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Labor shortages in 2023 have challenged some industries more than others.
A recent analysis published by the U.S. Chamber of commerce highlighted specific industries that have been experiencing the brunt of labor shortages in recent years. These retention challenges were caused in-part by The Great Resignation, where over 50 million workers left their jobs in 2022 — following 47.8 million who did the same in 2021.
The Chamber of Commerce found that industries requiring in-person attendance and those traditionally offering lower wages, such as food service and hospitality, have faced challenges in retaining workers in 2023. The Accommodation and Food Services sector, for instance, has seen quit rates consistently above 4.9% since July 2021. In contrast, the report found that the health care and social assistance sector, despite a high number of job openings, has maintained a relatively low quit rate.
Other industries experiencing above-average labor shortages, as highlighted by the U.S. Chamber of Commerce, are:
- Retail Trade: The quit rate for the retail trade industry has been around 3.3% in 2023, which is higher than the national average quit rate of 2.6% as of March 2023, according to the analysis.
- Transportation: The transportation industry is reported to be among those with the highest numbers of job openings, suggesting a significant labor shortage.
- Health Care and Social Assistance: This industry is reported to have a high number of job openings. However, it also has maintained a relatively low quit rate. The sheer number of job vacancies is also suggestive of an industry experiencing a labor shortage.
- Durable Goods Manufacturing: This industry is reported to have “more unfilled job openings than unemployed workers with experience in their respective industry.” According to the U.S. Chamber of Commerce, if every “unemployed individual with experience in the durable goods manufacturing industry were employed, the industry would fill only around 75% of the vacant jobs.”
- Manufacturing: The manufacturing industry is reported to have lost approximately 1.4 million jobs at the onset of the pandemic and has since struggled to fill job vacancies. As of March 2023, the U.S. Chamber of Commerce reports that there were 693,000 open manufacturing jobs.
According to the U.S. Chamber of Commerce, hiring rates have consistently exceeded quit rates since November 2020, suggesting that while there were many workers leaving their jobs, they were also finding new employment elsewhere.
There are unique factors that are found to be contributing to the ongoing labor shortages felt in 2023. The data points to remote work preferences having an influential role in reshaping the labor landscape. The changing preferences towards remote and hybrid work has been particularly evident in sectors like finance, management, and IT/telecommunication. Despite major calls for a return to the office which has caused new remote work opportunities to decrease recently, the preference by workers still remains significantly higher than pre-pandemic levels.
Solutions to labor shortages and employee retention are diverse, with no one-size-fits-all answer. For businesses leaders and employers, these workforce trends show the importance of adaptability. To attract and retain top talent, many companies have implemented hybrid work models, flexible scheduling, and other innovative benefits.
The increasing number of workers seeking better work-life balance, flexibility, and meaningful company culture is likely to persist in the coming years with Gen Z seeking better opportunities and adding to the already multigenerational melting pot of work-life preferences. As industries grapple with these changes, the ability to adapt and offer competitive benefits will be important to grow and remain competitive. The U.S. Chamber of Commerce emphasizes the importance of businesses taking proactive steps, such as expanding childcare access and offering opportunities for upskilling.
