SPOTLIGHT INSIGHT
The Growing Trend to Overcome the Labor Shortage Christopher Spranger Founder and CEO of Spranger Business Solutions
It was Wednesday March 11, 2020, and my wife and I were out to dinner with friends at a local sports bar. As we waited for our food, one of the TVs was showing the broadcast of the NBA’s Oklahoma City Thunder playing against the Utah Jazz. This TV quickly garnered the attention of everyone as an announcement was made that the NBA would suspend the season because one of the Utah Jazz players had tested positive for COVID. Players walked off the court and fans were asked to exit. In short time, other major sporting events were cancelled, schools were closed and shelter in place orders announced. Up until that day, COVID was on my radar, but was only something happening on the other side of the earth. This was the moment for me when COVID-19 became real. We all have that moment. In some ways it feels like yesterday, and in others a distant memory. What happened over the next two years has seemed like a continuous stream of change and challenges. No international travel, no in person events, working from home, video conferencing, curbside pickup, social distancing, and the list goes on. The pandemic has lasted far longer than most of us anticipated. As we transition back to a (hopefully) a COVID free world, the challenges caused by the COVID disruptions continue. Currently, one of the big challenges is the shortage of labor and the subsequent supply chain issues. Estimates have shown that if pre-COVID trends had continued from March of 2020, the United States would have 2.4 million fewer retirements than where we have today. These trends, coupled with job growth that exceeded forecasts, and we have a labor shortage that we haven’t seen since World War II, according to Goldman Sachs.
Many believe this is not a temporary problem, but an acceleration of a looming trend that existed prior to the pandemic. Since 76 million Baby Boomers were born between 1946 and 1964, the birth rate has been on a steady decline. This leaves us with fewer workers to replace retirees, a problem that has always been there but was significantly magnified and accelerated by the pandemic. There are obviously numerous reasons nationally, regionally, and locally contributing to the labor shortage. Regardless the causes, employers and consumers are feeling the challenges of this gap. Depending on the source and industry, economists predict this labor shortage could last a few more years and some say it could last up to a decade. We are in a situation where “Help Wanted” signs, increased wages, and better benefits will not solve the problem, because there simply are not enough people to fill the need. Across the United States, companies are turning to a philosophy known as Lean Six Sigma to examine and reinvent their business processes in order to reduce the non-value added work that is occurring within their organization. Lean Six Sigma is a blend of two improvement philosophies: “Six Sigma” which focuses on reducing variation in processes to achieve high quality products and services. “Lean” is focused reducing non- valued added work to reduce the time and effort it takes to execute a process. Non-value added work includes rework, errors, delays, searching, redundancy and other production problems. It’s the work that costs us (labor) time but doesn’t move products or services closer to fulfilling customers’ needs.
Central Wisconsin Report - Spring 2022
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