The war for talent, labour shortages and demographic changes: catalysts for workplace diversity and inclusion?

Enrique M Stile
Marval, O’Farrell & Mairal, Buenos Aires
ems@marval.com

Javiera Martínez Correa
Marval, O’Farrell & Mairal, Buenos Aires
jamc@marval.com

Today’s increasingly changing business environment creates a confronting challenge for the future of the labour market. Companies in Argentina and worldwide are increasingly focusing on talent retention strategies to safeguard their most valuable asset: human resources. However, this battle is complicated by ongoing labour shortages in various sectors, where demand for skilled employees exceeds supply.

In this context, the war for talent, labour shortages and demographic shifts stand out as key factors driving a renewed focus on workplace diversity and inclusion which translates into companies’ strategies and policies, as well as new regulations and case law.

Labour shortages and the emerging trends in the war for talent

In order to maintain competitiveness, businesses in Argentina are forced to adopt new strategies in order to meet the demands of a more diverse and evolving workforce. One of the most significant trends is the widespread shift towards flexible work arrangements. The Covid-19 pandemic accelerated the adoption of remote and hybrid working models; flexible work is now seen as a critical factor in attracting and retaining top talent. These arrangements not only accommodate employees’ diverse needs, such as childcare, caregiving responsibilities or personal health concerns, but also support the growing desire for work–life balance. Companies tend to offer more flexible schedules and result-driven environments so as to attract highly skilled employees who value autonomy and flexibility in their jobs.

Another emerging trend is the growing importance of mental health and wellbeing programmes in the workplace. The demands of modern work, coupled with the pressures of social media and global events, have made mental health a top priority for employees. Organisations that acknowledge the importance of mental health and create a supportive work environment are better positioned to retain talent.

Furthermore, as part of the war for talent, companies are increasingly focused on offering competitive compensation and benefits packages that cater to the changing expectations of employees. This includes not only higher salaries but also personalised benefits such as wellness programmes, education reimbursement and childcare support. Organisations are recognising that talent is not just attracted to financial compensation, but also to holistic support that enhances their quality of life.

Finally, the role of technology in talent acquisition cannot be overstated. Artificial intelligence is increasingly being used to streamline recruitment processes, identify high-potential candidates and enhance the candidate experience. These technologies can help companies eliminate biases from recruitment, ensuring that talent is assessed based on skills and qualifications rather than gender, race or other irrelevant factors.

Demographic changes: a shifting workforce

On top of the asymmetrical supply and demand of the workforce, the global labour market is undergoing significant demographic changes, and one of the most prominent shifts is the ageing population. For example, recent studies have shown that in the City of Buenos Aires there are more pets than children, a product of the decrease in the natality rate.^[1]

This has a consequence on the labour market. As older employees retire, they leave behind positions that need to be filled by younger generations, such as millennials and Generation Z. These younger employees often bring a different set of values to the table, which includes a strong emphasis on corporate social responsibility, work–life balance and a commitment to inclusion. Companies that fail to address these values risk not only losing out on top talent, but also alienating the very demographic that is shaping the future of work.

Another important demographic trend is the increasing participation of women and people from different socio-economic backgrounds in the labour force. This growing diversity is creating a need for companies to rethink their policies, work environments and recruitment practices to ensure that they are appealing to a broader range of applicants. In this context, a diverse workforce is no longer just a moral or legal imperative, but a strategic necessity to remain competitive in the global market.

Moreover, the ageing population is not only about retirees; many older employees are choosing to remain in the workforce longer. This extension of careers means that companies need to offer flexible working conditions, retraining programmes and accommodation that supports them. This intergenerational workforce will require new approaches to leadership, communication and collaboration that respect and leverage the unique strengths of each generation.

Diversity and inclusion as strategic imperatives

The current context is a favourable one to diversity and inclusion (D&I), which has emerged as a powerful tool for attracting and retaining skilled professionals. A diverse workforce enables companies to tap into a wider pool of candidates, including underrepresented groups that may have been overlooked in the past. Also, D&I is an aspect that is increasingly valued by young talents, since an inclusive culture incentivises higher employee satisfaction, engagement and retention.

Legal implications

As workplace diversity and inclusion initiatives grow in importance, so do the legal frameworks that govern these practices. In many countries, labour laws are evolving to ensure that businesses foster fair and equitable work environments and Argentina is not excluded. These regulations not only address issues such as gender equality, disability inclusion and pay equity, but also mandate that companies take active steps to prevent discrimination in hiring, promotion and day-to-day operations. For example, Argentina has been moving in this direction: recently, it ratified the ILO Convention No 190 on harassment and violence in the workplace, created the Qualitas 190 Program and initiated the Green Employment Program for promoting the growth of green employment, favouring economic activities which are more considerate in the use of natural resources and environmental impact. Furthermore, it obliged companies to provide nurseries and day care centres for employees’ children between 45 days and three years of age, passed a Remote Work Law containing provisions aimed at promoting flexible working schedules compatible with personal and family obligations as well as other legal developments in relation to in-force regulations regarding family leave and anti-discrimination regulations. Case law has also evolved and stayed ahead of these changes, aligning their resolutions to the current legal standards.

Conclusion: challenges and opportunities

The current context implies significant challenges for companies in Argentina and worldwide: overcoming implicit biases in recruitment, promotion and day-to-day decision-making, overcoming resistance to change, and ensuring diversity.

However, the war for talent, labour shortages and demographic changes are not just challenges – they are powerful catalysts for promoting D&I in the workplace. D&I is not just a trend; it is a strategic priority that can provide a competitive edge in the global marketplace. By embracing D&I, organisations can attract and retain the best talent, foster innovation and create a more equitable and inclusive workplace for all employees.

As we look to the future, it is clear that the companies that will succeed will be those that adapt to the changing workforce in every aspect of their business operations.