The Evaporating Talent Pool

Welcome back to The Supply Times. This week, we’ll be taking a look at how the labor shortage is affecting business—and what executives are trying to do about it—as well as how experts think the metaverse might shape the workplace in the not-so-distant future.

Industry Highlights: Thinking outside the pool

Are you tired of supply chain uncertainty yet? American CEOs sure are, because the hits just keep on coming. Their current primary fear? Manpower.

According to a recent Conference Board survey, executives cite worker shortages as the greatest threat to their businesses in 2022. The Bureau of Labor Statistics reported that on average, companies couldn’t fill about 40 percent of their positions. It’s an unprecedented issue, considering most companies have had their pick of the litter in a labor pool that’s expanded for decades due to more women entering the workforce and the expansion of globalization.

But Andrew Schwedel of Bain Capital told The Ritz Herald  that expansion has come to an end. Economists at the St. Louis Federal Reserve reported COVID sent as many as 2.4 million Baby Boomers into early retirement, and an article from Business Insider suggests 2 million of the workers “missing” from the current labor force never came to the US because of Trump-era immigration policies.

The most obvious way companies have tried to entice more workers is increasing wages. The Labor Department reported firms spent 4 percent more on wages in Q4—a rise that hasn’t been seen in nearly 20 years. This tactic likely explains why the skyrocketing profit margins we’ve seen of late are starting to come back to earth.

Others are finding ways to make do without. In July, Hilton Hotels announced that daily housekeeping will only be performed upon request, and ExxonMobil head Darren Woods told investors in February the company was being “very thoughtful and cautious” about which positions they’re filling.

Out of concern that workforce woes aren’t just a temporary problem, a growing number of businesses are also investing in automation technology. The Economist reported McEntire Produce, a company in South Carolina, plans to automate 60 percent of its volume by installing new robots to box and stack more than 45,000 tons of sliced lettuce, tomatoes, and onions. Likewise, DCL Logistics has invested in robots that pick items off of shelves and place them in boxes.

It’s clear by these growing trends that companies will have to start getting creative—or risk drowning in the shallow end of the labor pool.

The Future of Work: Working in the Metaverse

In 2017, it was easy to giggle at images of Mark Zuckerberg donning Oculus goggles, but as the newly-branded Meta continues to pour money into VR R&D, experts suggest its impact on the workplace might be far more real than we thought.

We’ve already begun to adapt to the idea that companies can operate virtually and still get stuff done. According to a white paper from social sciences non-profit SOCARXIV, 64 percent of companies say a shift to virtual team work will likely be a permanent one—even if the effects of the pandemic slacken. That same report states 75 percent of virtual teams worldwide say that remote collaboration allowed them to be more effective in their jobs.

And with IDC estimating a 348 percent increase in VR and AR device sales in 2021, the table is certainly set for that type of tech to make the shift from entertainment to business. Here’s some of the ways experts say VR could change the workplace, courtesy of the Wall Street Journal:

• A new take on virtual meetings: Unlike a Zoom call, these VR meetings could involve collaborating on “tangible” items, such as designing toys, furniture, or buildings using 3D tools. It could also be used as a virtual “water cooler,” where employees could hang out at a virtual bowling alley during downtime.

• Job growth opportunities: Just like the internet brought a wave of new professions such as web design and online retailers, so too will the metaverse. Experts aren’t sure what exactly these jobs will look like yet, but they assure the technology will bring job opportunities in virtual shops, entertainment venues, classrooms, and other spaces that will need live support.

• A shift in talent acquisition: If the Zoom movement is any indication, the metaverse will open up a whole new talent pool because companies will no longer be constrained by geography. Training for new hires will likewise evolve. VR and AR tech is already used in military, law enforcement, and healthcare training—think a pilot’s flight simulator—but now, workers could potentially learn how to manipulate machinery or pack boxes without setting foot on the factory floor.

• Increased accountability and oversight: If you’re used to rolling your eyes during meetings, the metaverse might not be a great spot for you. Because VR tech can collect and record body metrics like heart rate, eye movement, and core temperature in a way that no tech has before, those previously overlooked indicators could get reported right to your boss and be used to infer your emotional state. Gartner HR research chief Brian Kropp said managers could have a real-time dashboard that would notify them if a team member is not paying attention. An in-tune manager might make those observations in a Zoom meeting now, but with VR, the tech would make the observation and relay it to the boss.

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About

Supply Chain, Work, and Beyond

• Read: I just read this fascinating profile of Peloton and its former chief executive, John Foley. Foley’s steadfast belief in his product and persistence in the face of adversity is worthy of a Hallmark movie, but several bungled ad campaigns and an Icarus-like declaration that Peloton would shortly become a $1T company resulted in shareholders asking him to take a backseat. Now with Barry McCarthy at the helm, will Peloton be remembered as a comeback story or a cautionary tale?

• Watch: I haven’t eaten a Big Mac in a decade (at least I think so), so watching this fluid graphic on Mickey D’s signature sandwich helps remind me why. The Big Mac Index has measured burger prices since 1986, and it’s a tasty way to keep an eye on inflation. Today in the US, the sammie costs double what it did in 2004. A Big Mac in Switzerland? Seven bucks—enough to make you consider passing on that Shamrock Shake.

• Listen: It’s a throwback from October, but I recently listened to Naval Ravikant on the Tim Ferriss Show. Naval is an endlessly interesting character whose investments in companies like Twitter, Uber, and Postmates have caused people to take notice, and as Tim says at the beginning of the episode, even if you have zero interest in startups or investing, it’s well worth the listen. Plus, the guy has a Twitter follower ratio of 1.6 million–ZERO. Talk about a power move.

• Think: As shipping containers pile up, the US is finding new ways to navigate the supply-chain crisis. Case in point: Rickenbacker International Airport, a nearly forgotten airbase outside of Columbus, Ohio, has been retrofitted to accept freighters and reconfigured passenger jets from Asia and the Middle East to drop goods previously snarled in more traditional ports. Likewise, plans are underway to update the Mississippi River’s infrastructure to accommodate more modern cargo. According to a Forbes article, the waterway historically known as paving the way for modern commerce will be retrofitted as part of the Bipartisan Infrastructure Deal. Both forms of ingenuity are shining examples of how—as a recent Bloomberg article put it—the old architecture of globalization is absorbing shocks and changing shape.

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“Always read stuff that will make you look good if you die in the middle of it.”

— PJ O’Rourke

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