Several industries are facing critical staff shortages, and are receiving even fewer applications, despite offering some appealing incentives.
With so many businesses struggling amid the shortage, many are asking when -- and if -- this crisis will end.
“Get Caught Up” is ClickOnDetroit’s Saturday news review to help readers catch up on the biggest stories of the week.
Why is there a labor shortage right now?
You’ve heard time and time again that the coronavirus pandemic triggered the shortage of workers we are seeing today -- but it may not be for the reason that you think.
Matt Piszczek, a business professor at Wayne State University, says that the assumption that unemployment checks kept people home during the pandemic is incorrect. Instead, a lot of people began to rethink their careers, priorities and life goals after the health crisis hit.
“The pandemic gave them an opportunity to reflect on whats important,” Piszczek said. “So, things like flexibility became more important than an extra dollar an hour.”
Another issue that kept people home is the actual pandemic itself, and fear of COVID-19. Many of the job gaps that exist today are in lower-wage work, specifically in the health care and food service industries.
“They’re customer facing. They deal with the pandemic directly,” Piszczek said. “It makes it even more difficult for people to justify going back to work and putting themselves in a potentially precarious situation.”
Even with the pandemic improving in some places and some people wanting to return to work, yet another issue is keeping people at home: child care.
“Small outbreaks can cause schools to close, and people are not willing to take the risk if they think they might have to stay home to take care of their kids,” Piszczek said.
Experts say that many people who left the workforce have found other ways to financially survive -- like cutting budgets and spending habits, for example, or gaining a supplemental income.
So, of the three million people who left the labor force, Piszczek believes that roughly 15% of them -- about 450,000 -- won’t ever go back to work.
“Why work in a job that you don’t enjoy or value if you found another way to make it work?,” Piszczek said.
With a better understanding of why the labor shortage exists, what are some solutions for fixing it?
What businesses can do
Piszczek says that businesses need to adapt to this new working climate.
“If you are able to offer the option to work from home, you should offer that option,” Piszczek said. “People value that, especially in the context of the pandemic. The will work just as well as they would otherwise, and they will greatly appreciate it.”
Another way to attract and retain employees: Do everything you can to build an encouraging and positive work environment for your staff.
“People will work for lower wages if they have a good environment,” Piszczek said. “There’s a trade off. People put value on work environment as opposed to the dollars per hour that they’re making.”
If employers can find a way to make their people feel valued, aside from just the wages they offer, the workers will start coming back.
“Trust your employees, be flexible and focus on creating an environment where employees enjoy working for you so they won’t bail for another employer who is paying slightly more money,” Piszczek said.
As for when the shortage will end, it’s hard to say -- but it certainly depends in part on how quickly these struggling industries can adapt.
Americans quit their jobs at a record pace in August (AP):
One reason America’s employers are having trouble filling jobs was starkly illustrated in a report Tuesday: Americans are quitting in droves.
The Labor Department said that quits jumped to 4.3 million in August, the highest on records dating back to December 2000, and up from 4 million in July. That’s equivalent to nearly 3% of the workforce. Hiring also slowed in August, the report showed, and the number of jobs available fell to 10.4 million, from a record high of 11.1 million the previous month.
The data helps fill in a puzzle that is looming over the job market: Hiring slowed sharply in August and September, even as the number of posted jobs was near record levels. In the past year, open jobs have increased 62%. Yet overall hiring, as measured by Tuesday’s report, has actually declined slightly during that time.
The jump in quits strongly suggests that fear of the delta variant is partly responsible for the shortfall in workers. In addition to driving quits, fear of the disease probably caused plenty of those out of work to not look for, or take, jobs.
As COVID-19 cases surged in August, quits soared in restaurants and hotels from the previous month and rose in other public-facing jobs, such as retail and education. Nearly 900,000 people left jobs at restaurants, bars, and hotels in August, up 21% from July. Quits by retail workers rose 6%.
Yet in industries such as manufacturing, construction, and transportation and warehousing, quits barely increased. In professional and business services, which includes fields such as law, engineering, and architecture, where most employees can work from home, quitting was largely flat.