Understanding the 2023 Talent Shortage [+5 Things You Can Do About It]

There is a major issue facing businesses today: with 1.9 open jobs for every unemployed US worker, it's clear that HR and business leaders are struggling to fill positions in an increasingly competitive job market. The good news is that many of these leaders have come up with creative solutions to combat the talent shortage – and they're seeing results.

We asked 5 HR experts what strategies they've implemented to confront the talent shortage in 2023, and how they plan to keep their organizations prepared for whatever the future of hiring may bring.

Make Room for Permanent Remote Employees

With an ever-growing talent shortage in the US, hiring remote employees seems to be a common way businesses are trying to combat this trend. Not only are remote employees more cost-efficient, but they also provide businesses with access to unique skill sets that may not be available locally.

However, transitioning remote employees from short-term and/or part-time assignments to permanent remote roles is essential for tackling the talent shortage facing many businesses today. This means creating and maintaining remote work cultures by offering diverse benefits that meet the needs of remote employees and designating remote work roles across all departments - ultimately having remote workers a vital part of their business moving forward into 2023 and beyond.

A remote work culture that is inclusive and effective requires a few key elements. Actionable steps that businesses can take to create and maintain a remote work culture include:

Clearly Communicate Expectations and Guidelines for Remote Work

This includes informing all employees of things like communication protocols, work schedules, and how to report progress on projects.

Encourage Regular Communication and Collaboration

Remote workers should be provided with weekly check-ins, team meetings, and virtual team-building activities.

Provide Necessary Tools and Resources

Remote workers should all have access to resources that set them up for success, like virtual collaboration tools, office equipment, and access to company software.

Foster a Sense of Belonging

You can ensure that remote workers feel like valued team members by promoting a positive and inclusive work culture. This can include things like recognizing remote workers' contributions, promoting employee engagement, and encouraging them to interact with others on the team.

Evaluate and Adjust As Necessary

Regularly evaluate the effectiveness of your remote work culture and make adjustments as necessary. This can include things like surveying remote workers to gather feedback and making changes to policies and procedures to better support remote workers.

“More and more people are looking for flexible job profiles and therefore quitting or detesting the traditional back-to-office mode that made a comeback in 2022,” says Michael Woods, Office Manager at Uniwide Formations. “Our sole priority will be to introduce more and better remote working positions to combat this talent shortage. It will not be easy, as having permanent remote employees is a lot harder to manage than adjusting to temporary remote working conditions”

He emphasizes that having remote teams requires an entirely different management system than what was created during temporary remote work sessions. Woods suggests dedicating management teams to improving the remote setup and optimizing the process for both in-office and remote employees. He believes this strategic shift can help businesses recognize today's talent deficit without sacrificing their core values or mission statements.

“Our strategy will be to dedicate management teams to bettering and managing remote employees, creating new benefits policies for them, and optimizing the work process so that in-office and remote employees may coexist and cooperate,” says Woods.

Adopt Pay Transparency Policies

With the rate of job openings seemingly far outstripping the number of unemployed US workers, pay transparency policies are becoming increasingly important for businesses looking to remain competitive. It’s also becoming mandatory, with several states having established pay transparency laws and several more looking to adopt them.

At a time when salary information is sometimes hard to come by and difficult to compare, pay transparency initiatives can set a business apart from its competitors. According to Maximilian Wühr, CGO & Co-Founder at Finn, the talent shortage trend has yet to hit his business due to proactive pay transparency strategies put in place.

“We've overhauled our compensation strategy to ensure fairness and taken it a step further with new pay transparency policies,” says Wühr.

Costs are rising and job postings are increasingly providing candidates with an accurate reflection of their potential compensation. This means workers no longer accept lower-than-expected salaries or other unfair working conditions in order to secure a job.

“The numbers are clear—unemployed workers aren't happy with their options and are no longer accepting the status quo,” says Wühr.

By proactively addressing these issues, Wühr believes businesses have the opportunity to gain a true competitive advantage over those who remain in the dark about salary expectations. As a result, employers have started to increase wages and improve work culture accordingly — creating long-term win-win situations for both employees and employers alike.

Hire Freelancers to Fill In Skill Gaps

As businesses struggle to fill positions with the right talent, they are increasingly turning to freelance solutions to help fill in skill gaps. This strategy seems to be paying off, with 80% of managers who have hired freelancers feeling confident they found the help they need.

Jennie Miller, Co-Founder at Midss, believes that the talent shortage has greatly impacted her business. To retain the team members they have, the organization has implemented an employee retention strategy focused on offering better hours and benefits. But even with these efforts, Miller says that it’s still a struggle to fill all open positions.

“We have had some success hiring freelancers, and we intend to ramp up this strategy in 2023,” says Miller. “Although it's been a challenge finding the right freelancers for our organization, those we have worked with have delivered immense value under various short-term roles. I feel that freelance work gives talented and skilled folks a chance to work on their own terms.“

Although Miller notes that she does intend to explore longer-term relationships with remote talent in the future, it is nonetheless clear that freelance roles will remain a major path for businesses looking to weather the storm of labor shortages.

Dov Breuer, COO of Fixlers, knows firsthand the effects of the talent shortage. With increased competition from other similar businesses and a wave of highly in-demand employees, he has made it his goal to take action to retain good hires.

“On top of that, many of our employees are highly in demand, so we want to do our best to retain them,” says Breuer.

For 2023, Fixlers aims to improve the compensation packages and make the workplace more flexible. Breuer believes that creating an environment where people can be truly successful and satisfied is essential for employers to keep their employees engaged.

Focus On Employee Retention

Brian Clark, CEO & Marketing Director of United Medical Education, has been fortunate to experience little employee turnover. But he’s well aware that this won’t last forever and is already taking steps to address the talent shortage.

“The statistics speak for themselves,” says Clark. “I would say the current talent shortage has hit our business with the reality that we need to compensate our current talent more and create new opportunities for them to advance.”

The company has implemented an employee referral bonus program that pays out more than $5,000 for any hire they make, regardless of the position. This program allows the current team members to be part of the hiring process, allowing them to grow and build their organization's culture.

By focusing on rewarding their team for hard work and offering them opportunities for advancement, United Medical Education is attempting to ensure that personnel retention isn't a problem in 2023 or beyond.

Final Thoughts

Although many are feeling strain due to the ongoing talent shortage, it’s vital that businesses embrace remote work, foster a strong culture, and be open to adjusting to today’s evolving workplace. By doing so, they can successfully attract top candidates while retaining their existing workforce, or else be faced with their top talent looking elsewhere.

GoCo's all-in-one HR platform can help you build a workplace that attracts and retains top talent, whether your team is onsite, remote, or hybrid. Take a tour of our platform and see how GoCo can help your business combat the talent shortage in 2023 and beyond.