While investors often focus on the short-term labor market indicators, the long-term trend may be more relevant. Demographics, behavioral trends, and emerging (AI) technologies all point to a structural labor shortage in the future. To address this structural shortage, organizations will need to be creative to stay in business.

Not long ago, the global workforce reached a tipping point, as many countries have seen their populations age and the size of their workforces shrink. In addition, employee preferences are changing, with more attention being paid to a better work-life balance.

Technology could help solve some of the labor shortages. Much attention is already being paid to the jobs that could be replaced by technologies such as (generative) AI and robotics. However, it is likely that in the short term, these technologies will actually increase the demand for labor.

History shows that in the early stages of a new technology, automation increases productivity and reduces costs, lowering the price of a product and increasing demand for it. Only over the longer term, when the point is reached at which demand for the product is no longer stimulated, employment declines.

Using this historical analogy, generative AI, on a general level, may actually create more jobs in the early stages, and only cause jobs to disappear in a later stage. Another reason to believe this will happen is that the biggest structural labor shortages are in sectors where generative AI seems to have relatively little impact for now (such as healthcare, education, and construction).

That's not to say that technology can't help alleviate some of the pressure on the labor market. Automation can and is already helping in some types of jobs. In restaurants, for example, app-based ordering systems are (partially) replacing waiters. Hospitals are exploring the use of assistive robots to ease the burden on overworked staff. Generative AI also seems to be becoming an important tool for knowledge workers.