With fewer Gen Zers entering the workforce than needed to replace retiring boomers, the U.S. will soon bear witness to a more shallow labor market than ever before. Further complicating the issue are the skills and experience Baby Boomers are taking with them when they leave the workforce. Even if there were enough younger candidates to replace retiring boomers, losing decades of expertise threatens productivity, innovation, and the ability to maintain institutional knowledge.

While many leaders are hoping that time and changing market conditions will bring relief to hiring woes, the outlook is less than ideal. Despite ongoing inflation and economic uncertainty—two factors that historically turn labor markets in employers’ favor—77% of businesses struggled to fill open positions last year. The general sentiment is that it’s only a matter of time before the market turns. But in reality, the fact that it hasn’t already suggests our challenge lies deeper than expected.

The volatile labor market is only one part of the equation. Solving the talent supply chain crisis is a much more complicated math problem involving multiple variables an organization must consider, including declining birth rates, aging demographics and retiring Baby Boomers.

America’s population is amidst its steepest descent in modern history. Not only is the birth rate dropping, with the U.S. population growing at the slowest rate since the nation’s founding, but American citizenship is also expected to enter a decline by 2100 (after peaking in 2080). While the general public doesn’t typically see a declining population as a cause for alarm, the situation is more dire than many realize. Dropping populations may mean fewer mouths to feed, but they also mean fewer people to support our ways of life.

As the U.S. population shrinks, the existing talent crisis and widening skills gap will only become more of a challenge. The gap between labor and need is already large, and it’s increasing rapidly. It’s estimated that by 2030, more than 85 million jobs could go unfilled because there aren’t enough skilled people to take them.  

Now is the time for leaders to start talking about our population math problem and how we can address it. Fortunately, hope exists due to the emergence of artificial intelligence and AI-enabled technologies. The integrated adoption of these technologies within key organizational workflows and processes can offer simplified solutions to complex challenges driven by a declining population, providing crucial lines of support for businesses and employees as they navigate the tumultuous waters of a new workforce structure. With a series of additional labor market shocks likely on the horizon, it’s critical for organizations to remain prepared for volatility ahead.

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