'It's confusing' | Did the US talent market ever recover from COVID?

According to the latest data from the Pew Research Center, the pandemic caused several herculean shifts in the US jobs market.

One key change took place when workers of all age ranges quit their roles in search of something better or more meaningful, and younger demographics concluded that they expected more of an ethical conscience from their employers.

For this reason alone, more than 90% of the talent market is thought to have changed roles in some way.

And whilst the effects of this shift may have changed how companies view elements such as remote working or environmental and social governance, a perhaps more fundamental change in the talent market came when a whole generation of older workers chose to see COVID as an opportunity to quit the working world altogether.

A little more than half of adults ages 55 and older had ditched the grind by late 2021, compared with 48% in the months before the first case of COVID-19 was recorded.

It’s this group that have left HR and economists scratching their heads as to how they can address the acute need for talent, whilst accepting that a huge chunk of their talent pool is now gone.

To put this COVID-induced phenomenon into context, one estimate from the LA Times found at least 2.1million retired earlier than expected.

According to Anna Wong, Chief U.S. Economist at Bloomberg Economics, that number could be much larger, but there’s no real way of knowing. “It’s a very confusing picture,” Wong said. “We don’t even have good facts to work with.”

What effect is this unexpected exodus causing currently?

You need only look around to see that businesses are facing a stark battle for a limited talent pool. The jobless rate within the US is currently at a 53-year low – and as demand for talent grows, so does the shortfall.

And even for those still out of work, this is now far more likely to be a conscious choice, rather than an unwilling one.

The labor force participation rate, aka the share of the population that is working or looking for work, stands at 62.4%, below its pre-COVID level of 63.3%. Had the average rate preceding the pandemic held, the labor force would have had 1.1million more people in 2022.

Senior Economist, Didem Tuzemen, recently calculated in a report that there would be 2.4million more people in the labor force, had participation rates not slipped during the pandemic.

Most of the missing workers? You guessed it, older Americans who likely now choose not to continue working.

Realistically, this is a trend that has no end in sight. Older workers are extremely unlikely to return to the workforce to relieve some of the pressures on the talent market, and those who are actively working know the weight of their contribution, meaning likely a greater emphasis on retention in the years to come.

For those businesses struggling, it’s unclear to see when or how the fallout on the talent market from COVID will dissipate.