The future small business workforce: will labor shortages exist? The available evidence is less than perfect

Business Economics, Oct, 2004 by Bruce D. Phillips

Jobs may have to be restructured--where possible--to match the available workers, and some compromises will inevitably occur. In the fast-growing business services and health services sectors, it is possible that some jobs will be converted to a part-time basis to avoid paying benefits. In non-retail industries, technology may also allow some jobs to be done outside the workplace.

The role of government is not clear in much of this analysis. On the positive side, older workers willing to go through re-training programs may increase their skills and labor force supply, but the usage of such programs by small business owners has not historically been very favorable. Governments, either federal or state and local, may mandate additional benefits that increase the cost of employing additional workers.

Geographic mismatches between available workers and available job opportunities may still occur. Small firm owners in rural, non-retirement areas may still face labor shortages; and firms that need highly skilled workers may not find them available at a price that is affordable. On the other hand, there may be a glut of highly educated persons in urban areas that want to work part-time (at attractive salaries) in office environments with good benefits. Such positions may not be available either.

An older workforce also brings with it all kinds of challenging liability issues. Many small employers may find that older workers are the only qualified workers available but will be well advised to seek counsel on potential lawsuits that may occur with such hires. It is possible that small firm owners will form alliances in the future to create an environment that minimizes the cost of insurance that will be needed to prepare for such eventualities.