Every day is something new at Next Stage. We are in such a unique position to be proximate to the leaders and institutions wrestling with all aspects of social impact across issues like healthcare, housing, education, workforce and the environment.
As a lifelong learner, I love this aspect of my job. When we partner with nonprofits, companies or municipalities, our team gains insights into ‘how things run’ which helps to illuminate a larger system of interconnectedness. Nothing is ever in a silo.
Sometimes these conversations shed light on an approaching crisis that has the potential to have devastating effects. Such is our recent exploration of the workforce talent shortfall – an existential threat to society that frankly has us all a little freaked out.
The Silver Tsunami
We have known for a long time about a looming disaster. I first heard the phrase ‘the Silver Tsunami’ more than a decade ago, which referred to the aging of the Baby Boomer generation. At the time the phrase was coined, concerns for housing and health care topped the list. With an unprecedented number of older adults living for much longer than previous generations, concerns for funding Medicare and Social Security dominated discourse.
These days, the phrase has taken on a new level of importance as people retiring from the workplace are leaving behind a significant talent shortfall – one that could, as reported by Korn Ferry back in 2018, “cost nations trillions of dollars in unrealized annual revenues.”
Added to this, what was called ‘the Great Resignation’ at the start of the pandemic has evolved instead into what Fast Company coined as ‘the Great Reprioritization’ – a fundamental shift in how workers are choosing to earn a living. It has led to a whole host of challenges impacting every industry and workplace.
The Great Repriorization is hitting retail and the service sector particularly hard, and is a contributing factor to the current levels of inflation. Your favorite restaurant or dry cleaner is likely holding on by a thread as increasing labor costs make it difficult to generate a profit. It is also being deeply felt in all the skilled professionals and trades, including construction, HVAC, plumbing, nursing and information technology.
But if we knew workforce shortages were coming for so long, why does it seem like business and civic leaders are only just now really taking it seriously?
A talent shortfall with a myriad of factors
A key report that has greatly influenced Next Stage’s work is The Demographic Drought: Bridging the Gap in our Labor Force from Emsi Burning Glass, one of the world’s leading authorities on job skills, workforce talent and labor market dynamics.
The underlying drivers of the global workforce shortage are fairly simple to understand – “fifty years of birth rates below replacement levels, combined with a recent precipitous drop in immigration, has left us with fewer and fewer young, working-age people.” The labor pool is aging and there are fewer young people to fill the roles left behind by those exiting the workforce.
But if this was previously thought of as a decades-long trendline, the pandemic was a big catalyst of speeding things along. Next Stage has taken to calling it a ‘trumpet flare,’ exacerbating already existing workforce gaps. The slow unfolding of a generational trendline of workforce shortage skipped ahead considerably as COVID-19 disrupted the status and shut down traditional workplaces globally.
Baby Boomers still in the workforce saw an easy exit as workplaces opened up again against the backdrop of healthy retirement investments, electing to retire rather than come back to work. Meanwhile, Millennial and Gen-Z employees saw an opportunity to reframe the arc of their careers, revisiting the ‘gig economy’ they embraced during the worst of the Great Recession while insisting on making the hybrid style of work a permanent feature.
The result? A challenge that will only get worse in the years to come if we don’t come together as communities to address it systemically. No one strategy or program is going to get it done in isolation – we must work together. And if we don’t, the consequences will be dire for all of us.
Solutions like Old Wine in New Bottles
As scary as the path forward is, the good news is that there are already some consensus approaches identified:
- Rise of automation – This one is a bit of a double-edged sword for those of us who work in social impact. Technology will certainly take center stage as we work to create less costly ways to get work done. The downside will be how automation will negatively impact front-line employees and low wage earners who are disproportionately minority populations.
- Increased skills training and economic mobility – As an upshot to the role technology will play, preparing for the work of tomorrow means driving economic mobility for disengaged populations. That means investing in skills training for typically divested communities. In fact, economic mobility is now viewed as an economic imperative – capitalism will only survive if we are able to build increased economic opportunity for those who are not just unemployed but also under-employed.
- Focus on new immigrant populations – One of the most surprising recommendations of the Demographic Drought report is a need for more progressive immigration policies that increase immigration into the United States at a time when it has been declining. As political as the topic of immigration has been in America, an increase in new immigrant populations is viewed as one of just a handful of must-happen activities to fuel future success.
In North Carolina, a focus on economic mobility and new immigrant pathways is old hat for those of us involved in social impact work. But what has changed are the stakes. These are economic imperatives, and the preservation of life as we know it is at stake.
That is some rich irony, isn’t it? That the key to “preserving life as we know it” for the American middle class requires addressing systemic wrongs and creating greater pathways to prosperity for those who have traditionally been left out and not invited to the proverbial table?
As a team that looks for win-wins to get stuff done, we’ll take it.
Written by: Josh Jacobson, CEO, Next Stage