Supporting a more inclusive talent strategy
According to the U.S. Chamber of Commerce, the U.S. is experiencing one of the most persistent and complex labor shortages in modern history. No one sector is being affected by this; everyone is feeling the strain, so HR leaders need to rethink how they attract, hire, and retain talent.
What's causing the labor shortage?
Three demographic trends are shrinking the size of the active workforce in the US:
1. An aging population
Baby Boomers are retiring in record numbers—more than 10,000 Americans turn 65 each day, and the pandemic accelerated many retirements.
2. Early retirements and health-related exits
The pandemic prompted a wave of early retirements and labor force exits due to long COVID or caregiving responsibilities.
3. Decline in birth rates
Fewer younger workers are entering the workforce due to long-term declines in the U.S. birth rate. It tightens the pipeline of future workers and contributes to a shrinking labor pool over time.
There are simply fewer people to fill roles and this trend isn’t going anywhere anytime soon. In response to a tight labor market, many employers are broadening their candidate pools by shifting away from degree-based hiring toward skills-based hiring. This approach prioritizes competencies over credentials and creates more inclusive access to opportunity.
According to a report from Harvard Business Review, the number of job postings that required a four-year degree fell by 46% between 2017 and 2021 for middle-skill roles. Major employers including IBM, Google and Accenture embraced this shift, offering “earn while you learn” apprenticeships, digital credentialing and skills assessments to evaluate job candidates.
Workers also now have higher expectations, including:
- Defined career paths and internal growth opportunities
- Access to mentorship and coaching
- Continuous learning and upskilling resources
- Alignment with purpose and company values
In a tight labor market, HR leaders need to go beyond traditional recruitment tactics. How can you combine technology, equity, and mobility to stand out in a competitive market?
AI-driven hiring tools
AI-powered recruitment platforms are helping organizations recruit, streamline sourcing and screen candidates more effectively, which reduces the time-to-fill openings. AI tools can:
- Automate resume screening and match candidates to job descriptions
- Use natural language processing to identify transferable skills
- Reduce unconscious bias through structured assessments
Underused talent pools
To close labor gaps, HR leaders can broaden their hiring lens to include nontraditional and under-represented groups such as:
- Veterans supported by programs like Hiring Our Heroes
- Individuals with disabilities in networks like Disability:IN that connect companies with diverse talent
- Career returners—those re-entering the workforce after caregiving, education or career breaks and early retirement
- Justice-impacted individuals through fair chance hiring initiatives
These groups often bring unique experiences, loyalty and untapped potential and they benefit from targeted support, inclusive onboarding and accessible career pathways.
Focus on internal mobility
Rather than looking outward for every new hire, organizations can build from within by cultivating internal talent. It not only fills open roles, but also boosts retention, morale and institutional knowledge. Best practices include:
- Implementing a skills inventory to match employees to open roles
- Hosting talent marketplaces where internal candidates can explore growth paths
- Investing in manager training to support career development conversations
- Creating upskilling programs tied to promotion readiness
For more details on this strategic approach, as well as three more strategies to power up your people team, download our complete eBook, Reinventing HR.
