Transformation of the HR sphere in the context of workforce shortages

This article is dedicated to examining the radical changes in the key functional characteristics of the labor market, identifying their causes, and exploring possible directions for change in the HR sphere aimed at overcoming or minimizing the negative impact of workforce shortages on organizational performance. In the first part of the article, based on the analysis of state statistical data, analytics provided by major job search aggregators, recruiting companies, and experts, the current state of  the Russian labor market is described.

In the second part of the article, the main causes and triggers of the workforce shortage in the labor market are considered from both the demand and supply sides. Among the key causes of the labor shortage, which have a cumulative effect on the labor market, are: the natural decline in population and  the consequences of the “demographic hole”; the results of the structural transformation of the economy; a reduction in the civilian workforce due to mobilization, “relocation”, and emigration; a decrease in the flow of labor migrants; imbalances in the education system, such as the mismatch between the education people receive and the demands of the labor market, as well as changes in people’s labor attitudes and behavior on the job market. The author identifies the main causes of changes in people’s labor behavior as the effects of the “pandemic effect” on the labor market, which led to some workers voluntarily exiting the workforce during quarantine restrictions; the presence of a significant share of NEETs (Not in Education, Employment, or Training) in the labor market; the emergence of new demands from job seekers and employees towards employers.

In the concluding part of the article, it is shown that the response to labor market challenges should be a true “Ideological revolution” in the mindset of HR professionals. The conceptual foundation of a new approach to managing employees is a human-centered approach and a careful attitude towards staff. The author discusses outdated and current HR practices, as well as changes in key functional blocks of personnel management systems and tools for attracting and retaining employees.

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