Labor Shortage Projections Point to Dramatic Workforce Changes by 2032

Labor shortage projections by Lightcast‘s new Rising Storm report suggest that in the coming years, the U.S. could see the biggest shortage of human resources the country has ever seen. The looming U.S. labor shortage is expected to affect both public and private entities and create a deficit of 6 million workers by 2032. Such a large deficit will cause organizations across industries to suffer significant losses with no way to fill in the gaps in their workforce and productivity. 

Managing labor shortages may be a core issue for employers in the future and it is in their best interest to work on growing and reshaping their workforce in the present so they can work through the flaws in our current system.

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Labor Shortage Projections Suggest Dire Conditions In Coming Years

For the U.S., a labor shortage is looming on the horizon according to Lightcast’s report “The Rising Storm: Building a Future-Ready Workforce to Withstand the Looming Labor Shortage.” The report lists several key factors that are expected to cause the labor shortage, going on to explain that we will be faced with a dearth of 6 million workers by 2032, which is less than 10 years away. 

“Over the next five to seven years, our labor pool’s growth will not match our population’s. We will increasingly have more consumers than producers, driving price hikes and product shortages, if we don’t take swift action,” Ron Hetrick, Lightcast Sr. Economist, said as a continuation to the predictions made by the study.

Why Do the Predictions Suggest a Labor Shortage in the U.S. In the Next Decade?

One of the major reasons for the upcoming shortage of workers is the mass exodus of older workers. More and more of the GenX folk are approaching retirement and with the retirement age often starting at 61, it is likely that older workers will not be available to patch the gap in the workforce. According to the Lightcast Rising Storm report, over 5 million workers have exited the workforce since 2021, with 80% of them being over the age of 55. 

This report of the “Silver Tsunami” is interesting as we have also seen alternate reports of older workers fearing they will be forced to continue working due to the lack of sufficient resources to support retirement. Whether they finally commit to retiring or not, this group of workers is expected to exit the workforce.

The study also reveals that there is a decline in U.S.-born workers in the labor force as well as prime-age men who could greatly help steady the looming labor shortage in the U.S. It appears that foreign-born workers can be credited for filling in many trade and service roles while workers born in the country are younger and more educated, aspiring for a different category of occupations. 

The complex make-up of the workforce paired with the shifting nature of work has created a situation where the available workforce is skewed towards a different set of occupations while existing labor and service roles remain unfilled. While no one can be blamed for this change of prioritization, the divide can have a lasting effect on the country. Governments and businesses need to do their bit to manage the labor shortages and attract workers to the jobs that are available. 

In many service and labor-centric roles, organizations and unions are currently at odds with each other, working to establish benefits that are feasible for both parties. Such divides further drive workers away from considering such roles, which is why we need more stabilized systems where employees can expect standard benefits and wages that improve their quality of life. 

Managing Labor Shortages Needs to Be a Priority

The labor shortage projections are expected to hit specific industries like health care, hospitality, and service the most drastically, but it’s likely the impact won’t stop there. Government and business leaders need to take action today to strategize the changes they can make over the next few years. 

With the trend of layoffs and furloughs currently ongoing, eliminating employees might save some money in the present, but it won’t help with an organization’s long-term survival strategy. Retention and internal promotions need to take priority if businesses want to avoid being left bereft during the eventual workforce deficit. 

The labor shortage in the U.S. is expected to hit in the next decade or so, which might lead us to become complacent and view it as a problem for future consideration, but the shortages won’t hit all at once. Despite many considering a college education to be non-essential, Americans are turning towards higher education in hopes of a better work-life.

Competition for top-level roles might skyrocket over the next few roles, but workers will no longer be interested in settling for lower-tier positions if there is nothing to attract them to it.

The labor shortage projections show us where we are headed unless we make changes today to appreciate, train, and retain our workforce. 

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