Shifting Workforce Dynamics

The current worker shortage in Vermont may signify “an early look at where the rest of the country could be headed.” In short, there are simply not enough workers to replace aging baby boomers in the workforce. Low unemployment rates have prompted some typical attraction and retention strategies—e.g., signing bonuses, increased wages, other benefits—while also driving investment in technology (including automation) and supplemental workforce strategies (e.g., generally broadening employee searches and utilizing immigrant labor).

The situation in Vermont is in contrast to wage growth trends which slowed in 2023 (while remaining above pre-pandemic levels), and signs that suggest a shift toward even more moderate growth. Paychex CEO John Gibson considers this a “stabilization” and cooling-off of post-pandemic trends. Meanwhile, turnover has generally slowed, and companies have begun to shift away from various attraction initiatives.

Business Takeaway: While much seemingly points toward lower turnover and pre-pandemic wage growth, the situation in Vermont (and elsewhere) does merit consideration. For businesses, striking an appropriate balance between attraction and retention, in conjunction with a changing workforce, only gets more challenging in a seemingly unpredictable economy. What will happen to your industry’s workforce in the coming years?