Indiana offers businesses an exciting place to live and work, with ample business opportunities and a sizable population to call upon as professionals.
However, Indiana has begun to encounter a worker shortage as a result of factors like the pandemic and the recent influx of business and opportunities into the state. With hindrances like childcare and health services that keep many out of the labor force, this shortage of qualified workers has made it harder for businesses to find the workers they need to expand, which hurts Indiana’s economy overall.
Current State of Indiana’s Labor Market
Indiana’s economy currently reflects a significant labor shortage that impacts the ability of local businesses to grow. Its labor index, as determined by the U.S. Chamber of Commerce, is .72, indicating that there are only 72 available workers for every 100 job openings in the state. The state government has worked to create business-friendly policies, which have helped attract businesses to the area, but the lack of available workers has made it increasingly difficult for these companies to experience healthy growth, creating a widespread problem.
Key Factors Contributing to the Indiana Labor Shortage
In recent years, Indiana has encountered a variety of factors that have all contributed to the current labor shortage. Some of the most commonly attributed culprits include:
- Population demographics. The state has a finite number of able-bodied people in the prime working age to take on these valuable positions. When new businesses move into the area, this demographic limitation means that not enough people exist for all the positions. With people having fewer babies overall, this problem is not likely to go away.
- Migration patterns. As people experience the benefits of flexibility like remote work, it impacts where they want to live and the types of jobs they will take.
- Skills gap. While people might be qualified for entry-level positions, businesses that require more specialized skills are seeing a shortage of qualified people.
- Changing workforce expectations post-pandemic. The pandemic changed many things about modern society, including the number of people accustomed to not working. Additionally, many more became used to remote work, making it more challenging to attract employees.
These are just some of the major factors that have left Indiana with a labor shortage.
Strategies for Businesses to Address the Indiana Labor Shortage
Fortunately, businesses have a variety of strategies at their fingertips to help them navigate this labor shortage and still keep their businesses healthy. Here are some solutions to the labor shortage to get started.
- Enhance your recruitment efforts. Tap into underutilized labor markets by looking for people who might have received experience or education in unconventional ways. Create more flexibility in the job to appeal to those who want more of a remote setup.
- Strengthen employee retention. The best way to avoid experiencing the effects of a worker shortage is to hold onto your existing employees. Techniques like competitive wages, improved health benefits, and a work-life balance make your business the place to work.
- Foster training and development opportunities to close the skills gap. Help your employees build the critical skills that are missing in your workforce. Offering employee enrichment and learning not only makes you a better employer but also prepares your existing workers for the critical roles that you have trouble filling.
How Payroll and HR Technology Can Help
As you set out to consider how you can improve these workplace features to bring in more effective employees, your payroll and HR technology can help you. These positions within the business regularly interact with employees about their benefits and job satisfaction, so making improvements with these branches can keep your employees happy.
Start by using your technology to reduce administrative burdens. Automation can help you manage a variety of processes with fewer personnel, giving you the time you need and freeing you to work on other projects.
Your HR data also provides insight into your workforce. Their data on employee durations and the interactions, before they leave, can help you find the weak point in your employee lifecycle. You can then better engage these valuable employees and have more robust retention strategies.
Finally, turn to your payroll and HR department for help streamlining payroll to improve compliance and reduce turnover. Payroll offices handle more than tracking employee hours. They also help with taxes and withholdings. Using streamlined payroll processes, you can count on the system to track your applicable regulations and the amount due.
The Role of Government and Industry Collaboration
The Indiana workforce development programs and initiatives have been developed to help train employees and prepare them to take on the roles currently impacted by the shortage. The Indiana Economic Development Corporation has also partnered with organizations to support out-of-state workers moving to Indiana to take some of the open positions. Local communities in the state have also offered incentives to attract more people to their areas.
These arrangements try to correct the problem by bringing in available workers to fill positions and build communities. However, others in the area also speak about the importance of providing childcare support and mental health support to increase the number of people eligible for the workforce.
Navigating the Labor Shortage with Smart Strategies
As Indiana continues to face a labor shortage that leaves thousands of jobs unfilled, businesses must get creative about retaining their workforce to protect their operations and ensure growth. Businesses can better navigate these workforce challenges by adopting strategies like offering higher wages and improved benefits.
If you’re looking for ways to overcome labor challenges and improve your business operations, contact ASAP Payroll. Our team is ready to assist with your HR and payroll needs, helping you build a stronger, more resilient workforce.
