Category: Beyond Work

Beyond Work is our line of resources for people and community leaders looking for something new and innovative outside, be it a new job, career change, or personal development outside of work.

  • How to Get Millions Back in the Workforce

    How to Get Millions Back in the Workforce

    During the pandemic, it was estimated that between two and three million women left the workforce. While there are signs that women are returning towards pre-pandemic levels, there are still a variety of sectors, especially care workers, that have not recovered and signs don’t point to an optimistic outcome. 

    Why? 

    Women are largely those that leave the workforce to provide care for children and or the elderly. Providing care makes it difficult for women to work, especially in more traditional sectors where workers must be present and work hours that don’t align with school and care options. This is especially true for single mothers. 

    What should be done? There are many thoughtful people across the country that are working on this issue.  As you think about how your company and or community can support labor participation among women by tackling caregiving needs, here are some things to think about: 

    1. What is it that workers actually need and want when it comes to childcare?  In order to address caregiving, we must address quality and quantity and respond to what workers want and need when it comes to childcare.  For example, the West Alabama area has realized that blue collar workers want their childcare close to where they live, not close to where they work.  Whereas one solution would be for large manufacturing companies to build onsite childcare facilities, this would neglect to understand what the population they employ needs and prefers.  So they have launched an initiative to increase in-home daycares in their community.  You can learn more about their program in this Family or Group Childcare Homes Workbook.

    In addition, employers across the state are looking into options like Tootris to provide a customized approach to childcare instead of a one size fits all approach (and most likely saving millions by outsourcing the access to childcare).  In this model, Tootris helps families find childcare that meets their needs through an online network and then the employer provides a financial subsidy to the employee through Tootris to help pay for that childcare. 

    Finally, we also need to consider what people need when it comes to carrying not only for children, but also for aging and/or disabled loved ones.  Often, this is largely left out of the discussion when seeking to address the labor participation issue. 

    1. It is an affordability issue.  Systems like Tootris provide a means for employers to help offset the cost of childcare.  And to be sure, quality child care is expensive.  My youngest child just transitioned from a high-quality childcare program to a public school Pre-K and what we paid for that childcare now almost pays the mortgage on our home each month.  

    Some states are getting involved to try to figure out how public-private partnerships can make an impact on labor participation through subsidizing the cost of childcare. The state of Indiana proposed splitting the cost of childcare in thirds-  employers paying one third, employees paying one third and the state paying one third.  Although this legislation has not passed in Indiana, the research behind it showed that the state would more than offset the cost through increased payroll taxes being collected by those that were able to return or enter the workforce because their childcare needs were now met. 

    1. We need to examine what it means to work and when and how we structure education with working parents in mind.  I mentioned that my youngest child transitioned into a public school Pre-K.  While this is saving us over $800 a month, he now has to be picked up by 2:15 pm each day.  Given he is in Pre-K, he is too young to go to the school’s extended day program. My husband and I are fortunate to have flexibility when it comes to working hours and we have retired grandparents available around the corner from the school we can call on when needed. My issues, to be sure, come from a place of unique privilege.  But when we think about childcare, we have to stop and realize that school days and work days don’t often align when it comes to hours and schedules.  My school aged children are out of school now for fall break- five days- and will be out of school a total of seven days before December (not counting Christmas Break).  People working in traditional fields do not have access to seven days off in less than a two month period. 

    I don’t have the solutions for this issue, but we need to be talking about it.  Employers need to consider what it actually means to get quality work done, and oftentimes we are too rigid on when and how this takes place.  Communities and school systems need to work with employers to consider the demands placed on working parents when every time you turn around, kids are out of school and the hours in which they go to school aren’t consistent with a traditional work day.  Our workplaces would be better off and our schools would too because families would be better supported. 

    What are you seeing that is helping to address labor participation due to caregiving issues?

  • The Evaporation of Male Labor Force Participation

    The Evaporation of Male Labor Force Participation

    Here at The Point Blog, we have been writing a series. Last month, I gave an overview of What’s Affecting the Labor Force Participation Rate? Lorrie followed that up with When Working Costs too Much concerning the benefits cliff and Taylor took a closer look at Baby Boomers Retiring-How do we fill their shoes? This week, I am going to take a deeper dive into some of the reasons that males (age 25-54) are evaporating from Labor Force Participation and some possible solutions for our future workforce.

