As the average birth rate in the United States has consistently decreased and the overall working population is aging, the country is on the cusp of a labor shortage.
Demographic drought — defined as a community lacking the skilled workers necessary to fill manufacturing jobs — has permeated throughout the United States causing regional economic leaders to take action to circumvent the phenomenon.
In Northern Kentucky, the NKY Chamber of Commerce hosted a panel of experts at this month’s Eggs ‘N Issues to dissect the problem and introduce potential solutions with the Northern Kentucky business community.
Dustin Lester, vice president of community consulting for Lightcast — a company that utilizes data to create hiring strategies — said demographic drought will affect Northern Kentucky, but also gave suggestions about what the region can do to alleviate the issue.
“I think a lot of things are coming together for the Northern Kentucky region where they’re really going all in on everything they can do to be on the forefront and cutting edge of talent development because they understand it’s an important thing for the residents of the region to provide new upscaling, rescaling and retraining opportunities,” Lester said.
The replacement level fertility rate is 2.1 births per woman. In 2020, the United States fertility rate fell to its lowest levels since the 1930s at 1.64 births per woman. 2020 was a year of unprecedented adversity for the United States population with the onset of the COVID-19 pandemic. While fertility rates have marginally improved in 2021 and 2022, the fertility rate is still well below replacement levels.
By the year 2034, older adults will outnumber children for the first time in United States history, according to Lightcast’s Demographic Drought report. The majority of regions in the country saw their working age population decrease from 2011 to 2021. During this time period, the country’s over-65 population grew by 16.1 million, while the under-25 population shrank by 2 million.
Current data suggests that this trend is likely to continue.
Population shifts are outpacing labor force gains, which can cause problems. The United States economy will need workers from every education level to grow, and the country’s economy is still primarily dependent on workers with a high school level education.
In Northern Kentucky, employers and business organizations are trying to find solutions to the issue.
“The U.S. population growth rate declined, and not keeping up with the birth rate replacement rate of 2.1 that is needed to sustain, if not grow a population, is a severe threat to the nation and region,” Lester said. “However, if you look at population growth trends, the projections on population increase in the region are favorable. It’s not an explosive growth of population, but it’s steady.”
In Northern Kentucky, which Lightcast classifies as Kenton, Campbell and Boone Counties, the population is 400,843 people and grew 13,229, or 3.4%, over the last five years. The region’s population is projected to grow 12,020, or 3.0%, over the next five years, which is slightly over the U.S. average projection of 2.6%.
On the employment side, 218,325 people are employed in the region. Employment grew 22,431, or 11.5%, over the last five years from 195,894 to 218,325. This outpaced the national growth rate of 1.8%. The region’s labor force participation rate increased from 64.8% to 66.7%. Over the next 5 years, employment is projected to grow by 17,500 or 8%.
Lester presented seven solutions for employers:
- Adopt flexible, creative work arrangements.
- Make the recruitment process simpler and more inclusive.
- Split jobs into tasks.
- Let workers grow into their jobs through targeted training.
- Consciously work to retain employees.
- Develop a less worker-dependent model moving forward.
- Remove barriers to population growth.
For business organizations such as the NKY Chamber and Northern Kentucky Tri-ED:
- Strengthen your understanding of regional talent and how to retain talent.
- Data-informed approach to identify hidden talent and opportunities to recruit talent from outside NKY/Cincinnati MSA.
- Continue strong business engagement to understand talent needs of industry.
- Ensure executive involvement to drive talent development & attraction initiatives.
- Facilitate cutting edge and robust talent development opportunities.
- Lead programmatic and policy opportunities around workforce development, familial support, & immigration moving forward.
- Align secondary & post-secondary programs to the needs of the regional market.
Another solution Lester highlighted was to activate hidden or disengaged workers.
“Some examples of hidden workers are people with disabilities, the long term unemployed, people with chronic health problems or mental health problems, people who have a history or even are currently having issues with substance abuse, people with gaps in their employment history, caregivers, ex-offenders, veterans and retirees,” Lester said.
Lester told LINK nky this class of worker can potentially be reached through creativity, nimbleness and outside-of-the-box thinking by employers and economic development organizations.
“These organizations could really benefit from engaging these groups by bringing in and then training them and having them participate as really strong, beneficial members of the labor force in their companies and the community at large,” Lester said.
With the presence of marquee companies such as Amazon, DHL, Fidelity, Citi in the region, bridging the upcoming labor and talent gap is at the forefront of the labor discussion within the community. Communitywide conversations on how to find worthwhile solutions is the first step in being able to solve this problem, and create a more prosperous future for all Northern Kentuckians.
