The labor shortage is a hiring strategy problem

Published August 17, 2026 9:00am ET | Updated August 17, 2026 9:59am ET



It’s time to call an audible. America is looking for tomorrow’s workers in yesterday’s places. Employers continue searching for people who arrive with the right degree, the right experience, the right résumé, and every skill required to contribute on the first day. Then we act surprised when critical jobs remain unfilled. That is not simply a worker shortage. It is a strategy problem.

The latest JOLTS report shows 7.4 million open jobs. Nearly 1.2 million are in manufacturing, transportation, warehousing, utilities, and construction, the industries that make products, move goods, build communities, and expand America’s productive capacity. Another 1.35 million are in healthcare and social assistance.

The scale is enormous. So is America’s capacity to respond. We live and work in the most innovative and productive economy in the world. American businesses solve problems. When markets change, they adapt. When technologies emerge, they invest. When skills are scarce, they train.

The foundation for faster growth is already being built. Nonfarm business productivity increased 2.2% over the past year. Manufacturing output rose at a 4.6% annual rate in the second quarter. Core capital-goods orders increased in June.

But the handoff remains incomplete. Real hourly compensation declined 0.1% over the past year, and July retail sales fell 0.6%. Without broader hiring and stronger real paychecks, customers pull back, and businesses lose a reason to invest.

This is how the economy works. Investment expands productive capacity. Productivity gives businesses room to expand, hire, and raise wages. Stronger paychecks create demand and support the next round of investment. Closing the workforce gap completes that cycle and further accelerates growth.

Workforce development is not merely an education program or human resources initiative. It is an economic growth strategy, a competitiveness strategy, and a household income strategy.

America has solved workforce constraints before. During World War II, Springfield Armory redesigned jobs and accelerated training. At its wartime peak, 5,210 women, many without industrial experience, represented 45% of its workforce and helped produce roughly 4.5 million M1 rifles and other equipment. Leaders expanded their definition of talent and redesigned the path to productive work.

That thinking is delivering results today. Constellium, an aluminum manufacturer in Muscle Shoals, Alabama, saw a wave of retirements coming and acted. Through the Federation for Advanced Manufacturing Education, students attend community college two days a week and work for a sponsoring employer three days a week. Constellium sponsors 35 advanced manufacturing technician students and has hired 35 graduates full-time. The company reports that 90% remain after graduation.

Project SEARCH turns the employer into a classroom. Young adults with intellectual and developmental disabilities receive instruction and complete workplace internships. The program reports that 72% of graduates achieve employment across more than 800 active sites.

Workers earn while they learn. Employers gain talent shaped around real work. Communities gain paychecks, taxpayers, and stronger local demand.

Neither program waited for the labor market to solve the problem. They built the pathway. An unfilled position can leave equipment idle, delay orders, exhaust employees, and prevent expansion. A well-designed pathway reduces vacancy costs, preserves knowledge, and trains workers around real operating needs.

ADP’s July data reinforce the point. Median pay grew 7% for workers who changed jobs, compared with 4.4% for those who stayed. The message is not that everyone should quit. Better matches can create greater value and command higher pay.

There is an old admonition: “Physician, heal thyself.” The workforce version is straightforward: Employer, help build the workforce you need.

Every business can begin with one difficult-to-fill job. Identify the skills required. Remove a degree or experience requirement that does not predict performance. Create one paid learning position. Bring in one school, workforce organization, disability-employment program, or industry association. Measure hiring, retention, advancement, productivity, and pay.

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America helped win two world wars. We put human beings on the moon, eliminated endemic polio at home, and pioneered modern heart transplantation. We know how to marshal resources, align institutions, and galvanize action around a clear strategy. Now we must do it again.

Closing the gap requires an employer-led workforce mobilization built around skills-first hiring, paid work-based learning, employer-designed training, pathways for overlooked workers, shared apprenticeships for small businesses, and public funding tied to job placement, higher earnings, and sustained employment. The workers are here. The jobs are here. Build the pathways that connect them. That is the audible America must call to broaden opportunity and further accelerate the economic growth already underway.

Dan Varroney is an economic growth strategist, founder and CEO of Potomac Core, and author of Rethinking Economic Growth.