    The Labor Force Participation Rate is defined as those who are actively looking for or seeking work. According to Male Labor Force Participation: Patterns and Trends there are multiple reasons that males of prime age aren’t seeking employment. Among those reasons are a shift in U.S. industry structure, a decline in male educational attainment, delayed family formation, the rise of substance abuse, and heavy use of video games.

    How can we address the deficit and encourage male workers to get back into the workforce? Read what the Demographic Drought research has to say about solutions to our workforce future.

    1. Recruit beyond traditional demographics-HR directors will need to look into recruiting people that normally would have been overlooked as candidates to fill vacant positions.
    2. Reskilling, upskilling, and alignment-Companies can’t assume they’ll be able to find the right talent. Instead, they must build that talent base for themselves. By working with higher ed to build programs that meet the needs of the job market, offering upskilling or reskilling opportunities to current employees, and providing on-the-job training for new recruits, businesses can close or at least narrow their talent gaps.
    3. Retain students and employees-Colleges and universities must focus on retention, not just enrollment. Similarly, businesses must focus on retaining current employees, not just hiring. 

    In conclusion, we need to value people more. At Horizon Point, we offer a two-day intensive workshop uniquely designed to help business and community leaders examine workplaces of the past and present and explore high-impact solutions for creating workplaces and a workforce for the future. Learn more about our Illuminate content, here.

  • Baby Boomers are Retiring – How do we fill their shoes?

    Baby Boomers are Retiring – How do we fill their shoes?

    This month, we’ve been talking about What’s Impacting the Labor Force Participation Rate.  Last week, Lorrie shared how the Benefits Cliff impacted the participation in When Working Costs Too Much. Another significant factor in this equation is Baby Boomers exiting the workforce. Let’s dive a little deeper.

    Baby Boomers account for 1 in 4 American workers. As they are exiting in droves, their absence will lead to an even wider workforce gap as companies will need to fill positions made available after the Boomers retire. Check out this article from The Washington Post to learn more: The boomers are retiring. See why that’s bad news for workers.

    Who will fill the gap? Here are 3 possible solutions:

    1. Mentorship –  Baby Boomers have a wealth of knowledge to pass along. One promising option to help with the transition is the creation of a baby boomer knowledge transfer and replacement program that focuses on senior employees transferring their knowledge before they retire.
    2. Remote workers – If given the opportunity, Baby Boomers as well as other generations who are willing to work remotely, possibly part-time, may also be a solution in some industries.
    3. Immigrant workers – Foreign workers are already filling the gap in STEM fields. According to 2018 data from the Bureau of Labor Statistics, the U.S. workforce increased to 28.2 million foreign-born workers. There are several other fields where immigrant workers can help fill the gap.

    Stay tuned for more solutions to the Labor Participation Rate issue!

  • When Working Costs too Much

    When Working Costs too Much

    Last week, Emily gave an overview of What’s Impacting the Labor Force Participation Rate. This week I’m going to take a deeper dive into one of the areas she touched on; the benefits cliff.

    When analyzing the labor participation rate, you have to look at the poverty rate and public assistance participation rate. 

    The current poverty rate in Alabama is 14.9%, which’s places us #7 in the nation for highest poverty rate. Given the high poverty rate, it’s important to look at the living wage and average wage rates paid. A living wage varies based on circumstances. For example, a living wage for one person with no partner and no children is going to be lower than it is for someone with a partner and children. Is your organization paying a living wage? 

    Alabama ranks among the worst when it comes to the percentage of residents receiving public assistance. Approximately 15% of Alabama residents receive SNAP benefits and 20% receive Medicaid or CHIP. 

    So what does this mean for the labor participation rate?

    To enter the workforce and to advance in the workforce, many employees have to consider the impact wages and pay raises will have on their overall finances, and if there will be a negative impact. The chart below is an example of what the benefits cliff really looks like. (Data based on a Tennessee workforce study 2022)

    The termination of each benefit creates a “cliff” for the employee at which an increase in wages creates a decrease in total income due to the loss of assistance dollars. Therefore, it may be more financially beneficial for the employee to terminate employment and find a lower paying job in order to keep their state benefits or to exit the workforce altogether. 

    In recent years, I’ve had multiple clients come to me for advice because they had employees who asked not to receive their pay raise because doing so would mean they lose their state benefits, and losing those benefits would mean that they actually have less income coming in. Some states are moving, or considering moving, to a gradual reduction in benefits versus an immediate loss. 

