When Will All the Workers Return?
The question that everyone is asking
On Monday of last week we had to take our dog Prince to the animal hospital. The nurse greeted us and then informed us that they’re way understaffed and she apologized up front as it’s going to take longer than normal.
On Wednesday we were notified that my child’s school was postponing their hot lunch program due to not having enough workers to operate it. On top of that, all the local school systems are having bus driver shortages. This has forced parents to drive their kids to school sponsored sporting events and some schools to even change their hours.
On Friday the two coffee shops that I visit daily, both posted they now have to close on Sundays. A third local coffee shop had to close permanently. Two restaurants and a lunch spot all closed permanently. Yes, for the coffee and food lovers like myself it was a rough day!
You can’t open the daily Wall Street Journal or New York Times without seeing a story about the job market. Judging by what I’ve experienced this past week, I shouldn’t be surprised.
Over the past month I’ve seen more businesses permanently close than any other month since the onset of the pandemic. Most all of these businesses have been in business for a good number of years. We aren’t talking about new ones.
There isn’t a business that doesn’t have a hiring sign up. Fast food restaurants have been offering $1-2,000 signing bonus and still can’t find workers. No matter who I talk to and what part of the country they’re in, it’s the exact same situation.
I’ve spoken to people in the following industries and occupations this past week; doctors, restaurants/fast food, veterinary, nurses, carpenters, plumbers, financial/banking, roofers, masons, electricians and manufacturing. They all are complaining about the worker shortage and how it’s having an overall impact on their operations. Basically it has spread to all industries.
This is what greeted me when I went to pickup pizza last weekend from a local pizza place. Nobody can disagree.
What’s the issue?
That’s the billion dollar question that everyone is trying to figure out. Economists, analysts and commentators have been arguing about this for months. Contrary to everyone’s own opinion, there is no current quick fix to this issue. If there was a clear answer, it would have been addressed a long time ago.
People starting their own businesses. This statistic skyrocketed during the pandemic. It’s come down a bit of late but still it’s very high relative to history. Some brush this off and doubt much of this is really for full time work. Does that really matter though? If someone is starting a business, their goal is to try their hardest to make it succeed and be their primary career. I feel there are a lot of people taking this route where they want to control their future and are going to do their best to make a go of it. The best of luck to everyone that’s going after it.
Increase in retirements. We’ve seen an uptick in baby boomers retiring. The pandemic accelerated the retirement dates for many. This number moving forward should revert back down to the average rate. But we have lost a large number of the baby boomer generation of workers in the past year.
Enhanced Unemployment Insurance. The most common answer to the issue was the enhanced unemployment benefits. That almost seemed too easy of an answer. Turns out that wasn't entirely it either. See the below article and chart from last week’s Wall Street Journal article.
Economists who have conducted their own analyses of the government data say the rates of job growth in states that ended and states that maintained the benefits are, from a statistical perspective, about the same.
“If the question is, ‘Is UI the key thing that’s holding back the labor market recovery?’ The answer is no, definitely not, based on the available data,” said Peter Ganong, a University of Chicago economist, referring to unemployment insurance.
People YOLOing (You only live once). This doesn’t show in any measurable data, other than as a net job loss. Some will show under the starting your own business data metrics. Think how many younger people you know that are not employed but rather experimenting, traveling and trying new things to see what they want to do? They’re taking risks in starting their own businesses. They don’t want a boss or to answer to anyone. They’re taking time out to travel and see things they’ve always wanted to do.
I can make a long list of people who have decided after experiencing the pandemic that life is short and they’re going to do what they’ve always wanted to do. And right now that does not include being employed by a company. Life is about taking risks and finding things out for yourself. Many more people are doing this than people realize.
How to Overcome
Employers need to start thinking, how do they stand out to prospective employees. If they can’t find someone fully qualified or that checks all the boxes that they want, then they need to start training people to do what they want. The below chart shows that companies are still turning away candidates.
It’s not a time to be picky. You can’t say as an employer that you can’t find anyone to hire, when you’re turning away people because of lack of experience. Train them!
Back in May, I wrote a post about hiring for a career, not a job. The worker shortage at that time was already causing problems. Since then, it has only accelerated. In the post there are some tips and ideas to help attract prospective employees.
Businesses are going to have to find ways to be creative. Increasing pay, thinking of unique or better benefits to make them stand above other job openings. Have a training program and show them the planned steps. Show how someone can advance and make a career at your company. Make them feel wanted and a part of something. Need to think outside the box.
I think my favorite new example of this is how companies are starting to pay people at the end of each day. Daily payroll checks. People aren’t having to wait a week, two weeks or a month to get paid. At the end of your days work, you’re paid. This is very appealing to workers. It costs a lot to implement this type payroll system, but companies have found that this is a way to stand out and be different.
Like everyone else I don’t have an answer to the worker shortage dilemma. There are a lot of things adding up to cause this. I do believe what we’re seeing is a great reshuffling. Many people viewed the pandemic as a time to reset their careers, lives and are still deciding what they want to do. This also goes for families with children where both parents were or still are working full time.
View it as a game of musical chairs. A lot of people are deciding where they want to sit. The music will eventually stop and when it does, employers need to make sure that their chairs are as appealing as possible.
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