Like many other business owners, you probably have openings at your company that you need to fill. And just like many business owners you can not open a news resource without seeing reports that many people are unemployed. It feels like this should be a no brainer, companies need staff, and many are out of work, so why aren’t people beating down your door to apply?
The latest monthly Job Openings and Labor Turnover Survey, or JOLTS report, from the U.S. Department of Labor (DOL) showed job openings surged to a record high in March, led by 185,000 new openings in hospitality and food services. Openings overall shot up 597,000 to 8.1 million by the end of March, the highest monthly total since the report debuted in 2000. "The extraordinarily high job openings number is a sign of how strong labor demand is as employers quickly ramp up after almost 16 months of an economy that was ravaged by the pandemic," said Nick Bunker, an economist at the Indeed Hiring Lab.
Meanwhile, nearly 10 million people are classified as unemployed, meaning they are actively looking for a job. Payrolls increased by only 266,000 jobs in April, the unemployment rate crept up to 6.1 percent and employment is more than 8 million jobs below where it was in February 2020, before the coronavirus pandemic emerged to wreak havoc on the economy. So, what is behind the disconnect among an abundance of open jobs, persistently high unemployment and the lack of workers applying for those jobs?
"It's a really complex issue, and the answer lies in a confluence of a number of things," said Isabel Soto, the director of labor market policy at the American Action Forum in Washington, D.C. "One popular culprit is a lack of access to childcare. Another is still the pandemic itself."
Pandemic-related early retirements may also be more significant than previously thought, Bunker said. And there is still a historically large number of people who report being on temporary layoff or furlough, who may be holding out for their old jobs, he added.
A skills mismatch is another explanation for the apparent worker shortage, as those classified as unemployed may not have the skills to qualify for open roles. Still others say employers need to pay higher wages. Companies like Chipotle and McDonald's are announcing that they are raising compensation for hourly workers and offering referral and signing bonuses to attract workers.
The most contentious debate over the reason for reported labor shortages revolves around the weekly $300 federal unemployment benefit, which is paid on top of regular unemployment payments. There are also new programs that cover people who are self-employed, gig workers and others who do not qualify for regular state unemployment insurance programs, as well as waived eligibility requirements to receive unemployment benefits. Economists have found that, on average, anyone who previously made less than about $34,000 per year would receive more money by collecting jobless benefits than the person would by returning to work. Are the enhanced benefits, due to expire in early September, temporarily discouraging millions of people from rejoining the labor force?
Some business owners have begun to get creative when it comes to enticing applicants by offering interview bonuses and sign on bonuses, but what happens when you cannot afford to keep piling on the bonuses? Sign up to receive our weekly newsletter to receive a list of ways you can attract and retain employees when you are still trying to watch your bottom line. In the newsletter we tackle how to offer incentives that are not financial.
Excerpts from this article come from Shrm.org