Labor Shortage Forces 75% of Businesses Towards Automation


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As workers across the country walk out on the job and demand more flexible hours, businesses of all sorts are facing a challenging labor shortage. In fact, in our recent survey of 1,250 business owners, just 13% said that the labor shortage has not affected their business.

However, the majority of respondents are finding ways to cope with the lack of staff, from automation tools and upskilling current employees to paying higher wages to attract new workers. We detail the findings below, including:

  • 3 out of 4 business owners have considered or invested in automation solutions in the face of the labor shortage
  • Of those that have turned to automation, more than half believe this shift will permanently cut back labor
  • 71% of business owners surveyed said they had considered or invested in freelance or offshore labor in the face of the labor shortage
  • 73% believe the labor shortage will lessen as a result of unemployment benefits ending

Of those surveyed, 16% work in the tech field (including consulting, information services, and software), 9% are in the business sector (including advertising, marketing, and finance), 8% are in manufacturing and construction, and 5% in retail, hospitality, and food service. The remaining respondents were from a wide variety of professional backgrounds.

Resources Are Shifting Away From Salaries, Many Believe the Change Will be Permanent

To continue to make ends meet without a full staff, business owners are turning to more flexible solutions. As an alternative to full-time employees, 71% of business owners surveyed said they had considered or invested in freelance or offshore labor instead. 75% also stated that they have considered or already invested in automation tools as a result of the workforce shortage. Of those who have embraced automation, 55% stated that they believe this shift in their business will permanently cut back labor for the foreseeable future.

Marketing executive Huy Nguyen commented, “Freelancers may require less training and can be more specialized to handle special projects or offload specific tasks to free up the burden on existing employees to handle more core jobs.”

“There are some industries such as service and hospitality where using remote workers or freelancers may not be as easy to adopt,” he continued. “Those industries are looking towards automation and self-service technology to provide a more personalized experience to their customers. The labor shortage is immediate and some of these solutions may take a longer time frame to implement, however businesses are more motivated now to accelerate the adoption of new technology to future-proof their businesses.”

Business Operations Forced to Change Due to Hiring Struggles

In addition to freelance, offshore, and automation alternatives, 72% say they have had to pivot their offerings as a result of the labor shortage, for example, by decreasing open hours or selling more niche products like subscription boxes. 71% also say that they have implemented upskilling or reskilling training programs to better help current employees fulfill jobs that business owners would have otherwise hired someone to do.

Business Owners Willing to Compromise, To an Extent

In order to address some of the most widespread reasons employees are walking out on the job, the majority of business owners are willing to compromise. 75% stated they would be willing to pay higher wages to attract new workers, and 76% said they would also be willing to increase benefits for new employees. The results were somewhat more divided when it comes to the issue of a $15/hour minimum wage. 59% of respondents said they thought that $15/hour is a fair minimum wage, while 22% maintain that it is too high.

Majority Believe Labor Shortage Will End With Unemployment Benefits, But Will the Jobs Still be There?

As most states are ending their unemployment benefits by September (and many have ended them already), some workers who walked off the job may feel pressure to return to the labor force without the extra income, though recent surveys have indicated this may not be the case. However, business owners remain optimistic about this deadline as 73% stated they believe the labor shortage will lessen as a result of unemployment benefits coming to an end.

“The extension of federal unemployment benefits is one factor that may be contributing to the labor shortage and I can understand the perception from business owners who may think this is a root cause,” Huy added. “I believe we will see more job openings filled when these programs end because people need money to live, however, there are other considerations such as child/family care needs and people changing industries to find jobs that provide greater benefits such as remote work, flexible schedules, and greater pay.”

However, since the majority of business owners believe the shift to automation will be permanent, and since many have already pivoted to upskilling and freelance work, it’s possible that the positions that many are desperate to fill now may not exist by the time people want to take them.

Survey Methodology

All data found within this report is based on a survey commissioned by and conducted online by the survey platform Pollfish. In total, 1,250 U.S.-based business owners were surveyed on July 20, 2021.

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