Employers Must Redesign Hiring and Jobs for a Permanently Tighter Labor Market

Employers that cannot find or keep workers should not assume that a recession, a fresh wave of applicants, or a technological breakthrough will eventually solve the problem for them. Steven Dawson frames the issue as a long-term supply constraint: businesses tend to watch the short-term “weather” of hiring demand, layoffs, and economic cycles, while paying too little attention to the labor market’s underlying climate.

That climate, Dawson argues, is becoming more restrictive. The supply of available workers has been tightening for roughly two decades through three forces: slower growth in the native-born population, declining labor-force participation, and reduced availability of foreign-born workers.

The participation rate, as Dawson uses the term, is the share of adults ages 16 to 65 who are available and willing to work. He says it stood near 68% around 2000 and is now about 61.5%, with the retirement of the baby-boom generation a major contributor.

Immigration had partly offset the other supply pressures after the pandemic, Dawson says. Without growth in the immigrant workforce, he argues, the labor market would not have expanded at all. But rapid changes in immigration policy have removed that offset. Dawson says the country lost a net 700,000 foreign-born workers over the preceding 12 months.

The diagnosis does not mean every worker experiences the labor market as tight. Dawson distinguishes national unemployment figures from the experience of people who still face difficulty finding work, including people of color, women, people with disabilities, younger workers, and older workers. Those groups are not an exception to the employer problem, in his view. They are where employers will need to build more durable recruiting relationships.

Jerry Rubin treats artificial intelligence as an important uncertainty, but not as a reason to disregard the demographic argument. Rubin says forecasts of AI’s employment effects range from mass job loss to net job creation. His own expectation is that its aggregate employment effect may be relatively neutral, even as particular occupations and industries are changed substantially.

For employers, the relevant choice is how the technology is deployed. Rubin says AI can be used to increase productivity while allowing employees to concentrate on more interesting tasks and potentially improving job quality. He also points to an immediate irony: construction-trade organizations have identified shortages of construction workers as a constraint on building the data centers that AI requires.

The practical implication is not that every employer faces the same shortage or should pursue the same solution. It is that an employer cannot build a staffing strategy around the expectation that an idealized applicant pool will eventually appear. The task is to identify where capable people are being excluded, underused, or pushed out—and change the systems that produce those outcomes.

The first practical system is hiring access: how an employer identifies candidates, which requirements its screening systems enforce, and whether its recruitment methods reach people outside conventional applicant pools. Jerry Rubin argues that employers need to reconsider both whom they seek and how they seek them.

Applicant tracking systemsSoftware used to receive, sort, and screen job applications. emerged as a response to the volume of online applications employers began receiving two decades ago. Rubin does not argue that employers should abandon those systems. But he says they too often function as tools for screening people out rather than identifying potential talent. Citing an estimate from the Society for Human Resource Management, he says that more than half of qualified applicants may not make it through online screening algorithms.

The people missed by those systems may include caregivers with interrupted work histories, young workers without a long record of steady employment, and people who are not native English speakers and may have difficulty accessing a platform or tailoring an application to its implicit rules. The system can end up selecting for candidates who know how to navigate the software, Rubin says, rather than for those who can do the work.

An employer can change its screening rules and algorithms. But Rubin’s larger point is that the application funnel cannot be the entire hiring strategy. He uses “untapped talent” to describe people who would like to work, work more, or work in roles that better match their capabilities. He identifies people of color, non-native English speakers, caregivers, young people, older workers, people with disabilities, and formerly incarcerated people among the major pools. The broader underemployed and untapped group, he says, has been estimated to be more than five times the size of the unemployed talent pool.

Access to that talent generally requires an employer to identify the actual barrier rather than treating every absence from the applicant pool as a lack of interest. Reaching English-language learners may require partnerships with organizations that have established relationships in those communities. Recruiting caregivers may require addressing care needs rather than treating them solely as a reason people cannot work. Rubin recalls child care centers established at Boston City Hall and by the Commonwealth of Massachusetts, which made it more feasible for parents employed by those institutions to work.

