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People just don’t want to work anymore, you know? Rather stay home and suckle the government’s teat, am I right?
No, that’s not right. And if you were shaking your head yes to the above, then you’re probably not going to like what’s next.
Hiring staff is going to keep getting harder for…well…only the rest of your working life.
And no, it’s not because people are lazy and just want to stay home.
2020 was a landmark year in workforce numbers.
Yeah, the pandemic happened, but that’s not actually what I’m referring to. What happened in 2020?
I was listening to the Empire Builders podcast, hosted by my friends Stephen Semple and David Young, when I learned this. In 2020 the number of people leaving the workforce was about equal to the number of people entering the workforce. (Workforce equilibrium)
That’s the first time in 70 years that’s happened. Historically, every year, there are more new workers entering than the number leaving.
Did the pandemic cause this phenomenon? No, it didn’t. I’ll give you this, though, the pandemic might have caused that tipping point to happen a little bit sooner. But it was going to happen anyway.
Oh yeah, did I not mention?
The 2020 workforce numbers were not a one-off pandemic fluke. It was a tipping point. Because of birth rates, for the next 30-40 years the gap of workforce entering vs. leaving will widen. That is, in the direction of, more will leave than will enter. (This is a Western problem. The East has its own set of issues.)
Which means the “shortage” of employees isn’t going away. Instead, it’s going to get worse.
What does this mean for the small business owner?
Two new business superpowers will emerge. I would start getting good at both.
1. The ability to attract and retain employees.
Hiring and keeping employees has always been important, but selection favored the employer. With more workers than available jobs, the last 70 years has kept power in the business owner’s hand. (Employees should be grateful to even have a job. So no complaining about workplace conditions.)
That’s getting turned on its head. Employers will need to be exceedingly grateful to have employees. Any kind of employee, not just the good ones.
If you’re a business owner, does the above paragraph irritate you?
If it does, don’t worry. Everything is cyclical. At some point, the power will shift back to employers. Until then, though, there’s no point whining about it. Be for what is and figure out how to attract and keep employees.
Automation will also play a key role in your future ability to scale. Even if you’re good at keeping employees, you’ll likely still need to utilize robotics and AI.
The good news?
We’re just now starting to feel the pinch. Which means not being good at the above two skills is not a deal breaker…yet.
This is the early warning.
Use the time left to plan, implement, and overtake your sleepy competitors.
– Zac Smith, VC
Hard to get good help?