Hiring crisis: How to bridge the talent gap

Struggling to find qualified staff to fill open positions in your organization? If so, you’re not alone. 

The US job market is facing a hiring crisis, with many employers simply unable to find enough people to keep their operations running smoothly. 

But what are the reasons for this crisis, and how does it affect businesses and the economy as a whole in the long run? We cover all this and more in this post.

What is a hiring crisis?

A hiring crisis happens when a significant gap forms between the demand and the available supply of skilled labor in the job market. It results in job openings that employers struggle to fill due to a lack of candidates. In fact, 48% of HR leaders say the skill shortage is the top threat to their business

Reasons for the hiring crisis 

What are the reasons for the current hiring crisis? Here are some main reasons for labor shortage in the US: 

Skills mismatch 

Skills mismatches occur when workers do not have the skills and qualifications required for open jobs. Many available candidates lack the required technical skills, digital literacy, or educational backgrounds that open roles demand. This disconnect only worsens hiring difficulties.

Expensive childcare facilities

Affordable childcare options are lacking in many areas, forcing parents to leave their jobs or reduce their work hours. In California, for example, the average yearly cost of infant care is 16,945 USD. Plus, many lower-wage workers and working parents dropped out of the labor force to take care of their children as schools and daycares closed when the pandemic started. 

Increase in entrepreneurship 

More and more Americans are striking out as entrepreneurs, launching 5.5 million new businesses in one year alone. The prospect of self-employment is especially appealing to younger generations looking to join the millions of people generating higher incomes. As more workers lean toward entrepreneurial freedom, their inclination toward conventional employment diminishes.

By the numbers: Hiring crisis statistics 

At the moment, there are 8.5 million job openings in the U.S. but only 6.5 million unemployed individuals. The unemployment rate is the highest in the leisure and hospitality industry at 5.8%. This is followed by wholesale/retail and professional/business services at 4.5%.

The U.S. Chamber of Commerce found several reasons why employees don’t want to work: 

• 66% of Americans who lost their jobs during the pandemic aren’t keenly looking for a job 

• 49% want only remote job options 

• 26% say that they never want to work, if possible 

• 24% percent say the government incentives they received during the pandemic are the reason they aren’t actively looking for a job 

• 36% of people between 25 and 34 years of age say they want to prioritize their personal growth before entering the job market

There’s also a significant difference between the number of open roles and filled positions. For every 100 vacant positions, there are only 76 job seekers available, on average. 

That said, some states are faring better than others. For example, California has 92 people available for every 100 open jobs, while Alaska has only 59.

10 solutions to overcome the hiring crisis 

Here are 10 solutions to address any staffing issues you may be experiencing during the hiring crisis.

1. Upskilling and reskilling

Seeking new hires isn’t the only solution to handling the hiring crisis. You can upskill or reskill your current employees to align their potential with your evolving business needs. 

Here are a few examples of how to train your existing team members:

• Internal career pathing programs: Map out clear skills progressions and provide training for existing employees to advance into new roles

• ​​Micro-credentials: Partner with online education platforms to offer skills-based certifications that quickly upskill employees

• ​​Mentorship initiatives: Implement mentorship programs where you pair experienced employees with high-potential mentees to facilitate knowledge transfer 

• ​​Job shadowing: Provide opportunities for employees to job shadow and rotate through different roles

• Cross-training: Cross-train existing team members for more skill coverage and to make lateral career moves

2. Offer better compensation and benefits 

Competitive compensation is a powerful incentive for attracting top talent. Benchmark salaries, stock options, and benefits regularly against industry standards to remain as a competitive business for job seekers.

Beyond salaries, you can also offer signing bonuses and loan repayment assistance programs. A global HR partner like Remote can even help you create a strategy for global compensation to find international talent.

3. Provide childcare access  

Many working parents are forced to leave the workforce because they lack affordable and accessible childcare. To counteract this, prioritize family-friendly benefits and policies like the following:

• On-site childcare facilities

• Childcare subsidies or stipends 

• Partnerships with local daycares 

• Paid parental leave

• Flexible scheduling to help balance work and family needs

Childcare assistance shows that your organization is committed to providing a positive experience for working parents. With afforable childcare, more primary caregivers can participate in the workforce while your organization has a wider talent pool to choose from.

4. Onboard employees through second-chance hiring   

Second-chance hiring is an inclusive hiring practice that offers employment opportunities to people who have trouble entering the workforce. With second-chance hiring initiatives, you can provide employment to people with disabilities, face poverty, or that come from other marginalized backgrounds; these individuals can prove to be a valuable asset for your team.

5. Collaborate with educational institutions   

Forming partnerships between employers and educational institutions, like community colleges and universities, can help create job-ready potential candidates. Also, apprenticeship and co-op programs provide direct pathways for students to gain practical experience. 

Advisory councils with industry experts can offer feedback to shape course materials. This means you can get valuable hires that do not require extensive training.

6. Hire freelancers and contractors    

During times of high demand for talent and low supply, companies often struggle to fill full-time positions quickly. If you find yourself in this situation, consider taking on freelancers, consultants, or contractors. 

Freelancers or contractors come with specialized or niche skills required for a specific task, plus you can onboard them quickly compared to full-time employees who need comprehensive training. Just be aware of misclassification and co-employment risks to make sure you are hiring compliantly.

7. Come up with retention strategies    

Prioritizing employee retention and engagement in your organization is cost-effective. Key tactics that you can adopt include the following: 

• Focus on work-life balance and mental well-being initiatives

• Offer performance bonuses, profit-sharing, and perks to increase employee engagement

• Design formal and informal programs to reward outstanding performance, contributions, and achievements

• ​​Encourage regular feedback sessions to understand and address employee issues so that your workers feel heard

8. Implement transformative leadership 

Transformative leadership inspires teams through integrity and innovative thinking. Competencies like adaptability, creativity, and emotional intelligence help you ‌support employee performance through influence rather than authority alone.

Leaders who cultivate a positive, purpose-driven culture are often able to hire talent better than their peers. Plus, their ability to share a compelling vision keeps employees engaged and loyal, even during difficult times.

9. Hire veterans 

Veterans bring a unique set of skills and experiences. Many have leadership abilities, discipline, and thrive in fast-paced, high-pressure environments. Plus, their service backgrounds mean they often have strengths in problem-solving, strategic thinking, and teamwork. You may want to offer resources like skills training and mentoring so that veteran hires can easily transition to civilian careers.

10. Offer flexible working arrangements 

Remote hiring helps companies access a broader pool of qualified candidates unrestricted by geographic barriers. A hiring crisis becomes irrelevant to companies that can onboard employees regardless of location.  Parents, digital nomads, or those with disabilities or mobility issues — you can ask anyone to join your global workforce.

Trends in the US workforce 

The labor force participation rate is estimated to drop to 60.4% by 2030, nearly 3 percentage points below pre-pandemic levels. This could indicate a persistent worker shortage crisis in the coming years.

Another trend we can see is a more racially and ethnically diverse U.S. workforce. Diverse Americans are projected to account for 50.3% of the population by 2045. ‌Hispanic workforce participation, in particular, may rise to 30% by 2060 due to higher labor force participation and birth rates. 

A roadmap to workforce success 

While the current staffing crisis presents challenges, there are a number of tactics you can use to overcome them. By cross-training existing talent and embracing flexible alternatives like remote work, you can build resilient teams.  

If your company is offering remote or hybrid work, use Remote Talent to attract top international candidates. You can access the data you need to make competitive offers to remote candidates in other countries to stand out as a top employer to overcome the hiring crisis.

Sign up for Remote Talent today to build and manage your global team. 

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