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They’re calling it the “Forever Labor Shortage” and it’s here to stay. Why? Demographics.
In short, the US labor force participation rate is dropping and will continue to decline in the coming decade. Though many Baby Boomers are unable to retire, putting off retirement or un-retiring, they will eventually and inevitably leave the workforce. There are simply not enough workers to replace them when they do.
Millennials surpassed Baby Boomers as America’s largest generation mid-2019. But at their current size of approximately 72.24 million, US Millennials are 6.5 million short of the Boomer peak of 78.8 million in 1999. According to the US Census, by 2029 all Baby Boomers will be 65+ years’ of age and either already retired or hoping to retire soon.
The US Bureau of Labor Statistics reports the peak US labor force participation rate was 67.4% in 2000. By pre-pandemic 2019, this rate fell to 63.3%. In 2022 the participation rate dropped to 62.2% and is projected to be 60.4% by 2032. That’s a 7% drop in 30 years.
What does this mean for the Office Solutions and Technology Industry?
Our channel has been close to zero unemployment for a decade. Even before the pandemic, most dealers have been running lean with no backbench, no margin for worker attrition. Though they missed out on opportunities whenever there was an empty seat, they could mostly get away with it.
This time is well passed. Now it can take months to fill an opening while some key positions simply cannot be replaced. Companies are losing their institutional knowledge before their leaders can pass it on. Plans for growth are stymied as teams have to scramble just to maintain their expected level of service. They leave money on the table because no one is there to pick it up.
This industry’s strength is historically its people, its “human capital.” Now, the qualified workforce is seriously bottlenecked. Many employers are still ignoring this core problem and writing off their hiring difficulties as “people just don’t want to work anymore.”
https://copiercareers.com/insights/newsletters/october-2023/
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