The U.S. Labor Shortage & How Employers Can Keep Work staff Around Without Reducing Profits

If you’re like many employers around the U.S., you’re facing a labor shortage that’s leaving you desperate
with angry customers and difficult conversations with upper management. In this blog post,
entrepreneurs Colton Ward of Bespoke Media and Parmi Cheema of Jobility ( study the
market effects of the labor shortage, and what employers can do to surmount their employment scarcity
obstacles. To begin with, let’s try to answer several questions Hirers undoubtedly have, such as:

Why aren’t we getting candidates for our positions like we used to?

Where are these candidates now?

What can I do to get new employees to work for my company, and retain them?

Turns out, according to this thought piece from NYTimes– we’re not necessarily facing a labor quantity
issue, but rather a labor quality issue. Workers are getting burned out, particularly in service and
hospitality positions, and stress levels during a pandemic are at near record highs. Couple mask
mandates, long working hours with particularly unruly customers, low wages and job uncertainty, and
you’ve created a widespread walk-out maelstrom. It’s no wonder employees are quitting in droves, but
now we’ve reached a critical point for employers- facing the decision to either find unskilled workers to
train and pray that they don’t abandon their posts, pick up the slack themselves or simply pay employees
a higher wage. Let’s assume employers aren’t going to flip burgers for 16 hours a day, nor would they
prefer hiring workers with zero experience, leaving the only feasible options to increase wages or try
something different- like leveraging the gig economy.

But if I pay my workers more, that means my company’s profits will dip, right?

While it’s not universally the case, numerous studies indicate that when managers pay employees more,
workers are more productive, stick around more, and generally increase profits relative to pre-wage
hikes. Let us dispel certain preconceived notions regarding increasing employee wages:

If I give my workers raises, won’t I have to reduce my work staff?

Standard economic models would indicate that as wages increase, employment decreases, however one
found that, in fact companies that raised wages saw little to no reduction in employment. Let’s try
and qualify these findings: why wouldn’t employers need to reduce their staff if they’re paying workers
more? One possible explanation is what psychologists call a reciprocity effect; basically when workers get
paid more, they tend to return higher earnings in-kind by being more productive, providing better service
to customers/clientele, and helping build better brand equity for their employer.

But if I raise wages, won’t I have to raise the prices of my products/services?

One empirical study observing wage increases in over 400 fast food restaurants in New Jersey and
Pennsylvania yielded mixed results in their findings after increasing the minimum wage for their various
locations. This blog post won’t attempt to generalize the effects of wage hikes on the price of goods and
services; however the salient point is that increases in wages don’t necessarily indicate a direct
correlation between the two. Still unconvinced? This study found that the marginal benefit of adding
labor to stores actually exceeds that of the marginal cost. Basically, for all intents and purposes, your
company will make more money when you increase employee wages.

In closing, a labor shortage presents an opportunity to provide employees better benefits and quality of
life, which could catalyze your workforce to provide quality, productive work. During a labor shortage,
companies are taking advantage by providing more training to employees, which will make them feel
more purposeful, happier, stay at their positions longer, and most importantly will have a greater net
effect on your bottom line.

One of the quickest and most impactful solutions involves making changes to the recruitment process,
using Temp Agencies and Gig platforms is also another way to find short term workers quick. Gig
platforms like Jobility – allow employers to get matched with shift workers that are readily available and
fill those shifts when they have a high demand and can reduce the fill time by getting workers that are
available and make it easy to onboard and paying those temp workers with ease. To sum things up, pay
your workers more and try temp or gig workers to fill openings fast and save on operational costs.

As the a forementioned studies repeatedly manifest, it’s time to take the big leap and pay real wages to
your employees. And if not… well, those burgers aren’t going to flip themselves.


Colton Ward, CEO. Bespoke Media (

Parmi Cheema, CEO Jobility Inc (