Labor shortage occurs when companies are unable to acquire adequate numbers of eligible people at going salaries to fill jobs for which resources have been allocated. Organizations face substantial implications due to environmental disturbances caused by workforce shortages. If nothing is done, a company will face major challenges such as a loss of productivity, a source of concern to achieving organizational goals, excessive work stress and drop-off in underfunded areas, and poor impacts on workers’ work-life balance. Researchers discovered multiple variables causing labor shortages and their potential consequences, including the fact that low labor wages are considered to be a primary reason for skilled labor deficits (Kim et al., 2020). According to this study, it is possible to directly correlate wages, salaries, compensations, and labor shortages.
Organizations strive to retain efficient and effective employees that play a crucial role in the main business activities; thus, they should constantly increase the level of compensation. In anticipation of an impending labor deficit, firms can enhance wage amounts to hire the best talent available on the market. In the long term, such a policy can exacerbate the situation as the shortage of labor will be transformed into a shortage of highly qualified personnel.
What concerns the changes in recruitment and personnel training, in terms of labor deficit, a local business will attempt to preserve its workforce and develop it due to the lack of new specialists. Examining the employment requirements, attracting employees to the sector, assessing and selecting applicants, contracting, and integrating the new employee into the organization are all part of the recruiting process (Hamza et al., 2021). Changes in recruitment strategies can influence the labor market condition since organizations define specific requirements that candidates have to meet. In a situation where a labor shortage is anticipated, recruitment procedures can become aimed at target employee segments resulting in the absence of narrow-profile specialists. When emphasizing training, a local business can improve personnel training and development since it cannot expect the emergence of a new fully-qualified specialist in the future. Hence, in the outcome, the company will acquire employees with the best set of skills and competencies, and a professional gap will occur.
Hamza, P. A., Othman, B. J., Gardi, B., Sorguli, S., Aziz, H. M., Ahmed, S. A.,… & Anwar, G. (2021). Recruitment and Selection: The Relationship between Recruitment and Selection with Organizational Performance. International Journal of Engineering, Business and Management, 5(3), 1-13. Web.
Kim, S., Chang, S., & Castro-Lacouture, D. (2020). Dynamic modeling for analyzing impacts of skilled labor shortage on construction project management. Journal of Management in Engineering, 36(1). Web.