Recruiting people with disabilities may require adjustments and accommodations. Rubin presents that not as a peripheral compliance question but as a way to reach a substantial pool of potential employees.

Internal mobility belongs in the same review. Rubin says that the rate at which employers fill open positions internally has fallen to about half of what it was two decades ago. Existing employees may be a company’s most immediate source of talent, but they can also be where talent is stuck. Workers who see credible opportunities to advance can become a strong source of referrals through their families and communities; workers who do not regard the organization as a good place to work are unlikely to recommend it.

The decision framework is straightforward, if not easy: identify the point at which candidates are excluded; determine whether the barrier is a screening rule, a recruitment channel, a language or care constraint, or an inaccessible job design; then test a change that addresses that barrier. Hiring volume alone is not the relevant measure if the system repeatedly rejects people the organization could have hired and retained.

Optimax, a precision-lens manufacturer in Rochester, New York, offers the discussion’s clearest example of employer-linked training. Rather than waiting for educational institutions to offer courses, students to enroll, and graduates to search for work, the company hires employees first and builds training around the jobs it needs to fill.

Steven Dawson describes Optimax as having relationships with high schools, two-year institutions, and four-year institutions. Its employees participate as faculty, help shape curricula, and connect students to internships and permanent jobs. Workers enter the training knowing that Optimax has hired them.

That sequence changes the risk for both workers and educators. Workers are not asked to invest time in a credential with only a hoped-for employment outcome. Educational institutions are not expected to anticipate an employer’s needs from a distance. And the employer cannot simply complain that training providers are failing to produce the right candidates while remaining detached from curriculum, faculty, facilities, and hiring.

Jerry Rubin describes a similar model from his work at JVS Boston: the employer hired people first, paid for the training, and paid workers through the training period. In his terms, it reverses a conventional supply-push approach to workforce development. Demand pulls the training into existence because the employer has committed to actual jobs.

The relationship is still a two-way street. Rubin says educational and training institutions should listen more than they talk, learn what is keeping employers up at night, and avoid letting the sale of a service take precedence over understanding the problem. He advises providers to underpromise and overdeliver because employers have alternatives.

But employers also have obligations in the partnership. Optimax’s participation extends beyond hiring graduates: it identifies its needs, helps develop curricula, contributes employees as faculty, and has helped raise money for training facilities. The model works because the employer is not merely a consumer of training. It is part of the institution that creates it.

A tight labor market makes turnover more costly, but Dawson and Rubin resist the idea that employers can buy a universal retention model and install it. The relevant system is job design: the combination of pay, benefits, support, advancement, leadership opportunities, and day-to-day conditions that determines whether people can and want to remain.

Jerry Rubin points to Little Sprouts, a 1,200-employee child care provider in New England, as an example of what an employer-led redesign effort can look like. The company faced severe recruitment and retention challenges during and after COVID. It partnered with JVS Boston and used a Job Quality Benchmarking Index that allowed it to compare itself with other companies in its industry across several dimensions of job quality.

The comparison mattered because it gave the company a view of its own pay, benefits, and practices relative to other employers competing for workers. Rubin says Little Sprouts raised wages, expanded benefits, and built staff-leadership programming. He attributes a roughly 70% reduction in open positions and a 20% improvement in employee retention to the company’s effort.

The case does not establish that every child care provider can reproduce the same results, or that every intervention will be inexpensive. The speakers instead use it to challenge the assumption that poor job quality in a constrained sector is simply fixed. Rubin says a benchmarking process can surface options ranging from low-cost changes to expensive ones. Little Sprouts could, for example, offer employees a substantial discount for their own children to attend its centers—an advantage tied to the nature of its business.

Maureen Conway presses the broader question: industries with poor job quality are often assumed to have no room to operate differently. Rubin’s answer is that wages are important, but employers should also look for ways to make work more workable for the people they need. That may involve benefits, support for care responsibilities, staff leadership, or access to advancement.

