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How Businesses are Digitizing Their Workforce to Offset Employee Deficits

Businesses have dealt with unprecedented challenges over the past two years due to the COVID-19 pandemic. Following federal or state mandates, enforcing customers to wear masks and requiring social distancing were examples of how businesses had to adapt.

The pandemic also exacerbated other issues for business, one being the ongoing labor shortages many industries are experiencing. Across the nation, there are more open jobs than the number of people to fill them. These employee shortages are one of the most pressing issues facing the US economy.

To overcome these shortages, many companies are considering adopting and implementing new technologies to stay afloat and manage employee deficits.

Factors Contributing to Nationwide Labor Shortages

According to the U.S. Chamber of Commerce, there are roughly 11 million unfilled jobs with only six million unemployed workers. If all unemployed workers filled these jobs, there would still be a shortage of five million workers.

What are some of the factors contributing to these widespread labor shortages?

The Great Resignation

One reason for these labor shortages is the number of American workers quitting their jobs. The COVID-19 pandemic set off a churn in the labor force and in November of 2021, the nation’s quit rate reached its highest level in 20 years.

Millions of workers have decided to quit their jobs in recent years. This trend is being coined “The Great Resignation.” Reasons for quitting vary, but one main reason is that the pandemic caused workers to reevaluate their life priorities, which led them to reduce their working hours or leave their jobs entirely.

Changing Employee Expectations

With the increasing number of workers performing their jobs remotely, many employees do not want to spend time commuting or returning to the office for a job. Unless a company can offer competitive wages, attractive benefits and flexible working hours and arrangements, workers may not be as willing to accept a job offer.

Cases of Long COVID-19

Workers who experience “long COVID,” defined by the Centers for Disease Control (CDC) as patients who have persistent post-COVID health conditions, also contribute to labor shortages.

Research from Brookings found that around 1.6 million workers are missing from the workforce due to cases of long COVID. Suppose people are not well enough to return to work due to long COVID. In that case, it will undoubtedly worsen existing employee deficits.

This is not an exhaustive list of factors contributing to the country’s labor shortages. Still, they provide some insight into the changes in the American workforce.

How Businesses are Using Technology to Offset Worker Shortages

In simple terms, digitalization is when a company adopts digital technologies to create new revenue streams, open up more business opportunities and rework its business model.

Depending on the technologies, companies can offset labor shortages. Let’s explore how digitalization helps companies manage their business with fewer employees.

Eliminating Some Roles

With some new technologies like artificial intelligence (AI), machine learning (ML) and robotic process automation (RPA), businesses can automate certain tasks within their operations, which eliminates the need to hire a human employee. According to the World Economic Forum, U.S. companies invested more in robotics than ever before in the first nine months of 2021.

While some people worry that increased automation will lead to worker displacement, that’s not entirely true. It’s suggested that technologies that enable automation work best alongside human workers — automated tech may eliminate the need for some roles, but it will also open up more job opportunities.

Increasing Productivity

As a result of automation, more employees within a company can spend less time on mundane, repetitive tasks and more time focusing on meaningful tasks. This makes businesses more productive, meaning that they can operate with fewer employees. For example, Lyft, the popular ride-sharing service, uses automated chatbots for its users to troubleshoot issues.

Amazon uses predictive analytics to determine what customers will buy before making a purchase decision. Additionally, many companies invest in enterprise software solutions, such as customer relationship management (CRM) software, inventory management software and project management software (PMS), to help streamline workflows and maintain employee productivity.

Allowing for Flexible Work Environments

Many businesses are adopting digital technologies to support their transition to remote-first, remote-friendly or hybrid working models to meet changing employee expectations. Many companies continued operating through the height of the pandemic with their full workforces after adopting remote working models. Without technology, remote work may not be possible.

Digitizing workforces has proven successful for many companies and some have decided to go fully remote indefinitely. Here are some examples:

  • Twitter
  • Reddit
  • Coinbase
  • 3M
  • Spotify
  • Airbnb

Because remote work will continue to dominate the workforce, companies must digitalize to garner new employees.

Combating Labor Shortages With Technology

While using technology is not the perfect solution for reducing labor shortages, it’s a viable way for companies to continue operating with fewer employees. A company cannot survive without a team of employees keeping it up and running.

It will be interesting to see how companies digitalize in the post-pandemic era and if these advanced technologies become even more prevalent in the American workforce.

Shannon Flynn

Shannon Flynn is a technology writer who covers trends in business, cybersecurity, and IT trends. Shannon is a contributor to MakeUseOf, Hackernoon, Business.com, and more. She's also the managing editor of ReHack.com.

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