Labor shortage issues
Although now the coronavirus has rearranged the opportunities in a lot of companies, this may make you feel that the issue of labor shortage has been resolved. This is now a temporary state, it will not last forever. The market will recover, so labor will also be needed. This situation can now be an advantage for you because you have been given an opportunity to rethink your existing situation.
If you clicked on this article, it is likely that you, like many other companies, have had a problem or caused some level of labor retention so far. So yesterday, there should have been a solution to help address labor shortages.
Why do you have to deal with labor retention now?
I have some bad news, if in a few years you still want to make a living from your business: if you don’t step now, don’t build a long-term strategy, in 2025 you will have many times more difficult things than you do now. So if you don’t have one yet, here’s your chance, contact us.
Want to know why? Want to know what you can do? Are you ready to change at least a little bit of your “human resource management strategy”?
This section reveals what awaits us in the next roughly 5-10 years and how we can prepare for it.
Why am I bringing up the 2025 problem instead of the current one?
No, it’s not a misspelling of 2025. Transforming a corporate culture, even a tiny one, or at least reforming it is a matter of a lot of time. It may not be exactly that much time, but if you start today, by 2025 it will definitely be a success. Contrary to your corporate culture, however, labor shortages, unless something miraculous happens, are expected to remain for the time being.
On the one hand, because many companies, although mobile even as a multinational company, cannot all of them fly around the world as migratory birds. You may be able to take action, but it is not always advisable.
And a family business is almost certainly unable to move on, saying there are enough people in Africa. So you need to sow these “seeds” as soon as possible before you can reap.
The ability to retain labor is not better elsewhere
You can say that many are relocating to China, and what is not being made there is a fake anymore. But similar processes are taking place in China as in Japan after World War II. Anno Japan also produced all kinds, just like now China. Then he got on with the technological advancement and we see where he is going. The same can be observed now in China. They no longer necessarily undertake everything, and there is not enough spare capacity in the neighboring countries to take over this.
And because those who will be working then, that is, in about 10 years, are already sure that they are alive, they are now just 10-15 years old, so there will be no more of them, no matter how much the birth rate jumps. At least all the children I’ve met so far were born as babies, not at the age of 10 🙂.
What does the age tree show?
It doesn’t matter which country you look at, age tree look similar in many places in industrialized countries. It typically shows an aging population with few or declining birth rates.
More and more people are retiring and not coming instead because they weren’t even born. The missing workforce should be made up of skilled immigrants for as long as possible.
Thus, the amount of labor is significantly reduced.
This phenomenon is not only true for Hungary, but affects almost every country globally.
You can also read about the population change on this page by city and here in summary.
What will happen to labor demand?
It is possible to calculate how many workers would be needed to maintain a country’s GDP.
For example: The German economy, which is also one of the engines of the European Union, will have a deficit of 8 million from talented workers over the next 5-10 years, which is 20% of the current workforce.
To solve this:
- need more immigrants (obviously someone who also gets a job)
- more women have to get a job (this, in turn, requires, for example, day care for children or even widespread access to part-time work)
- a higher retirement age is needed (after a while, we would rather forget the retirement because not even Matuzalem will be able to retire)
If this is not met, Germany’s economy will start to stagnate, with companies looking for talented labor elsewhere.
How does the labor shortage in more developed countries affect the retention of labor by smaller contries’ companies? (for example in Hungary)
Perhaps it is not difficult to guess that more developed countries will be looking for labor in other countries. The German economy still employs a significant amount of Hungarian labor (and labor from other nations). Thus, Hungarian companies have to compete with the German solution system, among other things, so that their own employees do not emigrate.
Anyone who took the time to browse the population could see that “but then the situation is not so bad”. However, the reality is expected to be even worse, as the numbers seen apply to all births, so they are virtually averages. If we break them down by skill level, we can see that there may be an even greater shortage of highly skilled labor. This will also be a challenge in education, as companies and countries need to train the workforce.
