Labor Hoarding: A Strategy for Navigating the Labor Shortage in 2023

Labor Hoarding...what is it?

One of the biggest trends we're seeing in 2023 is a new concept referred to as Labor Hoarding!

Are you one of the many, many employers who are struggling to find good talent out there? Are you wondering where all the great candidates are hiding?

I'm sure you realize this, but you are definitely not alone!

So where is all the good help these days?

There is a new buzzphrase out there, recently created by economists, that could help explain where a lot of the best talent is today ...

Labor Hoarding!!!

Have you heard of it?

So what is it exactly?

No, it's not workers with homes filled to the ceiling full of old books, dolls, and other trinkets as you've seen on t.v....

Labor Hoarding is a new trend where companies will hold on to their employees, even in an uncertain economy/recession. Even if they have to lose out on short-term profits. They basically keep their company at full capacity and conduct business as usual. This phenomenon is being observed across businesses of all sizes, from small enterprises to large corporations.

Traditionally, during economic downturns, companies would resort to layoffs as a cost-saving measure. However, labor hoarding represents a shift in this approach. With twice as many job openings as there are job seekers, finding good talent has become increasingly challenging. By retaining their workforce, companies can avoid the costs associated with recruiting, such as marketing new jobs, interviewing candidates, onboarding, and training.

Why is Labor Hoarding a smart strategy?

So why would employers keep these employees on and keep paying them when they may end up losing money?

Two words...Recruiting Costs!

Yes, they may lose out on some profits in the short-term, and they may even end up in the red for a little bit, but employers nowadays are thinking more long-term. They know this rough economic time isn't going to last forever. And when things start rebounding, they don't want to face the costs of marketing new jobs, interviewing candidates, onboarding and training new employees, etc...

It is expensive to hire! I'm sure I don't need to tell you that.

And another two words...Labor Shortage!

In addition to the costs of hiring, I'm sure you're also well aware of the labor shortage happening (partially due to Labor Hoarding), so if companies do layoffs now, where are they going to find good talent months down the road? As mentioned before, there are basically 2 job openings for every 1 job seeker out there right now...that's really rough when you are looking for new talent!

Is Labor Hoarding a good thing?

That mostly depends on which side of it you land on.

If you have a fully staffed business and you're hanging on to your employees, I'm sure you're feeling pretty comfortable! Even if you don't necessarily need everyone right now due to slower business, you know that as things pick up, you won't be scrambling to find people to fill your roles and you won't be spending a lot of money on recruiting.

On the other hand, if you're one of the employers struggling to fill vacancies due to a scarcity of job seekers, you may feel the pressure of labor hoarding. If you find yourself in this situation, we have a free tool that can assist you in attracting top talent: our Attraction Funnel guide.

What is included in this?

• 5 questions to help identify the bottleneck areas in your hiring process.
• A template to compute the conversion between each step.
• Proven ways to improve source reach.
• Tips for increasing job ad views.
• How to improve application completion rate.
• Next steps for increasing your qualified applicant pool.

By leveraging the insights and strategies outlined in our Attraction Funnel guide, you can optimize your recruitment efforts and increase your chances of finding the right talent in this challenging labor market.

If you have any questions about this guide or any other hiring needs, click the button below to set up a quick chat with one of our hiring experts!

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