As global markets begin to stabilize and as production levels slowly reach pre-pandemic levels, many companies are having to navigate and tackle this problem of a labor shortage. Before we dive into what’s causing this labor shortage it is really important for us to define what a global shortage is


What is a Labor Shortage?


A Labor shortage is when there are not enough available workers participating in the labor market to meet the manpower needs of employers of a particular industry or across different industries.


According to industry experts, Assessing the potential impact that work shortages could have on economies of the US, U.K and the Euro Zone. Moreover, while the pandemic has accentuated and underscored labor shortages, the root causes of this shortage has been existent since the pre-pandemic days.


What’s Causing this labor shortage?


In order to overcome the labor shortage it is important for us to identify the causes behind the massive labor shortage. There many causes behind this labor shortage of which we shall focus on the main causes behind this Global Labor Shortage :


1. Covid-19:

As you know the most major cause of the present labor shortages is due to the COVID-19 Pandemic. As a matter in fact the pandemic alone has changed the perception on how most of us view our beloved work or workplace for the better/worse. Moreover, the pandemic has caused more lingering problems for both employees and employers alike.


a. Mental health issues:

As the COVID-19 wreaked its havoc across the world during the year of 2020, many mental health professional had expressed their concern on the impact that global lockdowns had on many worker’s mental health. Today in the present day, it seems to be that this is proving to be true. 


b. Immigration disruptions:

Migrant workers make up to 5% of the Global workforce. This Is especially true for countries such as the United States, Saudi Arabia, The United Arab Emirates, Canada, Germany and the United Kingdom who depend quite heavily on these workers to meet their production and manpower needs.


The pandemic had significantly hindered this dependency on migrant workers as all of the above-mentioned countries had stricter immigration policies to curb the spread of the virus within their borders. In countries such as the UK, the combination of BREXIT as well as the pandemic had caused their immigration rates to fall as low as 80% in the year of 2020 alone!.


As the world recovers back to its pre-pandemic levels many countries around the world are slowly removing these immigration restrictions. However, it could take years or maybe even a decade for migration rates to get close to pre-pandemic levels.




2. An Aging Population :


Another factor which is currently causing the labor shortage of today is the aging population in many country across the world. Although this problem had existed for years during the pre-pandemic days. The effect of an aging population has had its effect during the pandemic. Unfortunately, this is only expected to increase in the upcoming decades.


Studies show that by the year of 2030 , one in every six people will be aged more than 65 and by the year of 2050 this number is expected double. The combination of falling birth rates , an aging population , Mental health issues only means that there will be lesser people available to work leading to a labor shortage.


3. Skill Gap :


The labor market of the present is a continuous uphill battle caused by technological disruption, demographic change and the constant evolving nature of work. This mainly due to the introduction of AI and other automation technologies ,


Such advancements has caused huge changes in how the workforce adapts their day to day operations . Due to this employers seek for employees who can adapt and learn to these new tech innovations. Moreover, due to this skill gap in the labor market . Many employers have slowed down the adoption of such technological advancements . The effects of a skill gap have been felt across many industries as it has drastically delayed the transformation of many kinds of industries.


Moreover, According to a PWC Report , Closing the global skills gap would add an additional 11.5 Trillion $ to the Global GDP by 2028.


Further Implications of a Global Labor Shortage:


The ongoing labor shortage combined with the factors of the COVID-19 pandemic, an aging population and A widening skill gap in the labor market is expected to increase in the years to come. This may disrupt impact the society at large since disruptions to the supply chain might lead to product shortages.


Similar to the Global Chip shortage that we’ve seen in the year of 2021. Moreover, the widening skill gap can prevent business from implementing emerging technology with the root cause being that most of the employers cannot implement new technologies without first acquiring employees that posses the skills required to fully make use of these technologies.


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