By Henry J. Glickel | Monday November 28, 2022
The demographic of the US population is changing - there are fewer people entering the workforce while those already in work are putting off their retirement. Whether you realize it or not, this has a significant impact on the structure of your business. Not only does it make it harder to recruit new talent, but it also impacts retention as it can feel as though there is no progression route. By understanding the challenges facing companies, we can begin to see a path to resolution.
Overall population growth is slowing
A country’s population is impacted by three things - births, immigration, and deaths. In 2021 over 73% of US counties experienced a population decrease1 as a result of deaths overtaking births. Fewer births, increase mortality thanks to the COVID pandemic, and an aging population all contributed to the decrease many counties saw. Many others were impacted by negative immigration - more people moving out of the country than moving into it. While the US population is still growing, it is doing so very slowly. In 2021 it grew by just 393,0002 which is a negligible amount. The US population has been experiencing slow growth for over a decade now, and we are starting to see the impact on the labor force.
An aging population means fewer people are entering the workforce
According to the United States Census Bureau3, the growth of the under 14s and over 65s has outpaced the growth of the working-age population over the last decade. This has a significant impact on the make-up of organizations as there are not enough people entering the workforce for the available jobs. This is something we have seen over the last few years as companies find it increasingly difficult to recruit new talent. With fewer people available to work the pool of candidates decreases, making it even more essential to offer a competitive package.
People are retiring later, making it harder to progress
As of February 2019, over 20% of those over 654 were working or looking for work, almost twice as many as in 1985. Although the pandemic saw a few million people enter retirement, many of them are now back5, which is no surprise given the current economic climate. Which begs the question, what positions are they in? While many are opting for a semi-retirement style consultancy model of work, others are in or looking for full-time employment.
The reason is that the older age groups tend to be in management or C-Suite positions. If they are not retiring, there is nowhere for aspiring managers to go. So they end up looking outside of the company for progression or career advancement opportunities.
What can you do?
Supporting the younger generations and providing progression opportunities wherever you can is important. Creating competitive benefits and remuneration packages can go some way to alleviating the difficulty of not having higher-level positions to go into. If you find that you are struggling to recruit entry-level candidates, we can help you find the right talent.