The Worst Labour Shortage In US History Is Coming (And What Employers Need To Consider)

On Sunday, July 12th 2026 the Washington Post’s Jon Marcus published “Why recruiters can’t find workers and new grads can’t find jobs (it’s not AI)”.  In it, he states that, it’s the “largest labor shortage the country has ever seen,” and that it “could hobble the American economy for years to come.”   Marcus also identifies a “mismatch between new graduates’ skills and employers’ needs” as a contributing factor.

But wait, there’s more…

  • There will be shortages in the tens or even hundreds of thousands of nurses, physicians, teachers, engineers, pharmacists, mental health counselors, and construction workers.
  • Far fewer students are majoring in health care fields than are needed to meet demand.
  • Between 2024 to 2032, more than 18 million college-educated workers will leave the labor force while fewer than 14 million enter it.
  • College and university enrollment in 2023 was down by nearly 2 million students.
  • The low birth rate since 2010 means the number of college-age Americans is forecast to decline by another 13 percent through 2041.
  • 41 percent of the home health aides needed to care for the nation’s aging population have historically come from somewhere else.
  • Fewer than half as many people are entering the construction trades as are needed.

 

Note: This report is entirely USA-based.  During Covid the USA fired all workers vs. furlough in most other countries.  Afterwards, 50+ year old Americans couldn’t get jobs because of age discrimination.  Far right sentiments and distrust of science have driven people away from education.  The USA is also discouraging immigration, and many people no longer wish to move there (or cannot get in).

 

What this will mean for employers

Accept that you’re going to be affected by this and start being proactive.

Look at your organization and identify where the gaps will occur and where they’ll be most severe.  Start succession planning so that you’re not caught with your pants down when Bob retires, taking 30+ years of institutional knowledge and experience with him.

  • Are those left standing ready to assume his role?
  • Are they good leaders?
  • Do they have adequate managerial skills?
  • Do they need to be coached, mentored and developed, if so, in what areas?
  • Do you even know?

It’s always cheaper to ‘hire from within’ than to recruit externally, but who’s ready for promotion and how do you ensure that they are ready?

Making decisions without adequate information will inevitably lead to problems.  Luckily, there are ways to ascertain all of these things, because there’s a test for that!  If you want to ensure that someone is ready for a promotion assess them with things like the Leadership Potential Test or Leadership Potential Assessment.

Help your incumbent leaders obtain the skills that they need before they assume more responsibilities by administering tools like the Leadership Skills Profile, Leadership Development Report, or True-to-Life™ Leader.

There are also thousands of skill and aptitude tests that employers can use to assess an incumbent’s proficiency in numeracy, administration, sales, MS Office, finance, customer service, healthcare, policing and public safety, and more.

The worst thing to do in the face of a shrinking and increasingly competitive labour pool is to fill a role with the first warm body that comes along.  Due to increased demand for workers, employers may also no longer be able to require that candidates have things like 2-years’ experience to qualify.  Employers may have to revise some must-have qualifications and be prepared to provide more on-the-job training.  Thus, it may not always be practical to administer a skills test, especially when time is of the essence to fill a position.

In those cases, shift one’s focus and test for learning or training potential, using tools like the Personnel Assessment Form, Coaching & Trainability Attitude Assessment or Employee Attitude and Personality Test.

Ensuring a good organizational or job fit will also pay dividends by helping to get it right the first time.  That increases hiring success rates, reduces turnover, and saves a lot of money.  Worry about their customer service skills later and focus on what they bring to the table naturally that meets your requirements.  Tools like the Work Personality Index measure traits like:

  • Energy and Drive (Ambition, Initiative, Flexibility, Energy, Leadership, Multi-Tasking, Persuasion, Social Confidence)
  • Work Style (Persistence, Attention to Detail, Rule-Following, Dependability, Planning)
  • Working with Others (Teamwork, Concern for Others, Outgoing, Democratic)
  • Dealing with Pressure and Stress (Self-Control, Stress Tolerance)
  • Problem Solving Style (Innovation, Analytical Thinking)

There are lots of other tests that do similar things and which can help you figure out which candidates to focus your attention on.

If you’re not testing at any point in the employee lifespan you’re leaving money on the table, making hiring and promotion decisions without all the information available to you, and opening the door to problems down the road.  We’re talking about bottom line stuff.  Employers can’t afford not to test when the stakes are this high.  If finding workers is hard to begin with, replacing people who didn’t work out will be even harder.

What about the job seekers?

There are going to be a lot of people who will be unsure of what field they want to go into or who have no good understanding of what transferrable skills they have that could be parlayed into an occupation.

Organizations that help those who’ve been downsized or aged out of a job, but who aren’t yet ready to retire, could also benefit from the many assessment tools available to help people regain focus, capitalize upon their existing strengths, and re-enter the workforce.

There is a plethora of effective and inexpensive tests that can help individuals and intake workers find success in a challenging employment market too.  They include things like:

There’s no doubt that the coming worker shortage is going to be problematic for everyone.  Those who act strategically and start succession planning now will lessen the impact of what’s coming.  Finding new ways to identify future talent that doesn’t rely primarily on hard skills will also enable businesses to navigate the coming storm.

Firms like Creative Organizational Design are here to help, because there’s a test for that!

We can help you find the right solutions for your needs.

Don’t guess, test!

 

David Towler is President of Creative Organizational Design, a firm offering nearly 50 years of expertise specializing in employee assessments and has over 5000 different tests available. Creative Organizational Design has assessments designed to help employers screen out other people’s rejects, assess skills, aptitudes, attitudes, and ‘fit’ within an organization.  For more information about the many options available and to obtain expert help in selecting the best tools for your needs please contact us because no matter what personnel challenges you’re facing – there’s a test for that!  Please send comments about this article to dtowler@creativeorgdesign.com.

 

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