What Is A Labor Shortage?

What is a labor shortage? This question has been in the hearts of many across the world.

Especially since the COVID 19 pandemic that ravaged the world. Causing the death of many skilled and unskilled workers.

Even after a year, employers are still experiencing setbacks in employing certified applicants for obtainable job vacancies.

They can’t find a sufficient number of candidates to suit the positions that they need.

However, this piece has all you need to know about labor shortages. 

The meaning, outcome, and prevention were properly stated in this piece.

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What Is A Labor Shortage?

When there is a rise in demand for workers in a certain field and a decline of certified and licensed workers who can properly do the work for that position. One can say that there’s a labor shortage.

This decline is measured by the supply and demand of workers.

Do you have a sufficient number of applicants for a position in your firm? If you don’t then you are experiencing a labor shortage.

Application rate, employment rate, and filling vacant positions in one’s firm are very low during a labor shortage.

This can result in increment and improvement of workers’ Benefits and wages by an employer to attract more workers.

Read also: 10 Stable Careers That Resist Economic Downturns

Types Of Labor Shortage

  • Number of applicants: Your firm would  experience a labor shortage when the number of vacant positions in a company is higher than the number of applicants that applied 
  • Quality of job candidates: When applicants for job openings are not up to the requirements or standards of the position, the company would experience a labor shortage.

Causes Of Labour Shortage

1. Disaster And Disease OutBreak.

The COVID-19 pandemic made so many workers ask why they should work for people when they can just be self-employed.

Most workers retired early, some started their blogs and businesses, some of them died due to the outbreak, and most of them were compelled to stay home to prevent the spread of the virus.

2. Caregiving Duties.

The unavailability of childcare has an extreme effect on working mothers around the world.

Many mothers left the labor force during the COVID-19 pandemic.

You cannot find up to 1.4 million mothers working in today’s world compared to the years before the pandemic.

3. Loss Of Immigrants.

Due to the immigration restrictions caused by the pandemic. 

The number of immigrants allowed into a country has drastically reduced.

4. Labor Market Mismatch

As attested by the IMF. One of the causes of a labor shortage is the unwillingness of individuals to apply for available vacancies due to a mismatch of jobs. 

This is most common when a person is overqualified for a job opening.

Read also: Top 10 Jobs That Are Booming Right Now

5. Aging Workforce.

Based on research, more people will retire in the coming years.

The abnormal number of workers leaving their jobs in the coming years would put a dent in the world’s economy.

However, these employees leaving their jobs is not ideal. As an alternative, they have started their business, switched industries that would pay higher, and even changed careers.

All of the findings above are more noticeable among the low earners. 

You must know that employees leave companies to search for better benefits and pay.

Consequences Of Labor Shortages

1. Rising Wages.

This would be the most noticeable effect if the labor shortage increases.

When the supply of workers stops, the wages of workers increase. 

Have you ever tried to figure out why it costs £40-£80 an hour to hire a plumber? Well, it’s actually due to the shortage in supply of plumbers

However, when a company wants to attract workers to work for them, they increase their wages. 

After all, most people these days work for the money.

2. Relocation Of Firms.

Labor shortages would aggravate the risk for companies to move abroad and look for capable and qualified workers.

3. Delaying Delivery Time.

The rate at which 50 employees wouldn’t produce goods wouldn’t be the same rate of 20 employees.

However, with just a handful of workers, the available production of goods and services would decrease drastically. 

Companies have resulted in buying more machines which has increased the cost of production. 

This is due to the unavailability of workers in the company 

4. Breaking Down At Every Stage

The demand structure works hand in hand. When one section is inactive it can have a drastic effect on the other companies that are related to it 

For instance, the inability to get products to a manufacturer and distributor can create a problem in the supply sector. 

Leading to retailers hoarding their goods, which can further increase the price of these goods.

Read also: Latest Jobs At The British High Commission in 2022.

Solutions To Labor Shortage

1. Train Your Team To Do More.

When you conduct regular training and seminars. 

Your staff would know that you’re always thinking of them. And you aim to always improve their standard of work.

 2. Hire A Temporary Employee.

Employing staff through the recommendation of other companies removes the stress of employment from the manager.

Some agencies do all the work for you. They search for workers for you without the employer worrying himself.

It’s the perfect way to refill vacant positions for a few months.

3. Hire Unqualified People.

One of the causes of a labor shortage is when companies constantly search for over-qualified people to work.

Instead of being in this mess, it’s better to employ these people and train them. 

Through this, I assure you, your firm wouldn’t be experiencing a labor shortage.

4. Post The Job Opening On Social Media.

Social Media is a great way to reach millions of people within seconds.

If you’re searching for more applicants, for a job opening. 

Then post the vacancy of that job on social media.

5. Use Technology. 

When a firm employs the use of advanced technology, its worker would no longer be stressed.

Thereby making them work longer for your company.

6. Good Working Condition.

There are no arguments on the importance of good working conditions. 

How your team is treated matters a lot. An employee that doesn’t feel safe at work would leave your firm.

In addition,  Giving them applause and encouraging them would increase their working ability.

7. Increase Wages. 

Yes, most people don’t use money as a yardstick to do a job.

However, money pays the bills. Improving your employees’ pay would let them know that you truly care about their welfare.

8. Offer Benefits. 

For an employee to attract workers, you would need to include incentives in their pay. 

Health insurance, extra time, retirement benefits,  medicare payments and many more would have people rushing to work for you.


Many reasons promote the level of labor shortage, but your company must find a way out.

Sourcing for products and machines to improve the working condition of your workers is very vital.

However, if you have any questions regarding how the labor market works you can drop a comment below.

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