Many countries are struggling with worker shortages right now as companies in the US, UK and the EU all struggle to fill job vacancies.
This is often attributed to pandemic-related phenomena such as the “great resignation” or “great reshuffle”, when many people left or changed jobs to improve their work-life balance. Long-term sickness also plays a role in countries like the UK.
But the underlying reason for these mounting shortages is the combination of a decline in workers aged 35 years and under and an ageing workforce. This may sound like the same thing, but it isn’t.
Falling birth rates in many countries since the 1960s have meant that fewer young people are now entering the labour market to fill the vacancies left by the outflow of baby boomers. This trend is happening at different times in different countries.
But broadly speaking, it means that the labour force growth seen in many countries, decade after decade since the start of the Industrial Revolution, is gradually coming to an end.
This confronts employers – and society as a whole – with a completely new situation. Such shortages in the labour market are something with which they have no experience.
It also carries the risk that (parts of) society will grind to a halt due to a lack of staff, for example, in healthcare, childcare, public transport, the police and many other sectors that are essential for the proper functioning of a country.
Technology (artificial intelligence or robots) will probably relieve this pressure over the long term. But an obvious short-term solution is the better deployment of older employees.
Life expectancy is still increasing every year in many countries and almost everywhere in Europe, but there has not been a similar rise in people staying in the labour market for longer across all of these countries. Even if older people want to continue to contribute to the labour market and society, research shows they can feel discriminated against when applying for new jobs or even in their current positions.