Steven Dawson argues that the starting point is not a consultant or a prefabricated framework. It is two-way communication with employees. Employers need to learn what workers see as the obstacles to joining, staying, advancing, and doing their jobs well. They can then test changes that fit their own circumstances before deciding whether to pursue a more formal model or outside support.

Dawson describes the book’s case studies as a map rather than a prescription. Employers must determine where they are: their workforce, operating constraints, turnover patterns, management culture, and the changes employees believe would make a difference. The point is not to copy Little Sprouts, Optimax, or any other featured organization. It is to use a diagnosis of the organization’s own problem to choose an intervention worth testing.

Dawson says employers can be shown evidence that investments in higher pay, training, or employee ownership are associated with improved productivity or profitability, and that the business case is both real and necessary. He also says it is insufficient. A return-on-investment analysis does not by itself cause an organization to change.

Steven Dawson compares the problem to personal health: people can understand that eating less, exercising more, and drinking less beer would make them healthier, yet still resist doing it. Employers may see evidence and respond that they tried something before, that their business is different, or that more immediate challenges take precedence.

The barriers can be external. In long-term care, Dawson notes, state scope-of-practice rules can prevent a trained home-care aide from administering eye drops because the task is reserved for nurses. Where such rules constrain job redesign, the employer has to deal with policy and regulation as well as internal practice.

They can also be embedded in incentive systems. In larger companies, managers may be rewarded for keeping labor costs low on a quarterly basis. If bonuses depend on labor-cost-to-sales ratios, Dawson says, managers have a financial reason to privilege immediate reductions over changes that may take longer to produce results. Such systems are often designed far from frontline operations.

A change strategy that focuses only on executives and frontline employees can miss the people who determine whether new practices work: middle managers. They oversee workflow, supervision, and quality control. A redesign that gives frontline employees more responsibility or autonomy may alter middle managers’ own roles and authority. Dawson says excluding them from defining the problem and designing the solution can create passive resistance or active resistance.

He also identifies a deeper obstacle in class distance. Senior leaders and frontline workers often occupy very different social worlds. Dawson says managers have told the authors they were literally afraid to go onto the shop floor or did not know how to talk with frontline staff. Gender and racial bias matter, he says, but class bias can create its own gulf of understanding.

That is why the operational sequence needs one further step beyond diagnosis and experimentation: identify the operating rules, incentives, and managerial interests that would prevent a promising change from lasting. A workforce intermediary cannot solve that problem merely by delivering an evidence packet.

Jerry Rubin offers peer comparison as a more immediate source of pressure. Little Sprouts could see how its practices compared with named competitors. Rubin says that can carry more force than an abstract ROI study because it presents an employer with a concrete question about its position in the labor market.

The provider’s role remains limited. JVS could supply a tool and be a partner, Rubin says, but it could not create the company leadership’s motivation to act. The decision to become employee-focused has to come from the employer itself.

The argument applies to private businesses, nonprofits, and public agencies. Jerry Rubin stresses that “not-for-profit” is not synonymous with small; Massachusetts’s largest private employer, he notes, is a nonprofit hospital system. But the discussion also addresses genuinely small employers with limited budgets and limited capacity.

Steven Dawson says that 40% of U.S. employees work for organizations with 50 workers or fewer, representing roughly 55 million workers. The challenge of finding and retaining talent is therefore not confined to large corporations with substantial HR functions.

Small nonprofits may not be able to match the wages of larger employers. Rubin treats that as a real constraint. But he argues that some important actions cost little beyond time: asking employees about their experience, listening to the answers, comparing the organization’s practices with relevant peers, and acting on issues within its control.

JVS used the job-quality assessment tool on itself before offering it to other organizations. Its staff compared the organization with other nonprofits, and it made changes based on what it learned. The example is not offered as a substitute for compensation. It is a reminder that an employer can begin by understanding its own gaps rather than waiting until it can fund a comprehensive initiative.

For smaller organizations, the practical question is not whether they can reproduce every practice of a larger employer. It is which barrier they can address now, whether that is an exclusionary hiring rule, a lack of internal mobility, an unmanaged care constraint, weak communication, or a management practice that drives employees away.