The Next Labor Shortage Will Arrive in an Economy With Too Many Applicants

A labor market can have too few workers and too many job seekers at the same time.

That sounds contradictory only when employment is treated as a single national queue. In practice, work is divided by occupation, experience, geography, schedule, pay, licensing, and the conditions people can realistically accept. A hospital can struggle for months to hire qualified clinicians while a data professional sends hundreds of applications. Both experiences can be true, and both can intensify together.

The distinction matters because the United States is entering a demographic contraction that will not distribute its effects evenly. At Indeed FutureWorks 2026, Indeed CEO Hisayuki “Deko” Idekoba and Chief Economist Dr. Svenja Gudell described a projected deficit of six million workers by 2032 as Baby Boomers retire. Yet speakers also pointed to elevated unemployment and longer searches in technology, data, public administration, and professional services.

The next workforce crisis is therefore unlikely to look like a universal lack of applicants. It will look like persistent vacancies in some places, crowded candidate pools in others, and an expensive failure to connect the two.

Demographics set the constraint

Retirement removes more than a headcount. Experienced workers take occupational knowledge, relationships, judgment, and, in some fields, credentials that take years to replace.

Employers can temporarily soften the effect through higher participation, immigration, productivity gains, and technology. None of those changes makes the age profile disappear. A business that treats the current hiring slowdown as evidence of a permanently abundant labor market may underinvest in succession and capability building just as experienced talent begins leaving at scale.

The six-million figure is compelling because it is similar in magnitude to the number of Americans who may be unemployed at a given time. That comparison does not mean each unemployed person can simply fill an open job. It shows why aggregate supply can conceal a matching problem.

A surplus of applicants is not a surplus of fit

Healthcare makes the mismatch visible. Demand is persistent, many roles require formal training or licenses, and the work must be performed in particular locations and at particular times. A larger pool of unemployed software workers does little to solve a nursing shortage next quarter.

The same logic applies within occupations. An employer may receive hundreds of applications and still struggle to find someone with the required context, availability, compensation expectations, or willingness to relocate. Meanwhile, screening systems can reject candidates whose adjacent experience could transfer because their previous title does not match the expected pattern.

James Whitemore, Indeed's chief marketing officer, described this simultaneous shortage and surplus during the FutureWorks session “What’s Shaping Hiring Today”. His framing is useful because it moves the problem away from a simplistic question about whether the market favors employers or candidates. The answer depends on where someone stands.

The bridge is built before the vacancy

When skills are scarce, recruiting harder is an incomplete response. Employers also need to create routes into the work.

That may mean distinguishing trainable requirements from genuine first-day requirements, financing credentials, building apprenticeships, redesigning schedules, or considering candidates from adjacent occupations. It can also mean retaining the experienced employees already carrying hard-to-replace knowledge through flexibility, phased retirement, or roles that let them teach others.

For workers in crowded fields, the implication is not that any shortage occupation will be an easy pivot. It is that occupational boundaries deserve closer examination. A person may have transferable capabilities in project coordination, analysis, client communication, operations, or systems thinking even when the destination role uses different language.

So what should workforce leaders do now?

Workforce planning needs two maps. The first shows where demand is growing, which experienced employees are likely to leave, and which capabilities would be hardest to replace. The second shows adjacent talent pools, the gaps preventing movement, and the time and cost required to close them.

That approach produces different decisions from simply counting applications. A crowded inbox no longer proves that a role is easy to fill. A low unemployment rate no longer proves that every employer faces the same scarcity. The useful unit is the pathway between a particular person and a particular body of work.

Employers should start by identifying roles where retirement, licensing, or location creates structural exposure. They can then decide which constraints are truly fixed and which were inherited from an older job design. Candidates need equally concrete information about training, schedules, progression, and the skills that genuinely travel into the role.

The labor market ahead may contain both fierce competition for some jobs and severe shortages in others. Organizations that understand only one side will misread their applicant volume, their succession risk, or both. The advantage will belong to those that can see the mismatch early and build credible bridges before an empty seat becomes a crisis.