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Federal Reserve: A lack of workers is stifling employment growth

The latest report from the Federal Reserve says that many industries are feeling the pain of a tight labor market.
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A tight labor market and a shortage of workers are slowing employment growth across many industries, especially in manufacturing and construction, according to the latest Beige Book from the Federal Reserve.

The Fed said Wednesday that a lack of workers caused businesses located in the reserve bank districts of Atlanta, Minneapolis and St. Louis to turn away business. This coincides with a nationwide shortage of skilled workers as employers are left scrambling to fill vacant job positions. But the demand for labor remains high amongst many industries and many companies reported difficulties in hiring at all skill levels.

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The reserve bank in Minnesota quoted one business source that “labor is the number one concern” across the state as companies are not increasing their payrolls, but adjusting to employee turnover and retirement. The bank cited an ad-hoc poll of ag bankers which said that 90% of them could not find qualified job applicants. One staffing firm based in Minneapolis-St. Paul said that needs are going unfulfilled, resulting in lost business.

The labor pinch is being felt most acutely in construction. “A Minnesota developer said his company could have built 40 to 45 homes this year, but was on track to build 32 due to a lack of available labor,” the report said.

The Trump Administration’s increased immigration enforcement is also having a noticeable effect on hiring in the south. The reserve bank in Atlanta reported that the worker shortage is “severe.”

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“Some employers who rely on immigrant labor—either directly or indirectly—continued to express concerns that efforts to tighten immigration were having a tangible drag on the supply of labor,” according to the report.

The lack of software engineers in the high tech sector in California is causing wage pressures, one of two reserve districts to report more than moderate growth in wages. Wage growth in the rest of the country was modest to stagnant, going against conventional wisdom that a tight labor market drives up wages. Fortunately for the employed, stagnant wage growth is mitigated by nationwide price inflation, the Fed said.

To read the entire report from the Federal Reserve: click here.

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Dana Beth Ardi

Executive Committee

Dana Beth Ardi, PhD, Executive Committee, is a thought leader and expert in the fields of executive search, talent management, organizational design, assessment, leadership and coaching. As an innovator in the human capital movement, Ardi creates enhanced value in companies by matching the most sought after talent with the best opportunities. Ardi coaches boards and investors on the art and science of building high caliber management teams. She provides them with the necessary skills to seek out and attract top-level management, to design the ideal organizational architectures and to deploy people against strategy. Ardi unearths the way a business works and the most effective way for people to work in them.

Ardi is an experienced business executive and senior consultant who leverages business organizational transformation through talent strategies. She uses her knowledge and experience to develop talent strategies to enhance revenue and profit contributions. She has a deep expertise in change management and organizational effectiveness and has designed and built high performance cultures. Ardi has significant experience in mergers, acquisitions, divestitures, IPO’s and turnarounds.

Ardi is an expert on the multi-generational workforce. She understands the four intersecting generations of workers coming together in contemporary companies, each with their own mindsets, leadership and communications styles, values and motivations. Ardi is sought after to assist companies manage and thrive by bringing the generations together. Her book, Fall of the Alphas: How Beta Leaders Win Through Connection, Collaboration and Influence, will be published by St. Martin’s Press. The book reflects Ardi’s deep expertise in understanding organizations and our changing society. It focuses on building a winning culture, how companies must grow and evolve, and how talent influences and shapes communities of work. This is what she has coined “Corporate Anthropology.” It is a playbook on how modern companies must meet challenges – culturally, globally, digitally, across genders and generations.

Ardi is currently the Managing Director and Founder of Corporate Anthropology Advisors, LLC, a consulting company that provides human capital advisory and innovative solutions to companies building value through people. Corporate Anthropology works with organizations, their cultures, the way they grow and develop, and the people who are responsible for forming their communities of work.

Prior to her position at Corporate Anthropology Advisors, Ardi served as a Partner/Managing Director at the private equity firms CCMP Capital and JPMorgan Partners. She was a partner at Flatiron Partners, a venture capital firm working with early state companies where she pioneered the human capital role within an investment portfolio.

Ardi holds a BS from the State University of New York at Buffalo as well as a Masters degree and PhD from Boston College. She started her career as professor at the Graduate Center at Fordham University in New York.