What Employers Can Do To Manage Blue-Collar Labor Shortages

The human resources association SHRM reports that employers continue to face a talent shortage. Small businesses, in particular, are struggling to develop a sufficient pipeline of qualified applicants.

A survey conducted by the National Federation of Independent Businesses (NFIB) revealed that 91% of small businesses had few to no qualified applications for open positions. The NFIB reported that the number of unfilled job openings far surpasses the 48-year historical average of 22%, with 50% of survey respondents saying they couldn’t fill their open roles.

The situation seems to be the worst for employers looking to fill entry-level and hourly blue-collar roles. SHRM noted a whopping 61% of businesses said mostly hourly positions are the hardest to fill.

If organizations can’t find employees to staff their operations, the consequences could range from economically challenging to downright dire.

What can employers do?

NFIB Chief Economist Bill Dunkelberg suggests starting with higher wages. The NFIB’s report found that small business owners said they would raise compensation to attract workers. But wage increases come with a cost to consumers, who will pay more for their goods and services, he noted.

Most of the organizations that SHRM polled provided modest pay hikes, with the most common increases being $1 to $2 per hour, then $2.01 to $3 per hour. Even those higher wages likely won’t be enough, though. The Conference Board, which studies the impact economic and other conditions have on human capital, reported that the United States recently experienced its fastest wage growth in two decades. It slowed from that peak in 2025, but wages continue to grow by nearly 4% year over year. Yet, the labor shortage has continued.

Suffice it to say, employers are being forced to think beyond compensation to recruit and retain talent. Fortunately, there are other ways employers may be able to entice talent and quell the impact of labor shortages on their organizations.

Here are some of the key takeaways from SHRM’s and The Conference Board’s data:

Offer signing bonuses and communicate with prospects about how much they could be earning. SHRM’s data showed that more than one in four unemployed workers said they still weren’t working because the job would pay less than they were earning at their previous job. Be sure to clearly communicate the benefits they’ll get working for your organization. A signing bonus could make all the difference.
Double down on employee referral programs. Get creative with unique program branding to engage workers in helping you find talent. Southwest Airlines launched an employee referral bonus program that gives workers the chance to earn points for successful referrals. The points are redeemable internally with the airline for up to $300 in gift cards, concert tickets and frequent-flyer miles. This could be a good way for other businesses to help build a pool of qualified applicants and fill vacant roles in a relatively short amount of time.
Provide upskilling and reskilling opportunities for current staff. About 60% of SHRM’s survey respondents said one of their biggest challenges is not receiving applications from workers with the necessary skills to fill their roles.
Enlist the help of a staffing agency to alleviate the direct sourcing load.
Streamline the recruitment process with automated technologies that can help you quickly get to the interview, decision-making and offer phases.
Lower unnecessary credential and qualification requirements if possible.
Focus on recruiting talent out of high schools, trade schools, and colleges and universities. Consider internship and apprenticeship programs. Also consider expanding your recruitment efforts to new organizations and job sites, which may help you find qualified applicants for harder-to-fill roles.
Be responsive to applicants. According to SHRM’s data, 42% of unemployed workers said they’re still unemployed because they haven’t received any responses from employers after applying.
Reassure unemployed candidates that their out-of-work status doesn’t have a bearing on the decision to consider them for a job. Three out of five unemployed workers surveyed by SHRM said they felt judged or misunderstood about their work status, so this is an opportunity to alleviate those concerns.

By most accounts, labor shortages will continue — perhaps for years to come. Organizations need talent to survive and achieve their business and strategic goals.

To weather the storm, regularly evaluate which of your recruitment efforts have the highest return on investment, and invest more resources into those efforts so you can quickly fill open requisitions.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem.