As we enter 2022, we find ourselves faced with many of the same challenges we tackled in 2021. The global supply chain continues to be impacted by Coronavirus outbreaks leaving manufacturers in a very difficult position. Labor markets around the world are facing unprecedented workforce and supply chain issues.

In a recent “60 Minutes” episode, The Big Quit, an interesting statistic was shared. Before the pandemic, one job in 67 was considered a remote work-from-home position; today that number is nearly one in seven jobs. More than 20M people quit their jobs over the past year, which is a product of many influences, including lack of childcare, quality of life issues and a migration to lower cost areas of the country.

More and more people are demanding remote work because they feel more comfortable and protected at home. Employees now have the upper hand in the employer/employee relationship. Traditional blue-collar positions are becoming very difficult to fill which is exacerbating the already strained manufacturing supply chain.

The completion and delivery of new houses, tractors, autos, computer equipment, etc. relies heavily on having a fully functioning workforce. Orders are not the issue, delivery is. And with that manufacturers are having to increase pay to attract employees which in turn increases production costs and the sticker price for the buyer.

Inflation is real and will be an issue throughout 2022.

In addition to increased prices, we have heard that the Federal Reserve is going to raise rates multiple times throughout 2022, resulting in higher costs for the acquisition of new equipment. I do not want to come off as an alarmist, but the reality is we are being faced with a host of new challenges in a very short period of time.

Businesses that can adapt quickly and think outside of the typical “this is the way we have always done things” box will succeed; those that stay the old course will be challenged to keep up.

Business models must change in 2022 because this year is just the tip of the iceberg. Ongoing changes and challenges will be with us for the next five years due to the evolving labor markets, government regulations and fiscal policies.

Buckle up. The ride is just beginning.