Who are Gray-Collar Workers?

A teacher, a gray-collar worker, teaches students

They say hindsight is 20/20. And while nobody could have predicted a global pandemic, many of the challenges organizations are grappling with—from the rise of remote work to skills and labor shortages—have been looming on the horizon for years, if not decades. The pace of change, however, has increased exponentially, making adaptability and trendspotting critical to business success.

Each year, UKG brings together an international team of researchers, social scientists, and business leaders to identify the most significant trends impacting the global workforce. Our goal is to look beyond the next 12-18 months, providing insights and resources to help our customers and prospects prepare for what’s coming next.

We call these UKG’s HR Megatrends, and this year our Megatrends explored the changing nature of the workforce, leadership, and compliance. Today, we’ll be focusing on one of the three Megatrends: the growing influence of the gray-collar worker.

Introducing the Gray-Collar Worker

If you’ve never heard the term “gray-collar worker,” you’re not alone. Workforce conversations have traditionally centered around either white- or blue-collar workers, with extra attention—and investment—typically given to white-collar employees. This is problematic for several reasons, but notably because these generalizations overlook many crucial (and growing) subsets of the workforce that don’t fit nicely into either category. The moniker “gray-collar” has been used to bridge the gap for nearly two decades, but the term isn’t widely known. Unfortunately, the truth is that employers have been overlooking this population’s unique needs and potential as well.

This is to their detriment. Gray-collar workers are, in many ways, the jobs of the future. Gray-collar workers often find themselves at the intersection of technology and service; in most cases, these are positions that require some combination of physical and technical skills (such as healthcare workers, teachers, robotics engineers, etc.). Many of these roles are the result of increased digitalization, which was fast-tracked during the pandemic.

The hybrid functionality makes gray-collar roles challenging to fully automate, and as a result, their prevalence is skyrocketing (and will continue to do so). Of the Bureau of Labor Statistics’ top 20 fastest-growing roles, 13 could be classified under the “gray-collar” category.

Growing Talent Need with Anemic Talent Pipeline

While these industries are ripe with predicted job growth, these are also the fields where many employers are finding it incredibly challenging to both hire and retain their people. In addition to the Great Resignation and its accompanying talent shortage, gray-collar employers are also facing issues such as pandemic-related burnout (many gray-collar workers are also classified as “essential workers”), widespread demand for remote and hybrid options (which are not typically offered for these industries), and an aging workforce.

Additionally, employers around the world are facing a reskilling emergency, particularly when it comes to technological skills gaps. Korn Ferry predicts the talent shortage will likely reach 8.5 million people by 2030, resulting in $8.5 trillion in unrealized annual revenues. Considering the highly specialized skillset of many gray-collar roles, these fields are at the forefront of this crisis.

Attracting, Reskilling, and Retaining Gray-Collar Workers

To remain competitive long-term, organizations will need to do a much better job of attracting, developing, and investing in this crucial segment of their workforces. Some suggestions, based on our research, include:

  • Rebrand these jobs to make them more attractive. These are highly skilled, often highly compensated roles, but because they aren’t traditional knowledge work, they’re often overlooked as a lucrative career choice. It will be particularly important to attract younger workers into these roles.
  • Rethink college degree requirements. Career inflation has seeped into some of these roles, creating potential barriers and driving inequity. College degrees are often unnecessary for these fields due to the significant amount of on-the-job training required. Employers should carefully consider whether college degrees are appropriate for each job description, while incorporating skills-based assessments into their interviewing processes.
  • Invest in reskilling and upskilling. This can be accomplished through traditional learning and development solutions as well as through initiatives such as apprenticeships, internal gig economies, and intrapreneurship opportunities.
  • Retention through respect. Gray-collar employers will have the most success retaining their people when they invest in their most-desired benefits, such as flexibility, autonomy, and increased compensation.

The world is rapidly changing—but organizations have proven they’re capable of keeping up. Staying abreast of major trends and understanding how adjustments in one area lead to butterfly effects in others, is critical to ongoing agility efforts.

For more information on the growing gray-collar workforce, as well as the other Megatrends, check out this webinar or resource page on the topic.