Nowell Agency, Inc. > Insurance News > How the 2022 Labor Crisis Affects Businesses

How the 2022 Labor Crisis Affects Businesses

Chances are, if you’ve walked into a store or place of business recently, you’ve noticed a marked lack of employees. You may have seen fewer items on the shelves, had to wait long periods for service, or observed unexpected closures of your favorite shops. Why is all this happening? Businesses across the United States are struggling to find enough employees to run their businesses successfully. Covid-19 has affected the world in a variety of ways and one of the most impactful effects on businesses is the current labor shortage. This has created hardships for everyone involved, from business owners and the remaining employees, to customers and anyone else who deals with the business.

For business owners, this 2022 employee shortage is likely causing serious issues in your ability to function properly. You may be experiencing problems with production, deliveries, obtaining the supplies you need, serving your customers properly, and all this results in a tight bottom line. Feeling stressed and concerned about the future of your business and others in the United States? We get it. Nowell Agency is here to discuss the 2022 labor shortage and share tips on what insurance products best protect your business.

Reasons for the 2022 Labor Shortage

When the pandemic began and the world shut down, many people lost their jobs. During that time, people across the globe began to reassess their employment strategies and future plans. Many employees decided not to return to the workforce, others chose to continue working from home or cut back on hours, and still others simply haven’t decided if they’re going to return to work yet. Although the world is beginning to reopen, the United States had roughly 11 million positions that were unfilled at the end of 2021. The resulting strain and stress this has placed on remaining employees has caused many of them to quit their jobs. The impact of Covid and this “Great Resignation” is why we’re seeing the current workforce shortage.

liability risks due to labor shortage

Why are people not returning to the workforce in 2022?

  • Covid-19 risks: Many employees feared a higher exposure to Covid-19 in workplaces, especially those that have a higher number of people moving in and out of the workspace or where employees work in a confined space.
  • Early retirement: Many elderly employees felt more exposed to the risks of Covid-19 in the workplace. As a result, many who were close to retirement age decided to retire early.
  • Caregiving responsibilities: The pandemic caused many people to become primary caregivers for children or elderly relatives. This has largely fallen to females, which has caused over 3 million women to leave the labor pool.
  • New business ventures: Many people decided to take advantage of the pandemic to start their own business. Applications for new businesses in 2020 increased about 30%!
  • Stress and lack of support at work: Those who worked during all or parts of the pandemic experienced increased stress and decreased support from employers (in the form of poor benefits, lack of flexibility in the work schedule or the ability to work remotely, and excessive hours or increased responsibility without adequate compensation). Thus, many workforce participants experienced burnout and are now deciding to leave their positions.

How to Protect Your Business During the Employee Shortage

With the future of the economic market in the United States in a precarious position, it would be prudent to protect your business. There are several insurance products that are designed to do just that. Business Interruption Insurance protects you financially during times of low or non-production. With the high levels of burnout existing employees are often currently experiencing, avoid employment-related claims with the best Employment Practices Liability. Offering a great Employee Benefits package enables you to attract more candidates. Protect your business and contact Nowell Agency today! We’ll work with you to tailor a comprehensive insurance policy that covers your business for the unexpected during these trying times. Call us for a free quote or learn more about our business insurance products with a click!

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