Several weeks ago, while catching up with a favorite colleague, Greta Creech, Ph.D., we began discussing the labor shortage and its impact on hiring throughout the nation. More specifically, we discussed how the labor shortage had affected Woven Legal clients. In the past few weeks, an influx of attorneys came to us for help when their traditional recruiting methods failed to fill their prolonged paralegal vacancies. I wondered aloud if some of the reports in the news were true stating that extended unemployment benefits were primarily to blame for the labor shortage. Greta replied candidly, “It’s just not that simple, Meg.”
Greta, who has her Doctorate in Leadership and Organizational Change, as well as an impressive career with the National Geospatial-Intelligence Agency, where she worked in Washington D.C. for 13 years as an analyst, approached the issue from an angle I had not considered. She went on to say, “Over 600,000 people died of COVID in the United States, many of whom were employed before contracting the virus.” Despite often reading this number – 600,000 US COVID deaths – I failed to look at the ripple effect. I was taken aback! Digesting this information further, I was about to ask, “Wait…the large majority were Senior Citiz…” when Greta said, “While many people point out that the large majority of COVID deaths were Senior Citizens, not all were. And, how many of those Seniors were still employed?” My colleague was way ahead of me. As we continued to discuss the issue, more questions and possible solutions arose. To answer these questions it was clear some research was needed. The results of that effort continue to surprise me! Greta had been right; the hiring bottleneck which exists today does have several contributing factors. This week’s blog post, US Labor Shortage Part 1, seeks to share what is possibly causing the labor shortage. Our next post (in 2 weeks), US Labor Shortage Part 2, will focus on sharing tips to continue attracting top talent and beating out the hiring competition.
PART 1 – US Labor Shortage Explained
People choosing not to go to work is not a new thing
There are, of course, cases in today’s labor force of people deciding not to get jobs due to legitimate reasons or, sure…because some are LAZY and just don’t want to work. But, this is not new. Historically, our country has always had some people that resisted going to work. However, experts are seeing that the numbers in this group have grown and are significantly higher, especially since unemployment is remaining at 5.9 % post-COVID vs. 2019’s average of 3.9% pre-COVID, further exacerbating the slow and unfruitful recruiting efforts our clients described.
It is also important to note that the U-3, the unemployment rate most frequently cited, considers individuals who are not employed and actively seeking a job (determined by the number of people who have actively filled out a job application in the preceding month), not individuals who have dropped out of the workforce due to issues such as childcare needs, caring for sick family members, and those who have decided to start their own business. So while the unemployment rate is a useful metric to track, it doesn’t paint the complete picture. There are many reasons people might not be participating in the workforce but not being counted in the unemployment rate, which is a big part of what is driving the ongoing labor shortage.
Pre-COVID Employment Landscape Population decline
It’s generally accepted that the US population has been declining over at least the past decade. Our parents and grandparents did their part to contribute to the labor pool which, until recent years, could be relied on to support business and economic growth. Veterans returning home from WWII spurred the baby boom. Also, softer immigration policies were put in place, particularly during the ’80s and ’90s, creating a long-term labor pipeline ready to meet the demand for employers seeking laborers. Our nation is still growing, but it’s at a much slower pace. The US population growth rate since 2000 is now half of what it was before the turn of this century. For comparison, today’s growth rate is almost the same (within .1%) as the growth rate the US saw in early 1941 – shortly before the bombing of Pearl Harbor and after eight years of crippling poverty during the Great Depression. It’s clear these choices (smaller families and crackdown on immigration) are affecting – and will continue to affect – America’s workforce, possibly prolonging the workforce deficit of today.
As you may know, CDC data on their website shows COVID-19 has claimed more than 607,000 US lives since the pandemic arrived here in Q1 of 2020. While the majority of deaths from the virus did occur among Senior Citizens, some of those Seniors were still working. Unfortunately, there is no solid data yet, to my knowledge, to know specifically how many Seniors who died were still employed. But, an AARP article written in 2019, prior to the pandemic, stated that 20% of US adults over 65 were still actively employed.
