No big company is risk-free from impending labor disruptions, new research suggests

Employers, you’ve got a big storm coming.

Significant disruptions are coming to the labor market. Talent shortages are likely to be exacerbated by population decline, and knowledge gaps left by retiring workers may fail to get filled. And while AI and automation are expected to create millions of jobs, many more will be displaced due to technological advancements, creating a dire need for reskilling.

Many HR leaders are well aware of these challenges, but it can be difficult to quantify the exact impact on one’s specific company. A new ranking from labor market analytics firm Lightcast aims to offer a clearer picture for Fortune 1000 leaders.

What’s the risk? Lightcast assessed Fortune 1000 companies’ vulnerabilities to such labor market risks, and its forecast isn’t so sunny.

These large companies were scored on a five-point scale based on the below factors:

• Whether the influx of prime working-age talent entering a company’s top 10 occupations is expected to match that of the outflow within the next decade.
• How many prime working-age talent is entering their top five markets, versus how many are expected to exit in the next decade.
• The risk their industry faces around ability to fill talent shortages, and whether they can leverage strategies like AI, automation, or globalization to address such shortages.
• Whether they are poised to bridge impending AI skills gaps for their top 10 occupations.

These factors were weighted differently, with occupation future weighing the most and AI risk the least. A score of five was the worst a company could receive, suggesting it has “likely unsurvivable exposure to labor market pressures.”

While no company earned that score, all were at risk from workforce disruptions.

Time for a new playbook. These looming challenges are unprecedented in many ways.

“This has never happened in history, this kind of concoction of elements of different risks [has] never happened before,” Cole Napper, Lightcast’s VP of research, innovation, and talent insights, told HR Brew. “Nobody has a playbook for this, because we’ve never been at a time where there just weren’t enough workers.”

These disruptions are likely to be felt beyond HR. As unfilled jobs cut into operations and financial performance, COOs, CFOs, and even CEOs may be more likely to take more interest in talent strategy conversations, Napper said. The same goes for investor calls, which may discuss HR topics more frequently.

If the pressure wasn’t already on HR leaders to evolve into strategic business partners, it’ll likely amp up now. Napper hopes that Lightcast’s tool will help give CHROs a much-needed edge.

“In the past, CHROs, when they had the platform at the C-suite to talk about these things, they talked about it from a learning and development lens or a hiring lens, the go-to HR playbook,” Napper said. “By us putting it in this kind of packaging for them, they’re going to be able to take this to the C-suite and say, ‘This is how it’s going to impact operations, this is how it’s going to impact us geographically, this is how it’s going to impact our bottom line.’”

Get creative. HR leaders will have to think outside the box, both to recruit and retain workers, and to fill shortages when there aren’t enough human workers to meet the demand. “The rewards will come to the businesses that are proactive and creative,” Napper said.

Take retail, for example. One business challenge that this industry faces is fewer in-person staff members, according to the report. Amazon, which scored a 2.6 on overall risk, has experimented with automation, such as “cashierless” checkouts and smart carts, since 2018.

“I don’t think it’s any coincidence that you see Amazon has done experiments with opening up retail locations that have no workers,” Napper said. “They know that maybe today, they could probably staff it with workers, but by 2030 they may not be able to get somebody to staff that store.”

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