    What can employers do to positively impact the labor participation rate for those who are impacted by poverty and the benefits cliff?

    1. Analyze your wages, looking not only at market data, but also the living wage for your region. Then keep your compensation plan up to date, adjusting regularly for cost of living. 
    2. Consider what resources you can provide that may not be wages, but may mean more money in the employee’s pocket. This could include things such as childcare assistance, flexible spending or dependent care plans, or even establishing a food pantry.
    3. Understand how state assistance benefits work, what the income cutoff for each benefit is, and how this may impact employees. 
    4. Develop training programs to support employees increasing their skills to advance to higher level positions that would increase their income beyond the need for assistance. 

    What steps has your organization taken to address the benefits cliff?

  • What’s Affecting the Labor Force Participation Rate?

    What’s Affecting the Labor Force Participation Rate?

    What is the Labor Participation Rate and how does it impact employers and the economic outlook? 

    According to OECD.org, “The labor force participation rate is calculated as the labor force divided by the total working-age population. The working age population refers to people aged 15 to 64. This indicator is broken down by age group and it is measured as a percentage of each age group.” 

    There are many factors impacting the Labor Market in 2023 including the benefits’ cliff, boomers exiting the workforce, the rate of working-aged males declining, women leaving the workforce by the millions and the decline in fertility rates.

    One reason some workers are deciding not to work or to stay in low paying jobs is the Benefits Cliff. The benefits’ cliff occurs when an increase in someone’s pay triggers a greater loss in public assistance such as food, healthcare, childcare and housing. This happens because public assistance does not gradually decrease as income rises. Instead, it “drops off a cliff” at a certain income. This leaves prime candidates stuck between a rock and a hard place.  Some may be quick to fault those not participating because of this or not participating fully (working less than full time in order to keep their benefits), but these individuals are making an economic decision and a wise one at that.  

    Next, we have the mass exodus of the baby boomers. Boomers made an economic decision to remain in the labor force during the great recession, causing them to begin exiting the labor force much later than historically anticipated. Now, boomers are retiring at a staggering rate. While we are still living in a work world created by the boomers, they are no longer the primary contributors. According to PEW Research Center, the number of baby boomers exciting the labor force has grown by about two million since 2011. Then, from 2019 to 2020 the numbers jumped by 3.2 million. 

    Why does this matter? Well, this group is often vacating higher level positions in their companies and the transfer of knowledge can be a challenge. Not to mention boomers aren’t being replaced at the same rate of exit and some who are retiring are passing down tremendous amounts of wealth to their children. This creates children that more than likely won’t be filling their parents’ shoes. 

    According to The Demographic Drought by Emsi male millennials are the next group that are in sharp decline in the labor force. Males have been AWOL since 1980. With boomers having such wealth, it left men not taking on the responsibility of getting a job until after 20 or moving out of their parents’ home either. Another economic decision. Add in the opioid epidemic, and males of prime age are being taken away from the market. Also, among the Millennials, there has been a shift from full-time work to part-time work. The reason for this says Lightcast in The Demography Drought is video games, yes video games! 

    Men aren’t the only ones we are looking at here. According to the latest Women in the Workplace Study by Lean In and McKenzie & Company, women are demanding more from work and are leaving their companies in order to get it. Some are referring to it as the “Great Breakup”. In addition, childcare prices are soaring and quality care is a challenge to find.  That leads to women taking on the majority of the child care responsibilities. Again, this is another group is making an economic decision.  Paying for quality childcare is often more expensive than bringing home a paycheck to cover it, so women are opting out. One report found that from 2020 to 2021 mothers took on the majority of child care responsibilities, spending an average of 7.1 hours per day caring for their children.

    Finally, BLS.gov shares that population is the single most important factor in determining the size and composition of the labor force. So, what does that mean for the downward trend in US Fertility Rates? There is a growing number of childless US adults who don’t expect to ever have children. Again, are they making an economic decision not to have children? What impact does this have on the future of the Labor Force Participation Rate? Evidence would point to the conclusion that it will continue to decline under these circumstances.

    Many people are making decisions based on a variety of factors, including the economics of working, to opt out of the labor force or not opt for full time participation.  What does this mean to our macroeconomic situation?  And what does this mean for employers?  In order for people to opt to enter and remain, we will all have to think about how to weigh costs and benefits of such decisions.  

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