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Ever thought spotting a unicorn might be easier than finding a top-notch professional? This feeling resonates across boardrooms and virtual happy hours alike. Good people, from CPAs to HR managers, seem scarcer than ever. The stats from the U.S. Bureau of Labor Statistics lay bare a talent crisis, especially in the professional and business services industry. This isn’t nostalgia; it’s a real issue that data over the last decade and forecasts for the next clearly highlight.
The professional and business services sector, a conglomerate of NAICS codes 54, 55 and 56, is a significant employer of credentialed experts like accountants, lawyers and engineers. In 2022, it accounted for about 18% of all U.S. managers, offering a glimpse into the staffing situation in law offices, ad agencies and other business support services crucial across industries.
From 2013 to 2023, the sector saw 147.53 million hires barely surpass 142.47 million separations. With businesses struggling to fill roles, the number of unfilled job postings more than doubled, signaling an 8.3% compound annual growth rate. This sector’s strength, fueling growth and decreasing risk, is now its Achilles’ heel, with open positions ballooning from 765,000 in 2013 to 1.7 million in 2023.
The baby boomer exodus has significantly contributed to this talent void. The Society for Human Resource Management points to a big skill gap following their retirement, with about 3.2 million boomers retiring between 2019 and 2020 alone.
This departure left a noticeable dent, with Gen Xers and millennials suddenly facing leadership and experience gaps.
The BLS data reflects this widening chasm. From 2018 to 2020, open positions held steady at about 1.2 million, then surged almost 60% to average 1.9 million from 2021 to 2023. Although this number dipped to 1.7 million in 2023, likely due to tighter monetary policies, the challenge persists. This “soft landing” labor market resulted in an average wage increase of 4.3% despite the economic brakes being applied through higher interest rates. And while these policies have been noticeable in markets like real estate, the labor market has shown resilience in hiring and wages during the current quarter.
So, what’s next? The key lies in innovation. The COVID-19 pandemic supercharged hybrid and remote work models, proving that efficiency doesn’t always require a traditional office. This evolution in work practices isn’t just about filling vacancies; it’s about redefining our approach to work.
As we navigate this labor gap, businesses are exploring creative solutions like fractional employment and AI. The future of work is about flexibility, where your next CFO might be finalizing reports from a beach in Costa Rica. Stay tuned as we explore these innovative strategies to bridge the professional labor gap.
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