It’s easy to assume that when workers are in high demand and short supply, as with the current labor market, it’s a great situation for employees. Indeed, in many ways, it is. Workers have much greater bargaining power in this market compared with, say, the situation in 2008. They can demand higher wages and have more opportunities to find better jobs with other employers.
So, what possible negatives could exist in this dream market for workers?
Employees Facing Increasing Demands
Well, the flip side is that it’s not just employers that suffer when they can’t find enough help. Employees working for short-staffed employers generally have to handle more work, and that might mean working longer hours or juggling more tasks. For hourly workers, that might mean lucrative overtime, but for salaried employees, it’s just longer hours and more stress.
The impact on employees can have a downward spiral effect on employers, whose workers have become increasingly overworked, frustrated, and burned out and may leave to find better opportunities. This, of course, leaves employers even more short-staffed than they already were, putting even greater strains on the remaining staff.
Automation Leads to Efficiencies
A straightforward fix for this problem would be to simply hire more workers, but that is the whole problem—employers can’t find more workers! Instead, employers should consider ways to operate more efficiently with the workers they have.
This could mean greater automation, utilization of nonhuman resources like robotic process automation (RPA) and other tools, and increased training to help employees perform their tasks more efficiently. Some workers may have inherited tasks from departing colleagues and have little experience in performing them, so training can go a long way toward improving productivity and reducing stress.
A tight labor market is great for workers in terms of bargaining power and employment options, but these workers also have to deal with many of the same stresses their employers struggle with when they are short-staffed. In the absence of available labor, employers and employees would therefore both benefit from increased efficiencies.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.