The labor shortage in the United States is very real. As of June 2017, the unemployment rate in the United States has decreased to 4.5 percent from 5.1 percent a year earlier. Across the 388 metropolitan areas in the country, 336 of them saw lower unemployment over the same time frame, according to the Bureau of Labor Statistics, with 26 areas seeing rates even below three percent. This is well under the rate of full employment, which was recently lowered by the Federal Reserve Bank from 5.6 percent to 4.6 percent. Full employment is the rate at which economists deem all available workers to be theoretically employed. The remaining percentage accounts for workers who are between jobs, new to the workforce or are otherwise voluntarily unemployed.
Unfilled jobs and skills gaps
The news that American workers are, on a national scale, fully employed may be confusing in light of recent politics and the “Buy American Hire American” executive order. The reality is that not all U.S. workers are employed, but as American unemployment decreases, businesses in many industries are actually struggling to fill jobs. The excess in unfilled jobs for employers in the U.S. is coupled with gaps in skills among prospective employees. According to our 2017 Immigration Trends Report, 77 percent of companies said that filling the skills gap at their organizations was very important.
Skills gaps in industries like technology have hurt businesses and cost them, according to an Indeed.com study from this past December. Eighty-three percent of tech businesses surveyed reported a loss in revenue, slower to-market times, and employee burnout as the result of the talent shortage in tech. But it’s not just tech. It’s healthcare providers, tax preparers, software engineers and others.
Trends in hiring foreign nationals
Looking for help from foreign national employees to fill some of these employment and skills gaps has become critical and commonplace among businesses in America. In our 2017 Immigration Trends Report, 91 percent of employers said that sourcing foreign national employees is important to their company’s talent acquisition strategy. That’s a five percent increase from our 2016 numbers.
The labor shortage is not just an American issue, however, and it’s not just a problem of today. PwC predicts that population declines and aging populations in many developed and developing countries will result in major changes to the workforce, most notably a global labor shortage that will extend beyond a few years.
The labor shortage in the U.S. and around the world is very real. This issue is concerning to businesses in light of the current political climate, which has become highly scrutinous of immigration practices in many cases. That doesn’t mean there’s no hope for filling skills gaps and jobs. It just means that looking beyond U.S. borders for talent has become necessary. At the same time, as companies broach the greater world of international talent, staying in compliance with immigration law has never been more important.