The current labor shortage has benefitted companies that treated their employees well, CEO of EY Carmine Di Sibio said on Yahoo Finance’s All Markets Summit Monday.
“We talk to our clients about this all the time. We’ve actually hired 115,000 people in the last year, but we’ve also lost people,” Di Sibio says about the labor shortage. “The culture of the organization ... is incredibly important … Companies that took care of their people, I think they’re being rewarded for it now.”
Currently, the labor market is as tight as it’s been in years. Firms, desperate for more workers have raised wages and offered more benefits to attract workers. August’s Job Openings and Labor Turnover Survey (JOLTS) showed 10 million people have left their positions, widening the gap between positions and bodies to fill them.
“Labor is incredibly important for people’s supply chain,” Di Sibio said. “We have to do everything possible to make sure companies are allowed to hire, are attracting people, and are able to produce the goods that need to be produced.”
The "Great Resignation," as some have dubbed it, describes the increase in people leaving their jobs since 2020. As the restrictions associated with the coronavirus pandemic began to ease and it came time for employees to return to work, many chose to quit their previous jobs and look elsewhere.
Issues with supply chains run deeper than job shortages, Di Sablo noted. The most pressing issue is that many companies still use outdated supply chain technology which hinders growth. An EY survey conducted before the pandemic found that only 25% of the accounting firm’s clients had a digitized supply chain. EY, considered one of the ‘Big Four’ large accounting firms that make up a substantial part of global accounting services, services clients like Coca-Cola, GM, and AT&T.
“Obviously, people learned during COVID that without a digitalized supply chain, you really can’t operate in a world we’ve been operating in because of the pandemic,” he said. “So, the number one thing is companies have to get their technology up to speed when it comes to their supply chain.”
Entering the holiday season, where many industries will increase demand for workers to deal with greater retail activity, attracting workers may become an even stronger priority.
“We are in a state of disruption, but also a state of crisis when it comes to our supply chains around the world,” he said. “And I think this is gonna be incredibly important as we go into the holiday season around the world.”
Greater emphasis on remote work brought upon by the pandemic compounded by a labor shortage gave more power to potential employees looking for jobs. More flexibility and greater benefits became essential tools for attracting workers.
“They’re a lot of people leaving their jobs, but there are also a lot of people hiring and changing jobs,” Di Sibio said. “It is a time of great transition for many people.”
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.