Employers Feeling Squeeze of Tightening Labor Market

According to numerous articles published in the past two weeks, employers across the country are struggling to fill open positions despite the millions of unemployed workers that remain after the pandemic fueled job losses in 2020. There are concerns a labor shortage could stagnate a robust economic recovery as Americans resume consumer spending and pre-pandemic activities. Yet, many businesses cannot afford to increase wages further as they are still recovering from the devastating economic impacts of the pandemic, so they are forced to operate at reduced hours or turn down projects. The recent announcements waiving mask requirements for fully vaccinated individuals only add to the sense of urgency as businesses anticipate a surge in business.

In some areas, the lack of available workers has become so dire that states are rolling back extended unemployment benefits before the September expiration. With a reported unemployment rate of only 3.8%, Montana is now offering a one-time incentive payment of $1,200 to unemployed workers to accept and remain at a job for four weeks. Similarly, Colorado recently announced they will be offering bonuses up to $1,600 to unemployed workers who accept jobs.

However, Heidi Shierholz from the Economic Policy Institute refutes the idea of a widespread labor shortage. In a recent article, Ms. Shierholz said one reason for the hiring difficulty is employers refuse “to raise wages high enough to attract workers,” and she suggests the lack of candidates could be resolved by employers increasing pay and benefits. Ms. Shierholz’s claims are directly contradicted by the US Department of Labor’s report that the average hourly wage rose by 20 cents in April, fueled by “the rising demand for labor associated with the recovery from the pandemic.” In fact, there are four million fewer people in the labor force from a year ago, and wages for private sector workers rose 3% in the first quarter when compared to 2020.

Employers struggling to find workers attempt to lure candidates with hiring bonuses and flexible job requirements, but often small business owners do not have the expertise or time to commit to recruiting while simultaneously running their organizations. If your organization is struggling to find qualified workers, we can help. Employers Council offers pay-as-you-go recruiting services and temporary outsourced HR professionals. For more information, email HRPSManager@employerscouncil.org. For members needing a DIY option, we provide tips and guidance on recruiting best practices; feel free to contact us any time.

Here are some articles on the subject:

As small businesses recover from the pandemic, they face a new obstacle: finding workers

Where are the workers? Small businesses struggle to fill jobs.

Millions Are Out Of A Job. Yet Some Employers Wonder: Why Can’t I Find Workers?