Is the demand for labor changing?
You could say that by 2025, everything will be done by robots, even in your company. It is a fact, and it is true, that what 20 years ago people have done e.g. in assembling a car, it is only done by a robot today. At the same time, however, jobs serving robots have appeared. So we’re in the same number of pieces, we just call the worker differently.
No, the buses are not expected to be driven by robots in 10 years, and luckily the company manager won’t be Optimus Prime either, so labor shortages in these areas will continue.
What does this mean for you in terms of job retention?
Technology will take over jobs, but we are also constantly seeing the emergence of jobs that require new skills. Thus, technology further widens the gap between expected and actual qualifications. (which is the biggest challenge for governments and companies)
So well-trained professionals and talents will receive a lot of emphasis in the next decade. Because they are the scarce resources of the future, we need to better understand and appreciate them better. Will they be willing to work abroad? What kind of work will they want for themselves?
As others were interested in this, 200,000 jobseekers from 189 countries were interviewed. Migration is a means of importing knowledge in the short term, so mobility was asked 60% of the 200,000 people would be willing to work abroad. Among 21-30 year olds, this proportion is even higher. I mean, I didn’t say anything new, you just have to look around.
How can you keep the workforce?
To do this, you need to know what kind of job they want. In a 26-item list, the salary and wages were only ranked 8th.
Top 4 is about culture. (worldwide)
Man’s work is appreciated.
So the fact that he keeps thanking him for his work, not just once a year with Christmas candy distribution. To appreciate their workforce, we’ve developed a personalized program that can make you even more cost-effective than getting into everything. If you are interested, please contact us.
Good relationship with colleagues
This is a company culture, you have to put yourself there.
Find answers to questions like this:
- How do You work
- What you allow in the workplace
- What do you expect from employees
- How evenly you distribute the work
- What does a newcomers see
- How privileged are e.g. the boss’s favorite.
It’s hard to do so well when a worker continously thinking about what’s back home. Do you know what individual goal your employees are driven by, do they have goal at all? Do you know what will be in their private lives, or what could be the points that are surly that they will hurt?
For this, we developed a questionnaire that shows their priorities. This will help you retain the workforce to retain your employees who don’t necessarily just go into work out of habit.
Good relationship with the boss.
I think you also had experience with a bad boss. If you were a career starter as an entrepreneur, you’ve probably heard of a bad teacher that everyone wanted to avoid from afar. The same is true for you. Here, too, corporate culture is also at the root of the issue, so you also need to become a better boss.
Things to do to keep the workforce.
Every company needs a human resource strategy and immediate action. This strategy optimally consists of (at least) 4 parts:
A plan that anticipates the needs for different jobs and types of skills.
Workforce planning appears as part of financial planning. This is true even if you want to maintain the same as you have now. If you’ve never planned what your workforce needs will look like in the next 10 years, and how you can accomplish this, then do it.
Plan how you will attract an excellent workforce from Generation Y, women and the elderly alike.
Obviously, the latter two are not very optimal for heavy physical work. But have you ever wondered what makes it good to work for your company? What you can give (and ask for in return) that an employee at another company can’t get.
If your only answer to this is that “I give you a salary”, then your company may be in a lucky position. In all other cases, keep in mind that you can’t compete with a multinational companies if you just give them a salary and have no other advantage.
Sub-plan on education and further training.
What perspective do your employee have at your company? Tiny, even for companies with a few people, this point is important as well. You want to grow after all, don’t you?
How do you keep your best people.
In other words, how do you implement a culture based on recognition and relationships?
The key to this is to change our (everybody’s) attitude. Workers are resources and values, not expenditures, not mere stocks, not machines.
- What motivates / keeps your employees at your company?
- How have you built / are building a workforce retention strategy for your company that is sustainable in the long run?
- How do you solve this problem in your own company? What is a challenge for you?
You can ask us your questions via the contact menu item, you can also request an appointment for the labor retention program.