6 Key Factors Creating Labor Shortages

Everywhere you look you see signs for open positions or roles available, increased numbers of job postings on LinkedIn, and people looking for new opportunities. So why then does it feel like it’s impossible to find the right talent? Being unable to fill roles isn’t a new challenge. We’ve been talking about the war for talent for years now. So, what has changed, making it harder to find help across almost all industries?

Historically, we’ve attributed staffing woes to things like:

  • Record low unemployment
  • Baby boomers leaving the workforce
  • Mismatched skill alignment between baby boomers and millennials/Gen Z
  • Lower number of H1-B visas, and the elimination of quick-processing practices
  • Increased number of people moving to flexible arrangements

While none of these factors have disappeared, the pandemic introduced its own set of challenges, making it even more difficult to find talent across various industries. Here are six new impediments that are contributing to today’s labor shortages:

(1) People Re-Evaluating Their Priorities

People are no longer willing to accept roles that they dislike or are not passionate about. An Indeed survey of people who have left their job voluntarily in the past two years found that the most common reason (92% of responses) was the “realization that life is too short to do a job that they’re not passionate about”.

(2) Childcare Opportunities and Changes

During the pandemic, many parents had to take on additional childcare responsibilities. According to a senior economist at Glassdoor, childcare-related obstructions to employment have been one of the more persistent factors post-pandemic. Even if parents, mainly women, want to return to the workforce they do not have the opportunity to.

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(3) Growth in Personal Savings 

Individuals were able to save roughly four trillion dollars in 2020/2021 through stimulus packages, increased unemployment benefits, and decreased spending during the pandemic. This has allowed workers to reskill and enter the workforce in new roles or postpone their return to employment while funds remain.

(4) Record Self-Employment

There have been a record number of workers entering self-employment in recent years. Specifically, there has been a 6% increase in self-employment since early 2020.

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(5) Earlier Retirement

As previously mentioned, baby boomers were already leaving the workforce in the years prior to the pandemic, and this process only sped up once working expectations changed and health concerns increased. According to Goldman Sachs, 2.5 million of the 5 million workers missing from the labor force are retirees, and 1.5 million of them are early retirees.

(6) Incorrectly Implemented Automation 

The human touch is essential when incorporating automation into your hiring practices. While automation can be great, if not implemented correctly it has the potential to create biases and reduce your visibility of the number of potentially suitable workers. For example, organizations could be unnecessarily excluding individuals based on education requirements or gaps in employment. 


While, yes, there may be jobs available, there is an overall mismatch between the roles that are available and the talent available to fill them. With new generations entering the workforce and workers either voluntarily or involuntarily remaining out of the workforce there isn’t an easy way to fill open positions. Thankfully, there are strategies emerging that will help organizations overcome these challenges.

To learn more about the strategies we recommend to overcome sourcing challenges, check out our recent webinar with Human Capital Institute, “4 Pandemic Workforce Trends That Are Here to Stay.”



Meet the Expert
Nikki Williams – Marketing Brand Manager

Nikki Williams is responsible for marketing strategy and implementation for VectorVMS. In her role, she helps contingent workforce professionals discover the value of a vendor management solutions through blogs, webinars, conferences, and more. Her goal is to ensure these professionals can quickly find answers to their questions about VMS technology. Nikki has more than 10 years of experience as a marketing professional for technology, including human resources technologies as well as leadership and organizational development services. Connect with her on LinkedIn.