Manufacturing leaders consistently tell our team at IndustryWeek that attracting labor remains the biggest challenge in today’s market. So, I’ve been spending a lot of time looking at U.S. Bureau of Labor Statistics numbers, trying to make sense of the chaos.
You’ve seen the big trend lines—record numbers of people voluntarily leaving jobs in 2021, rising wages, historically low unemployment rates.
Names for the trend abound: the Great Resignation, Great Retirement, Great Renegotiation, Great Upgrade, the Great Big Headache for Talent-Seeking Manufacturers (I might have made up that last one). Various employment data imply that it’s a bit of all the above, but it’s not clear exactly what’s happening.
If this were simply baby boomers retiring, either because they’re reaching that age or because they’re at higher risk of severe disease from COVID-19, we’d expect to see the average age of a U.S. worker declining. That hasn’t happened. The average worker in the U.S. last year was 42.2 years old, down slightly from 42.5 years old in 2020, but 42.2 or 42.3 was the average from 2017 through 2019.
Also, there were nearly 900,000 more senior citizens (65 and older) working last year than in 2017. That figure was down slightly from 2019’s peak but well ahead of the previous several years. Seniors’ share of the job market has grown steadily throughout the turmoil of the past few years, rising to 6.6% last year from 6% in 2017.
So, maybe not the Great Retirement. However, workers are scarce.
There were roughly 5 million fewer people employed last year than in 2019, pre-pandemic. The bulk of the declines came from the middle of the age range: 25-34 and 45-54. So, the Great This Entry-Level Job Stinks and I Quit? Or the Great I’ve Got to Stay Home and Take Care of Kids Because Schools Went Virtual?
Neither exactly rolls off the tongue.
Tracking how old people are when they exit the workforce is important because it could influence how to get some back. People in their late 40s may respond more to flexible scheduling and more time off to deal with family emergencies. Those in their late 20s may prefer higher wages, paths to advancement or job security pledges.
Betsey Stevenson, an economics professor at the University of Michigan’s Gerald R. Ford School of Public Policy, says labor market churn is less about people leaving the workforce (despite that 5-million-person drop from 2019) and more about people leaving for better jobs—typically for more money, but not in all cases.
“Surveys show that workers are hungry for flexibility, better work-life balance and want to be able to retain opportunities to work from home,” Stevenson says. “Parents are particularly focused on being able to balance work with… spending time with their kids.”
Working remotely is exceedingly rare in manufacturing plants. That could change with automation, Industry 4.0 and other manufacturing technologies, but it won’t be easy.
Workers 35-54, prime candidates to be skilled employees and parents, make up 41.5% of the workforce (down from 42% a few years ago). It’s a group hungry for the right opportunities.
One lesson from the pandemic: men like their kids, too.
Work-life balance has long been stereotyped as a women’s issue. If that ever was true, it isn’t any more. Stevenson says men appreciated family time during lockdowns and don’t want to give that up to spend more time in the factory.
“Many men are looking to continue to be able to spend more time with their children,” Stevenson says. “Companies can better recruit parents by giving them more flexibility and control over their schedule and allowing some work-from home days.”
Manufacturers that use technology to enable people to work remotely or find other ways to give them more time with family will have an easier time recruiting. So, with the right tools, maybe what we’re seeing here is the Great Opportunity.
