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News Feb. 5, 2018

Most employers experiencing numerous negative effects of labor shortage

More than half the 3,000 U.S. employers and managers in the Hays U.S. 2018 Salary Guide said they are hiring in 2018, but three-quarters said their industries face severe skills shortages, according to

The skilled labor shortage is so severe that 92 percent of employers say the issue is negatively affecting productivity, employee satisfaction and turnover. The industries reporting the worst shortages are construction and life sciences.

Hays says employers must be proactive about hiring and retention to combat the skills shortage and high demand for talent. According to the guide, the most common recruiting methods are promoting company culture (48 percent) and offering competitive salaries (43 percent). Respondents said their biggest threat is competitors who can pay more; the survey shows the greatest cause of employee turnover is money.

Two-thirds of respondents said business activity increased in 2017, and three-quarters believe activity will increase in 2018. Respondents said the main causes of the shortage were a lack of training and development and fewer workers entering their industries. Additionally, three-quarters of employers used contingent workers last year, and 43 percent of that number are hiring more.

Employers may need to try various methods to survive the skills gap, including promoting their company culture, benefits, flexible work schedules, development opportunities and paid leave. And although various studies show employers didn't plan to offer significant wage increases in 2018, they may not have a choice if they want to compete in a tight labor market.

It also will be important for employers to implement hands-on, practical learning experiences alongside the traditional classroom model to prepare workers.


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