As we round out the second year of the pandemic, two phrases keep popping up in business media reports: “the Great Resignation” and “the Great Migration.” The framing is appealing, but neither portrays the whole picture.
The Great Resignation story is backed up with data: Worldwide, 41% of workers plan to leave their jobs this year. There are record-breaking numbers of job openings in many countries.
Deloitte points out that occasional worker shortages aren’t unusual. But what’s different in 2021 is that perceived labor shortages are coinciding with elevated unemployment rates. In Europe, the pandemic has heightened existing shortages in fields such as healthcare and IT.
The World Economic Forum says it’s less a labor shortage than a shortage of good opportunities. Workers in service industries shut down during the pandemic might have retrained for new jobs and are no longer tempted by positions that pay just above minimum wage.
The Great Migration narrative tells a story of people who fled expensive cities during the pandemic for cheaper living in the countryside or in small towns. If your job allows you to work from anywhere, why wouldn’t you choose a place that’s more peaceful and less crowded?
But real estate consultancy Knight Frank says we declared “the death of the city” too quickly. Globally, urban home prices increased by 5.6% on average in 2020, up from a 3.2% increase in 2019 and outpacing their respective country’s averages. Though apartment rental prices dropped by an average 15% in London’s Canary Wharf, for example, new tenancies jumped by 58% during the pandemic.
And of course, the ability to work remotely from anywhere in the world applies mostly to knowledge workers. Many essential workers — especially ones in rural areas — are unlikely to be able to work from home: medical professionals, factory workers, service providers and public utility professionals. The divide between people who can work remotely and people who must show up to work is likely to deepen as technology further automates many service industry and manufacturing jobs.
Talent and job openings are not necessarily in the same places, especially after pandemic migration.
I think the current labor shortages are largely an issue of place — talent and job openings are not necessarily in the same places, especially after pandemic migration. While people fleeing the city for the country might be mostly hearsay, there was indeed a massive exodus of foreign workers from their guest countries during the pandemic, and that recovery could take months, if not years.
Part of fixing the talent shortage is increasing wages, plain and simple. Workers in essential jobs that must be done in person have realized they hold more power than ever before. And the other part of the labor shortage solution is hiring talent regardless of location. Cities and regions previously left behind are coming up with creative solutions to tackle the problem themselves.
Some U.S. cities are coming with Wall Street-style sign-on bonuses for government jobs: Joining the police or fire department in Albuquerque, New Mexico, banks an extra $15,000, and new emergency operators in Tulsa, Oklahoma, are getting $2,000 for signing on.
Rural areas and smaller cities that have seen population declines in recent years are seeing an opportunity to turn things around. In Japan, some rural areas are embracing the workation trend, catering to employees from big cities who want a change of scenery.
A number of U.S. cities are paying people with remote jobs to move. Morgantown, West Virginia, offered potential residents $10,000 and a mountain bike to stay for a year — with a $2,000 bonus if they stay a second year. The program organizers reported 7,500 people applied to be one of the first 50 new neighbors.
The pandemic has changed how we work and how we get paid, but the longest-lasting impact will come from where we work. Employers are embracing remote and hybrid work at never-before-seen levels, and skilled workforces are finding opportunities across borders. The question for employers now is: Where are you willing to meet your talent?
Read more
Sign up to keep up to date with ReThink Q.