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Workforce: A Lesson in Economics

The days of excess labor supply are gone. To be successful in hiring and retaining employees we must lead and manage differently.

Anyone else remember Economics 101 in high school or college? My professor was the stereotypical economics nerd. While the topics of bonds and the impact of interest rates on inflation made my extroverted head explode, I vividly remember the lesson on supply and demand. When supply is greater than demand, the price of the goods/services decreases. Flip the equation and when the supply is less than demand, the price of goods/services increases. We’re all living this reality from the price of gas, to building supplies, to housing – you name it, the price has gone up.

Employment Economics

This same theory applies to employment. 

In 1990 I was hired for my first professional HR position. My boss stepped into my office and asked that I file the 250 resumes of the people who applied for my job.  This was a subliminal message was, “if you screw up, there are 250 people who want your job.” I was grateful for this amazing opportunity and I did whatever it took to be exceptional in the role.  

Later, in the mid-90’s, we had the novel idea of an interview day. Literally 100’s of people showed up and we were completely overwhelmed. It was a high-class problem as the supply of workers far outweighed the number of jobs. 

Fast Forward to 2022

Today’s workforce (tenured and young) is a result of supply and demand. There are six able workers for every 10 jobs and not all six will choose to be in the workforce. The days of excess labor supply are gone. Sprinkle in technology where people can find a job within minutes, enlightened ways of leading and communicating and the result is a workforce that’s vastly different.  

There are six able workers for every 10 jobs and not all six will choose to be in the workforce.

To be successful we HAVE to lead and manage our workforce differently. It’s the only way our organizations will survive and thrive. Here are a few tips: 

  1. Consider a new mindset of hiring sharp (spikey) individuals to make a well-rounded team. Everyone wants to be valued and respected for their individual traits and how they can compliment the team. If you try to “round” each out so they are pretty good at everything, that high structured person will go where their attention to detail is valued, the assertive person will find a job where they can take full ownership for a new idea and someone else handles the details. 
  2. Review what needs to be done and redistribute the assignments so each employee can spend most (doesn’t have to be all) of their time in their spikiness (unique trait). This is hard! It’s much easier to expect everyone on your team to follow the same job responsibilities. 
  3. Hire for potential and train accordingly. You won’t find a unicorn in today’s competitive labor market. Hire people whose behavior (aka personality traits) is aligned with the required behavior of the role and invest in helping them develop the necessary skills to deliver the results. 
  4. And most importantly, get your leadership’s attention to this new reality. Hiring and managing the same way as the past and expecting a different result is the definition of insanity. It’s hard to take time to change when you’re in the middle of a crisis and yet it is necessary to adapt in order to stay competitive, fill empty seats and retain great employees.  

Let Us Help You

In conclusion, if this were easy, everyone would do it. Even those of us who love change and novel ideas struggle to put new ideas into practice. However, if you work as a team toward the same goal – in words and actions – you will have the most engaged workforces and job joy:) 

Please take advantage of the annual strategy session that we offer as part of your MPO program to help you with this! We are your partner in this new economic environment. 

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