Interestingly, half of the seniors comprising that 20% still working possessed advanced education – a common requirement for law firm employees. And, yes, you statisticians out there may say that’s a big leap but, judging from personal experience alone, many small firms I call on here in Atlanta have employed quite a few “silver staffers” to lend their extensive experience to support more junior attorneys. Furthermore, the CDC’s website reports the number of US deaths due to COVID which occurred in people between 18 – 74 years of age – hypothetically the ages in which people may have been part of the nation’s workforce – is almost 260,000. Certainly, one can imagine the abrupt loss of that many people is likely contributing to our US labor shortage.
COVID’s Ongoing Repercussions and Long Haulers
We know from additional CDC and WHO data that the death rate for those contracting the virus (averaging based on total combined ages. See specific mortality rates for segmented population based on age HERE) for the average person in the US is only about 2-10%. The data has also shown that most people who contract the virus successfully recover. But, not everybody recovered fully, resulting in a group of people who deal with ongoing, sometimes disabling symptoms from the virus. This group, known as “Long COVID” or the “Long Haulers,” are resistant to resume steady employment because their symptoms are unpredictable and most likely would impact their job performance. So, taking a chance to accept a job only to realize they can’t do the work when symptoms arise again would either result in quitting (and forfeiting unemployment benefits) or getting fired. This again means fewer people willing to apply to the many open positions.
Recently, the new Delta variant that has emerged is proving to be uniquely impactful to our nation’s most concentrated employable ages – individuals under 50. Delta is more easily contracted (2.5 times that of the initial virus strain seen at the outset of the pandemic) and is spreading with some speed amongst the unvaccinated. Rising infection rates are fueling renewed trepidation to return to work – just when the nation had hoped fears were being assuaged with the arrival of Summer, declining infection rates, and ongoing efforts to administer vaccinations.
COVID Lockdown: Time for Reflection
March and April of 2020 saw 22.2 million Americans lose their jobs when the pandemic prompted the unprecedented shutdown. For some, this forced recess provided a rare opportunity to reflect on their work and imagine a different way of life. Before the pandemic, numerous polls indicated that despite 70-85% of US employees hating their jobs, workers remained in place rather than seeking change due to fearing the unknown. COVID removed that fear, and employees began to consider what their lives would be like if they were no longer stuck at a desk in a brick and mortar office, for example, or wasting hours in a long commute. The outcome of this period of reflection is candidates who now appear to be applying heightened selectivity, holding out for positions offering flexibility, decreased stress, or a healthier work environment.
Law School Enrollment Up
Economic uncertainty often causes an increase in college and graduate school enrollments. However, that is not the case according to a June 10th article by NPR explaining that undergraduate and even graduate school enrollments are down 5% from last year – which was already low due to COVID. That is 727,000 fewer students pursuing higher education.
Yet, law school applications are flooding in at record numbers. Some speculate that because our country has experienced great social and political unrest in the past 2 years (George Floyd, nationwide incidence of rioting, the right-wing attack on the Capital, a contentious election, etc.) the turmoil served as a catalyst for people seeking to contribute to future solutions by pursuing law school in 2021. According to the Law School Admission Council’s statistics, there has been a 56% rise in total law school applications over last year and Law.com reported the number of applicants is the highest it’s been in a decade. And, while this will likely produce new law firm employees in the next several years, right now, it doesn’t help the already depleted talent pool available to those firms seeing a dramatic rise in their caseload.
Retaining and attracting talent is always a challenge businesses face. The labor shortage is only exacerbating this issue. For many employees, it’s a chance to start again, find work that better suits their scheduling needs and companies with strong, supportive cultures. For employers, it’s a chance to focus on clearly defining workplace needs and look for creative solutions. In two weeks, we will put out Part II where we discuss many ways to attract and (just as importantly) retain top legal talent.