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    How Will the Current Labor Shortage Impact Your Business Operations?

    Businesses in almost every industry and across all sectors are currently facing a critical labor shortage. Following a year of COVID-19-related disruptions, the labor market in 2021 is causing major staffing problems for small to mid-sized businesses. The most widespread challenge businesses are facing is their inability to find and hire qualified workers for both entry-level and skilled positions.

    In response to the labor shortage, some businesses have had to scale back their operations, reduce hours, or close their doors altogether. The latest data from the U.S. Chamber of Commerce paints a stark picture of a national economic crisis that shows no signs of abating:

    • There were 9.7 million vacant job openings in the United States—a record high—in April 2021. This is double the number of vacant job openings (4.63 million) in April 2020.
    • There are approximately half as many available workers for every open job (1.4 available workers/opening) across the country as there have been on average over the past 20 years (2.8 historical average)—and the ratio continues to fall.
    • In several states and several industries, including hard-hit sectors like education and health services as well as professional and business services, there are currently fewer available workers than the total number of jobs open.
    • More than 90% of state and local chambers of commerce say worker shortages are holding back their economies, and more than 90% of industry association economists say employers in their sectors are struggling to find qualified workers for open jobs.

    In this blog post, we’ll take a deep dive into national employment trends and discuss the impact the current labor shortage is having on small to mid-sized businesses across the country. We’ll also let you know how partnering with a PEO could help your company solve staffing issues by improving recruitment strategies and streamlining the hiring and onboarding process.

    Worker Availability Has Declined Sharply in 2021

    The Worker Availability Ratio (WAR) measures the number of available workers against the number of available job openings. The national Worker Availability Ratio in the U.S. has fallen sharply in recent months. There are now approximately half as many available workers (1.4) for every open job across the country as there have been on average over the past 20 years (2.8 historical average).

    Industries Facing the Most Acute Labor Shortages

    While nearly all regions and industries are struggling with not being able to find and hire qualified workers, recent data indicates that the problem is particularly acute in several states and industries. Employees who can fill vacant positions in education and health services as well as professional and business services are particularly hard to find.

    According to the Chamber of Commerce, the following industries have a WAR below one, meaning jobs are more readily available than the number of potential workers in that industry who could fill them.


    Worker Availability Ratio (WAR), Q2 2021

    Other Services


    Leisure and Hospitality


    Wholesale and Retail Trade




    Financial Activities


    Professional and Business Services


    Educational and Health Services


    Government and Public Education


    Difficulties Finding Qualified Entry-Level and Skilled Workers

    Small to mid-sized businesses in nearly every industry are having a hard time filling both skilled and entry-level positions. This is as true for jobs in advanced manufacturing and computer software as it is for those in the hospitality and leisure industry.

    The U.S. Chamber of Commerce recently surveyed economists at some of the nation’s top trade associations to ask about the workforce challenges in their industry. Two-thirds (76%) of the respondents reported that businesses in their industries find it “difficult” (52%) or “very difficult” (24%) to hire workers right now, and less than 1% of business leaders surveyed said that it was “not difficult at all.”

    PEO Services Provide Staffing Solutions for Small to Mid-Sized Businesses

    Many small to mid-sized businesses are currently drowning in the waters of the critical labor shortage. A Professional Employer Organization (PEO) is a company that specializes in the management of administrative and human resource functions for businesses. PEO providers can offer struggling organizations a lifeline to help solve staffing issues by improving recruitment and retention efforts, and by streamlining the hiring and onboarding process.

    Not all PEOs provide the same level of service. When it comes to making strategic decisions for your company, you’ll want to work with a trusted partner who has a thorough understanding of the labor market, your industry, and your business in particular.

    When you work with SWBC PEO, you’re gaining the guidance of a team of experts who will take the time to get to know your business, help identify current staffing problems, and offer knowledgeable advice on how to attract top talent, reduce employee turnover, and keep your business on track through the current labor market disruptions.

    Learn how to combat the national labor shortage. Download the whitepaper!

    Norman L Paul, Jr., J.D.

    Norman L Paul, Jr., J.D. is CEO of SWBC PEO. He is responsible for overseeing the company’s professional employer services, including payroll, employee benefits and benefits administration, workers’ compensation, and HR support for more than 14,500 shared employees in Texas and 40 additional states. Norman also serves as Corporate Counsel for SWBC PEO, providing guidance on compliance issues and conducting client training.

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