Welcome to the “Sansdemic”

Welcome to the “Sansdemic”

Today, the top three concerns among all the leaders I work with are COVID, supply chain issues, and the ongoing labor shortage. Unfortunately, I believe none of these issues will be resolved any time soon. While all three will create ongoing struggles for companies, the labor shortage is especially unnerving.

Where Have All the Workers Gone?

For several years before COVID, many of the organizations I worked with were having difficulty finding people. I initially chalked this up to the idea that most of these businesses had high standards and were growing. After all, why wouldn’t it be tough for a growing company that was selective and deliberate about its culture to have difficulty finding enough people? However, I saw signs that the problem went deeper than that.

By mid-2019, when people asked about the biggest challenge facing organizations, my standard reply was the difficulties finding employees with the required experience and qualifications to fill positions at all levels. I sensed that a demographic shift was driving the challenge, but I didn’t explore the issue further.

Fast forward to COVID and 2021…

The labor shortage has intensified, and everyone keeps asking, “When will it get better?” My answer has been, “It won’t improve any time soon.” And I rattle off several demographic points in support of that response.

Then I came across a report from Emsi published in April 2021 that pulls the demographic threads together. Emsi’s report is titled THE DEMOGRAPHIC DROUGHT: How the Approaching Sansdemic Will Transform the Labor Market for the Rest of Our Lives. (By the way, the term “sansdemic” is new to me. It’s a combination of “sans” and “demic.” So, literally, it means “without people.”

Emsi has analyzed the data and concluded that many nuanced factors account for the labor shortage. In summary, they have identified three mega-trends impacting the past, present, and future talent pool.

1) The first factor is the ongoing exodus of Baby Boomers from the labor pool. This has been going on for several years with approximately 2 million people retiring annually. In 2020, an additional million Boomer workers exited the labor force, spiking the retirement stat to 3 million.

2) The second factor is the labor force participation rate (LFPR) of prime-age Americans. In short, it’s at a record low. Working-age Americans are opting out of the traditional 40-hour-per-week gig for various reasons, including “lack of motivation and a shift in career ideals and work ethic.”

3) The third factor is our falling birth rate. The U.S. is simply not producing enough humans to compensate for the deficit in workers. Emsi’s report refers to this as the Total Fertility Rate (TFR). Currently, a TFR of 2.1 is required to maintain our current population base. For the sake of comparison, the TFR in 1960 was 3.7 versus 2020’s 35-year low of 1.7. Based on current trends, the U.S. population is projected to begin declining by 2062.

Once you acknowledge the reality that labor will remain tight for the foreseeable future, the question then becomes, “What can be done?”

How to Thrive During the Sansdemic

There is no “one way” to win the battle for talent, but there are things you can do to move the needle for your organization.

1. Shift Your Mindset.

Shifting your mindset requires acknowledging that the world you lived in before February 2020 has radically changed. In other words, there is “pre-COVID,” and there is “now.” For example, attracting employees is no longer as simple as hanging out a “help wanted” sign or posting an open position to a job board. You must now actively recruit for positions, which involves shifting your mindset. Shifting mindset is a difficult task, though. I encourage you to review my article, Managing Expectations and Shifting Your Mindset, for insight.

Shifting mindset also involves understanding the rise of stakeholder capitalism. Employees now expect more from your organization; if you don’t meet their expectations, they will go elsewhere.

2. Create a Winning Culture

You’re probably tired of hearing about “company culture,” but it’s a critically important component in your value proposition for employees. One of the ways you can begin to establish a winning culture is by getting crystal clear about your organization’s core values. Here are a few resources to get you started:

3. Automate

Throughout history, automation has often been a dirty word for labor rights activists. (That’s where the term Luddite comes from, after all). With that said, automation will be critically important to your organization’s future growth. There are many types of automation. For simplicity’s sake, I’d like you to consider automation within two broad categories: physical and digital.

Physical automation is when equipment either replaces a human or acts as a force multiplier for the human. It involves the use of robotics, cybernetics, or various physical machines.

Digital automation is when complex business processes are digitized and streamlined. It is often called “business process automation” and involves the use of different software applications, including artificial intelligence and automated workflows.

Regardless of whether you are hiring hands-on workers like machinists or knowledge workers like actuarial scientists, automation will be vital to navigating the sansdemic. Don’t think of it as replacing an employee. Instead, consider it the natural evolution of your business.

Want to Dig Deeper into the Topic?

Got questions about the talent shortage and how to navigate the 2020s? Give me a call! I’m always up for a good conversation and an opportunity to help.


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