How corporate America is actually solving the labor shortage

Increased immigration, longer life expectancy, and declining birthrates are reshaping the U.S. labor force in two important ways. There are far more people of color and workers over the age of 55 among the people driving this country’s economy than there were four decades ago.

And this diversity will continue to grow in the coming years, economists predict.

According to the Bureau of Labor Statistics, the share of U.S. workers who are not white, Hispanic, or both nearly doubled to about 40% in 2019 from about 23% in 1979. As more seniors remain economically active, more than 37 million U.S. workers are now 55 and older. They make up nearly 1 in 4 of the 160 million Americans in paid employment. In 1979, less than 1 in 7 US workers were in this age group.

The government’s Bureau of Labor Statistics predicts that the ranks of older workers will continue to grow, including people well into their golden years. Between 2020 and 2030, the number of Americans who will remain 75 and older will nearly double, while the total working population will grow by just 5.5%, according to the bureau.

The proportion of white workers will have decreased to 74.7% by 2031 from 77% in 2021, the office predicts.

The agency also tracks the prevalence of Hispanic workers who may identify as white, black or mixed race. It says the share of such workers will rise to 21.5% of the workforce this decade from 18.3% – up sharply from 12.1% in 2001.

How are US employers responding to these changes?

I am a sociologist who studies how racial and gender inequality persists in professional occupations. One possible consequence I hope to see is employers being forced to do a better job of attracting and retaining underrepresented and older workers through diversity, equity and inclusion efforts.

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Diversity initiatives are already widespread

It is already very common for employers to undertake diversity, equality and inclusion measures. A 2019 survey of 234 companies found that nearly 2 in 3 employed diversity managers.

Their duties can be very different. Some examples include creating a culture that values ​​and welcomes diverse employees, as well as increasing the number of employees who are underrepresented in a given field.

In finance, that could mean bringing in more female, black and Latino analysts. In nursing, that could mean attracting more men of all races to a profession still dominated by white women.

In these and other areas, culture change may mean collecting data on which workers are underrepresented, trying to fill any gaps that are discovered, or revising dress and grooming codes that prohibit black workers from wearing hairstyles more often.

2 common but ill-conceived strategies

Unfortunately, many companies use diversity strategies that have not been proven to work.

These may include mandatory diversity training, often in the form of professional webinars or workshops with interactive exercises.

Diversity training is supposed to help people work and interact better with colleagues and clients from cultural backgrounds different from their own. But it often fails.

One complication is that employees resent feeling controlled.

Another is that they may see this mandatory training as a waste of their time. And there is evidence to suggest that it can even be counterproductive, reinforcing rather than challenging stereotypes and alienating black workers.

Another strategy that is more common than it should be is the use of skills tests that job applicants must pass as a condition of employment. For example, in technology, a skills test might mean asking applicants to solve a specific problem so that hiring managers can objectively assess their skills as well as their ability to work cohesively with a team.

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The problem with skills tests is that hiring managers often interpret the results of these tests differently for black and white employees because of various biases, some of which they may not be aware of.

Recent research also shows that none of these popular approaches lead companies to make their workforce more racially diverse through hiring practices.

I believe employers use these strategies anyway because they are simple, widespread and popular. Companies can continue to use what they have used in the past rather than trying something new.

Fortunately, new research points to more successful strategies.

Which seems to work better

Employers can respond to the demographic realities of today and tomorrow by changing the way they hire. They can start by recruiting more staff from historically black colleges and universities and Hispanic-serving institutions.

A promising strategy to help retain employees of color is to develop mentoring programs that are open to all rather than by invitation only. In this way, implicit bias does not exclude employees of color.

Companies can also implement what is known as ‘up-skilling’.

Employees in upskilling programs try out different roles in the organization. This strategy helps develop the skill sets of underrepresented employees and connects them with managers who might otherwise overlook them.

Aging workers and those coming of age

The aging of the labor force is particularly pronounced in some sectors of the economy. In 2022, the median age of a US worker was 42.2 years, for bus drivers it was 55.6 and for librarians 49.9 years.

The predominance of older workers in these jobs means that some employers will have to consider what these workers need in order to retain the staff they need.

These changes could include the introduction of phased retirement options, that is, allowing workers to gradually transition from full-time work to part-time work for several years before retiring completely.

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It is also a good idea to strengthen measures that protect these workers from age discrimination, which is common despite being illegal.

Older workers are often ridiculed, harassed and bullied. They also get raises, promotions and other opportunities.

But employers shouldn’t adjust their expectations to meet only the needs of older workers. An increasing number of workers under the age of 40 are also making their own demands.

These workers, especially those in their 20s and 30s, are more open with their bosses about their work-life balance preferences than their counterparts in their 50s and older.

Many workers in their 20s and 30s reject a work model that requires them to be on-call and available at all times, requires inflexible schedules, and places ever-increasing demands on employees. They want a job that allows them to be more fully involved in family and leisure activities.

Employers may not have alternatives

Ultimately, a more diverse workforce in terms of age, race, and ethnicity may force employers to change at least some of these.

As workers born after 1990 age, employers may have to try harder to accommodate their preferences, especially as they replace older workers who retire or transition to part-time work.

Whether by design or necessity, I believe that employers will hire a more racially and ethnically diverse staff. Also, I predict they may have no choice but to allow their employees more flexibility and freedom.

Adia Harvey Wingfield is a professor of sociology, arts and sciences at Washington University in St. Louis.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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