How Data-Driven Insights Can Help Your Business Combat Labor Shortages

Labor shortages are plaguing almost every industry as of late. Employing data-driven insights strategies could help your business take proactive measures to protect against challenging business outcomes associated with short staffing.

A recent statistic from the U.S. Bureau of Labor reported that out of the total population of unemployed people in the United States, 15% had voluntarily left their jobs. It’s no secret that the COVID-19 pandemic has changed the way people work; what’s more interesting are the changes we’re seeing in how people are willing to work. High attrition rates and labor shortages have put significant strain on those who choose to stay at their jobs, leading to workload dissatisfaction and increased burnout rates.

Some industries are being challenged more than others, with retail seeing an average 4% quit rate, and manufacturing suffering losses of roughly 1.4 million jobs at the start of the pandemic. The Healthcare and Life Science industries are faced with a similar situation. According to the Nursing in the Time of Covid Report, 34% of nurses planned to leave their role by the end of 2022. Out of that 34%, almost half cited burnout as their primary reason for leaving.

To help tackle these widespread labor shortage challenges, as a first critical step, we encourage Human Resources departments (particularly in the retail, manufacturing, healthcare, and life science industries) to take advantage of data-driven insights and workforce management systems. These systems should leverage solutions involving data acquisition, data integration (of internal systems and externally available data), AI/ML-supported advanced analytics, decision intelligence, and possibly even generative AI (like ChatGPT). These systems should also be supported by robust data and analytics governance processes (both manual and technical), preferably with automation as a significant component. 

By taking a deeper dive into Data & Analytics, HR professionals can gain greater insight into the labor challenges they’re experiencing and leverage data to provide actionable recommendations within their respective industries. Tracking items such as employee engagement, productivity, operational efficiency and compliance, and technology management can be pivotal steps towards maintaining a consistent workforce and avoiding the costs associated with labor shortages.

Retail

HR can employ workforce management systems to gain data-driven insights and automatically track staffing and traffic at each of their store locations. This can help HR teams to identify which locations are experiencing the greatest staff shortages and prioritize those locations for recruitment efforts. 

For example, a recent Forrester study with WorkJam revealed that 74% of decision-makers in retail, travel, and dining industries report that frontline employee turnover is increasing due to rejection of previously acceptable working conditions such as commuting, office environments, and working hours. HR teams can employ Advanced Analytics solutions to help monitor working conditions, alongside other associated indicators for high turnover rates, by tracking multiple data streams and pulling insights to better address underlying issues.

Manufacturing

In the manufacturing industry, workforce management systems can be employed strategically using Data & Analytics to identify areas in the supply chain where production processes are most affected by labor shortages. By identifying these areas of need, organizations can better focus their recruitment efforts and consider task automation that analytics solutions might identify. Similarly to the retail industry, data can also be recorded and analyzed to determine factors contributing to high turnover rates so that HR can take steps to address these issues.

Manufacturing is particularly susceptible to turnover with the present dearth of qualified candidates available to hire. Studies show that even if every single skilled worker in the U.S. was hired, 35% of all manufacturing jobs would still remain unfilled. Implementing the proper Data & Analytic strategies in a workforce management system can help HR teams in manufacturing organizations stay on top of factors affecting turnover and take preventative measures far in advance.

Healthcare & Life Science

The healthcare industry has been critically impacted as a result of the current labor shortage. HR teams in healthcare organizations can implement Advanced Analytics strategies to identify staffing patterns to determine where new hires are most urgently needed. With time, the data collected can also be used to predict future labor shortages and implement proactive measures to address them. This may involve tracking and analyzing data on employee turnover, retirements, and sick leave to forecast future staffing needs.

In the pharmaceutical industry, labor shortages may directly translate into product shortages. The Adderall shortage is a prime example of this correlation: Teva Pharmaceuticals recently reported a 2-3 month production delay due to labor shortages. To help prevent these situations, HR teams can leverage data and AI/ML-driven analytics to identify areas where labor shortages are likely to occur, such as specific departments or geographic locations. They can also use Data & Analytics to determine the most effective recruitment and retention strategies to mitigate these shortages. While labor shortages are just one potential cause for drug manufacturing delays, Advanced Analytics strategies can help mitigate additional causes for delays, such as misallocation of raw materials or supply chain issues.

Overall, data-driven insights can be strategically employed to assist HR departments in these industries to proactively identify and address labor shortages, improve recruitment and retention efforts, and ensure that the workforce is aligned with the needs of the organization. In doing so, organizations can take preventative measures to avoid labor shortages and losses and increase productivity and efficiency.

SDG builds personalized solutions for organizations looking to employ end-to-end Data Strategies with proven techniques to accelerate and increase data-driven insights. Contact us today to learn how we can help your HR team take advantage of strategic data-driven insights initiatives to meet your business goals.