The Labor Shortage Is Only Getting Worse. What's Causing It and How Can I Avoid Losing Staff? Many business leaders are feeling powerless to the worsening labor crisis, which some say was caused by the Covid-19 pandemic. But what if there were other reasons for this issue, reasons that are squarely within your hands as a business leader to address?

By Claire Brummell

Opinions expressed by Entrepreneur contributors are their own.

Most people thought that "The Great Resignation" and the labor crisis would be a temporary issue. But not only has the situation not recovered, it is getting worse.

Although 428,000 jobs were added in May 2022, according to the Bureau of Labor Statistics, participation in the labor force declined to 62.2% in April and 363,000 left the workforce, worsening the worker shortage crisis.

Most people blame, at least in part, the global pandemic as a cause or at least a catalyst for the mass exodus, but as Harvard Business Review (HBR) noted in March 2022, a "record number of workers did quit their jobs in 2021 ... If you consider that number in the context of total employment during the past dozen years ... You can see that what we are living through is not just short-term turbulence provoked by the pandemic but rather the continuation of a long-term trend."

Related: How Entrepreneurs Can Find Great Talent Despite a Labor Shortage

This is not a pandemic issue

The reality is that this is an issue that has been steadily worsening for over a decade and the disproportionate focus on the pandemic's impact is not only erroneous but prevents employers from understanding the real reasons for these trends — reasons that, for the most part, are very much within their sphere of influence.

It is very easy to feel helpless about the situation when it seems to be caused by an international health crisis that you could not influence, change or control. But when you realize the real reasons that this trend has been not only increasing, but gaining momentum in recent years, most of the reasons are aspects of the working experience that employers can change.

If you look at the top 10 reasons that U.S. workers left a job in 2021, as Pew Research Center reports they are (in priority order): Pay was too low, no opportunities for advancement, felt disrespected at work, because of child care issues, not enough flexibility to choose when to put in hours, benefits weren't good, wanted to relocate to a different area, working too many hours, working too few hours and employer required a Covid-19 vaccine.

Going back to 2015, The Business Journals shared that five reasons that research had shown to cause people to leave were that they weren't growing professionally, they weren't happy with the work they were doing, they didn't feel important, they lacked support to do their jobs well and they weren't paid enough.

And looking back 10 years to 2012, Leader Chat shared that the top 10 reasons people quit were limited career/promotion opportunities, supervisor lacked respect/support, compensation, job duties boring/no challenge, supervisor lacked leadership skills, work hours, unavoidable reasons, supervisor poor employee relations, supervisor displayed favoritism and not recognized for their contribution.

Related: How Leaders Can Beat the Labor Crisis

So what's the real cause?

When you look at the patterns and trends across the last decade, the big picture becomes clear — employees have realized that they are no longer willing to work in roles and for employers that consistently compromise their universal needs. They are no longer willing to do a job that is detrimental to their physical, mental and emotional well-being.

So, what are just some of the universal needs that are at the root of this worsening labor crisis?

  • Foundation/function need: These are the needs that primarily link to the things we need to be able to function in our society. So when issues of compensation (especially in the context of a living wage), benefits such as health care, child care issues, and working too many hours come up, your employees' foundation/function needs are being impacted.
  • Value need: This is the need that connects to our feeling of worth, importance and self-esteem. When you see people quitting because they didn't feel important, they felt disrespected, a lack of support, favoritism and not being recognized for their contribution, your employee's value needs are being impacted. Compensation and pay issues can also affect an employee's value need, as they are often an indicator that staff is not being valued in a monetary way that reflects their contribution to the company.
  • Growth need: This is the need that is linked to our growth and development. So issues like job duties boring/no challenge, not growing professionally, career development and no opportunities for advancement, are a strong indicator that your employees' growth need is being negatively impacted.

Related: Record High: U.S. Now Has 2 Job Openings for Every Person Who Is Unemployed

What can I do to protect my organization?

All of this means is that addressing the labor crisis isn't a question of finding more people, instead, it's a question of creating a culture and an environment that people actually want to be a part of. A working experience that not only does not negatively impact these needs but actually supports your employees in getting them met.

The reality is that there's no such thing as a labor crisis right now if:

  1. You have employees who are happy, engaged and loyal, whose experience is that working with your company not only does not sacrifice their universal needs but actually supports them in getting them met.
  2. Other people actually want to work for your organization (which happens when you gain a reputation for employees whose universal needs are supported through working with you).

An organization that fits these criteria is how we define a destination workplace, and it is the most powerful antidote to the labor crisis, both in the present and in the future.

When you start putting your focus there, not only does it empower you to do something to stop your business from being affected by the labor crisis in the short term, but it gives you the blueprint to create an organization that people want to be a part of, which is the only thing which will protect your business from the future labor trends, which according to the numbers are only going to continue to get worse.

Business Strategies, Entrepreneurial Advice & Inspiring Stories are all in one place. Explore the new Entrepreneur Bookstore.

Wavy Line
Claire Brummell

Lead Consultant, Creator & Founder at The Universal Needs

An international consultant and expert in human behaviour, Claire Brummell is the creator and founder of The Universal Needs (a proprietary model and methodology), which specializes in business, HR, leadership and mental health.

Editor's Pick

She's Been Coding Since Age 7 and Presented Her Life-Saving App to Tim Cook Last Year. Now 17, She's on Track to Solve Even Bigger Problems.
I Helped Grow 4 Unicorns Over 10 Years That Generated $18 Billion in Online Revenues. Here's What I've Learned.
Want to Break Bad Habits and Supercharge Your Business? Use This Technique.
Don't Have Any Clients But Need Customer Testimonials? Follow These 3 Tricks To Boost Your Rep.
Why Are Some Wines More Expensive Than Others? A Top Winemaker Gives a Full-Bodied Explanation.

Related Topics

Business News

'All Hell Is Going to Break Loose': Barbara Corcoran Issues Warning About Real Estate Market, Interest Rates

The "Shark Tank" star appeared on FOX Business' "The Claman Countdown" this week.


How do You Turn Employees Into Problem-Solvers? Follow This 3-Step Leadership Formula.

As leaders, we need to solve company problems effectively. We often have the urge to fix everything quickly, but is this system of problem-solving really sustainable?

Business Plans

How to Change Careers: A Step-by-Step Guide

Want to make a career change without compromising your finances or future? Check out this step-by-step guide on how to change careers to learn more.

Growing a Business

Subscribers Exclusive Event: Discover How These 2 Founders Turned Their Side Hustle into a Million-Dollar Lifestyle Brand

Learn how you can transform your personal brand into a thriving business empire with co-founders of The Skinny Confidential


How I Made Money From My Book Without Selling a Single Copy

Did you know you can make money with a book without selling copies? Here's exactly how I did it.


This AI-Powered Flight Finder Can Help You Cut Travel Expenses

Get a lifetime subscription to this AI flight finder for $59.99.