Resources

These last few years have seen massive upheaval in all corners of our lives, not least of all the realm of staffing (which, because this is the CoolWorks Employer Newsletter, is the topic we tend to focus on). We’ve seen more than a few new catchphrases coined to describe the shifting landscapes: The Great Resignation, The Great Reallocation, Work-from-Home, Return-to-Office, quiet quitting, etc.). In light of recent research and data released by the Census Bureau’s Business Formation Statistics, we’re seeing the resurgence of another economic concept: Dynamism.

Dynamism is essentially a measurement of churn, or the process of businesses starting, growing, contracting, and closing, and the creation and destruction of jobs that accompany that metamorphosis. Prior to the pandemic, dynamism had been steadily dropping for several decades. New businesses and jobs were being created every year, but the overall rate of change was relatively low and declining. 

The pandemic sharply reversed that trend, as employment dynamism (or the rate at which employees change jobs) skyrocketed. The reasons for this continue to become clearer as research and analyses lift the fog of the past, and recently, a new piece to that puzzle has been revealed: a surge in new business formation. In 2021, 5.4 million new business applications were filed in the United States, the most of any year on record and a 53% increase over pre-pandemic 2019. 

So we now have another element to the labor shortage conundrum: lots of workers have joined companies that didn’t exist prior to the pandemic, and some of them have started their own companies. Because these companies were created in the wake of the pandemic, many of them were formed in response to what many job seekers frequently cite as their top reasons for changing jobs: greater flexibility in scheduling and location, competitive compensation that takes the cost of living into account, clear communication and boundaries surrounding job responsibility and expectations, and opportunities for learning and growth within the organization.

In general, dynamism is considered a healthy component of a successful economy: new business and job creation drive innovation and competition, which creates more opportunities for employees across the labor market, while also minimizing monopolies, which creates fair pricing and more options for consumers. It does place pressure on all businesses – long-standing and newly-created – to adapt to evolving consumer and employee preferences in order to remain competitive and viable as the landscape changes. 

As we proceed into an era of increased dynamism, all companies have to continue to ask how they can remain competitive, and how they can respond to the ever-changing preferences of both their customers and their employees. How might business models be revised to create more scheduling and location flexibility for their staff, while providing unique, valuable, and relevant experiences for their customers? How could seasonal operations approach succession planning and retention strategies in a way that creates opportunities for growth and advancement for their staff? How can organizations make every team member feel more included and critical to the long-term success of the company? How, and whether, organizations think about these questions will play a major role in determining their future survival.