroads: ”If we choose to recognize the talents of this group and help them adapt to workplace disruptions, we can prosper together. But if we stick with the status quo, a bad situation will only get worse.”
Johnny C. Taylor, Jr., president and CEO of SHRM, the Society for Human Resource Management, agreed in a recent interview.
“Ageism is one of the biggest, most tragic forms of discrimination in the workplace. We have to address that head on and sensitize people (and hiring managers) to the fact that one day you too will be 50, and therefore you have to, 25-year-old, understand that this is in your best interest to change the narrative and the way that people think about it.”
Taylor goes on to say it is up to CEOs like himself to establish that diversity, equity, and inclusion isn’t just about race, gender, or national origin; it also includes age. “We’ve got to broaden the definition so that it encompasses everyone. Opportunity for all. It starts with the CEO and boards, we’ve got to say, diversity is not a program and an initiative, it’s the way we do business here.”
Working Mothers Are Staying Home
The pandemic hit working women harder than working men, knocking 12.2 million women out of the labor force between February and April in 2020. As employers started adding back jobs, many women returned to work from layoffs or found new jobs. But not all of them. This summer, the percentage of women over the age of 20 who are working hit a 30-year low – 57.4 percent compared to 59.2 percent in February 2020.
Women are grappling with many of the same issues and hard choices as men. Their original jobs are gone or have changed because of as businesses implemented more technologies and efficiencies in order to stay viable. Job seekers also are worried about the continuing risk of exposure to evolving variants of the coronavirus, especially in public-facing jobs.
For mothers who want to rejoin the workforce, there is another big challenge added to the mix: finding reliable and affordable childcare.
For mothers who want to rejoin the workforce, there is another big challenge added to the mix: finding reliable and affordable childcare. Historically, women have handled much of the housework and caregiving in the home, even while working full time, and during the pandemic, mothers took on an even greater load as school districts shut down physical locations in favor of remote teaching.
Childcare is expensive. In Los Angeles, for example, day care for infants and preschool children can cost as much as $16,000 a year. That can make it financially untenable to return full time to the work force for many working families who then choose instead to have one parent remain home.
At the same time, four out of five childcare facilities say they’re having a hard time finding enough workers with childcare professionals expressing their own concern that they will be exposed to coronavirus from unvaccinated kids or coworkers.
Workers Are Rethinking Their Priorities
Workers are in the driver’s seat. They are leaving the workforce in search of better opportunities and benefits—11.5 million in late spring and early summer. They want better pay and more flexibility, and they have had a chance to reevaluate what is most important to them in their job and care. They want a sense of purpose and dignity.
When it comes to pay, it is a case of supply and demand and who has the advantage in the marketplace. Right now, the demand is much greater than the supply, so job seekers can hold out for more wages and benefits before taking a job that might not be one that they really want.
That brings us to the matter of flexibility, and that brings us back to where we started – changes in how we work. At the height of the pandemic, more than a third of all jobs were being done remotely. Many workers – particularly those in so-called knowledge-based fields – were able to do their jobs from home and found it helped their work-life balance, particularly in the midst of the health care crisis.
They don’t want to go back to the old way of working. A survey from PwC found that 83 percent of employees who worked from home last year would like to do so at least one day a week after the pandemic, and 32 percent said they would prefer never to go to the office at all.
The percentage of jobs allowing remote work has dropped dramatically since the first months of the pandemic to just around 13 percent. This is making it harder for businesses to hire. The most recent Beige Book from the Federal Reserve said that businesses across the country are noting a “persistent and extensive labor shortage,” forcing them to use “bonuses, training, and flexible work arrangements to attract and retain workers.”
SHRM’s Johnny Taylor noted the relationship between employer and employee works both ways. “When I think about work and the importance of work, a phrase comes to mind – mutual benefit. At the end of the day, work doesn’t work when it’s only good for the employer. And by the way, it doesn’t work when it’s only good for the employee.”
He added that the concept of mutual benefit in work is tied to the sense of dignity and a sense of purpose for an employee. “There is dignity in work, and we know that when people are out of work forcibly, it literally changes the person that you are. It’s not just enough to have a job. But to have a good job, one where you bring your whole self to work.”
“Our sense of ourselves, as well as our sense of others, has to do with the kind of work we do and whether it not only rewards ourself and fills our soul, but whether the people around us esteem what we do.” — Rabbi David Wolpe
As Rabbi David Wolpe of Sinai Temple in Los Angeles puts it, “When you have work that you feel good about, and feel is productive, that means that about a third of your life is taken up with something that you think is important and worthwhile. When you don’t, you spend almost every minute thinking about, ‘Why don’t I?’ And so, our sense of ourselves, as well as our sense of others, has to do with the kind of work we do and whether it not only rewards ourself and fills our soul, but whether the people around us esteem what we do.”
Ramona Schindelheim is the editor-in-chief of WorkingNation.