Do you think AI is the biggest threat to the labor market? Experts say, think again, it might be a smaller piece of the problem

Demographic changes may actually pose a greater risk, according to Svenja Gudell, Indeed’s chief economist.

Labor shortages stemming from falling fertility rates, rising baby boomer retirements, and declining immigration loom large over the US job market. The civilian labor force shrank from 171.5 million to 169.7 million between December and August, according to the Bureau of Labor Statistics. By around 2030, it’s projected that there will be more deaths than births in the US, Reuters recently reported.

“That’s a pretty big deal, because this stuff usually doesn’t happen. Our population has continuously grown, and sure, during history there were a bunch of dips along the way, but nothing like what is happening right now,” Gudell told an audience of HR and talent acquisition (TA) leaders during a keynote address at Indeed’s Futureworks conference in Phoenix last week.

And while some sectors may be able to use AI to perform or augment certain tasks associated with unfilled roles, industries less exposed to AI—including education, healthcare, and manufacturing—are expected to be hit hardest by demographic shifts, Indeed data found.

To minimize labor shortage pains, employers must rethink who they hire, and how they attract talent. In her keynote and interview with HR Brew, Gudell shared three practices that HR leaders could adopt to get started.

Look at the work people can actually do. Rather than making hiring decisions based on candidates’ current or previous job titles, Gudell said TA teams should compare their skills with those required of open jobs.

“As you’re hiring someone, don’t try to look for the exact title you’re trying to hire,” Gudell said. “Look for the person that has the skills to do the job. Can they actually perform all the tasks? That’s what you need to look for, not the title.”

This is where understanding transferable skills will be important. Some industries, like childcare, are finding success in hiring talent with transferable skills from outside the profession. Just 19% of workers hired into a childcare role between 2022 and 2024 came directly from another one, while the majority came from at least nine other professions, including education, retail, and food prep and service, according to Indeed.

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