How labor shortage threatens our world - and the right job can save it

After all, January is the month of New Year’s resolutions. Over the holidays, many people wonder how they can improve their lives - and work is one of its most defining factors. It is still remarkable that the uplift in job searches is significantly higher than in the January of previous years.

People realise that they have excellent chances of finding a job at the moment. Not just any job. But the right one.

This is great news.

Why?

First, life is too short for the wrong job. This has always been true, but the Corona pandemic has made everyone realise how massively work affects our quality of life. The pandemic has shown many people that their job is not a good fit for them: not crisis-proof, not meaningful, not compatible with their current life situation - simply not right.

Secondly: The right job can save the world. This may sound exaggerated, but let’s take a closer look into why it is not. If people succeed in finding the right job, it means that companies attract exactly the right employees. This will become more important than ever in the upcoming years. It’s about time that we stop wasting talent in the wrong jobs. Because there will be fewer and fewer people working.

How labor shortage threatens our world

Our challenge will no longer be unemployment, but labor shortage. In Germany, the number of those retiring exceeds the number of new entrants to the job market this year by more than 300,000 people. From 2025 on, the crowded baby boomer generation will begin to retire. In Europe, the number of people in the labor force will shrink by 9 per cent by 2040. In North America, labor force growth will decline by 16 per cent over the same period.

Along with the climate crisis, labor shortage is the biggest challenge of the 21st century. Whether in politics, business or society, we all need to be much louder about it. And work together at full speed to find solutions.

Labor shortage threatens the world as we know it. We are already experiencing minor foreshadowings: We have to wait weeks or even months for repairs because there are too few craftsmen. The earliest we can get an appointment with a medical specialist is six months from now, because there is only one nearby my town. As it is widely known, administrations just like businesses cannot be digitised as quickly and comprehensively as would be theoretically possible, because there is a practical lack of skilled workers to implement it. This is just the beginning.

Labor shortage is also one of the biggest challenges ahead of us because it hits us at the same time as another trend: stagnating per capita productivity. If there are fewer people working, however, they have to be more productive. Otherwise it does not add up. When productivity falls, economic power falls. When economic power falls, our prosperity is at stake. That’s how labor shortage threatens our world.

Why the right job is part of the solution

In Germany, based on a joint study with the Institut der Deutschen Wirtschaft et al. last year, we called on policymakers to take swift action. To counteract labor shortage, we need, among other things, greater immigration and integration of skilled workers, more flexible working models for higher labor force participation of women and older workers, and a more permeable labor market that allows easier and faster job changes. Now it's up to the politicians.

And to us at StepStone.

We are part of the solution. In the age of labor shortage, it cannot be left to chance whether people stumble across the right job. Companies must no longer miss out on the right candidates. Finding the right one must also become much quicker and easier. It must finally come to an end that half of all applicants get no feedback at all. The economy can no longer afford a dysfunctional job market.

It is in our hands to automate the job market. In recent years, we at StepStone have started to evolve digital recruiting from Post&Pray to autonomous matching – from one-click applications like online shopping, to bringing companies and jobseekers together through our Conversational AI technology, to the Gender Bias Decoder for fair wording of job ads. Over the next few years, we want to build the next-generation recruiting platform and provide intelligent solutions from job search to application and candidate selection. Thus, we want to make the labor market finally work.

Then all people will find a job. Not sometime, but quickly. Not just any job, but the right one. A job in which they can make a difference. In which they are productive. If we succeed in connecting everyone with a job where they can make the most of their skills and talents, then we are an important part of the solution.

People are not only proven to be more productive in the right job, they are also happier. The right people make companies more successful. Successful and fast-growing companies strengthen the economy. And a strong economy ensures the prosperity of us all.

That's why the right job can save the world.

That's great news, isn't it?