Employers are in the midst of a Great Rehiring, but they’re finding too few workers are applying.
The reports of labor shortages are coming from all industry sectors, but are most pervasive among employers in hospitality, especially restaurants, construction, logistics and small retailers and markets.
“Right now what seems to be happening is that job creation is outpacing the search effort that workers are putting forth,” says Ioana Marinescu, an economics professor at the University of Pennsylvania.
If that seems odd when unemployment is 6.1% and the Department of Labor’s broader measure of under- and unemployment is 10.4%, you are not alone. The White House is trying to figure it out, sorting through the various explanations of labor economists, employers and pundits.
Four reasons for the labor shortage are most often given:
- The $300 supplemental unemployment insurance benefit is a disincentive to find a job, especially for hourly workers whose combined benefits may be as much or more than their usual pay.
- The lack of child care and schools still closed or on irregular schedules means a caregiver, often a parent, has to be home. This also covers relatives who require care.
- Those whose jobs require them to come into direct contact with the public may be hesitant to risk their health.
- Some may be rethinking their career choice, especially those in low-paying jobs or who perform physical labor for modest wages. Restaurant workers, among the poorest paid, may well be tempted to look to one of the many retailers who have raised starting pay and offer steady work.
Whatever the reason or reasons, the labor shortage is real and may get worse before it gets better. One look at the government’s report on job openings makes clear what’s happening. The number of openings which stood at 6.2 million in February before the pandemic shutdown, is now at 7.3 million. Yet at the same time, employers were able to make only 5.6 million hires.
Indeed.com, the world’s largest career site, said job postings as of May 7th were 23.4% over February 1, 2020, its pre-pandemic baseline.
Visage CEO Joss Leufrancois says the impact is being felt almost across every sector and every employer.
“Every day we hear from employers about how difficult it is just getting people to apply. Before Covid, they would get 50, 60 or 100 applications for an opening. Now, they might not get even one,” he said.
Unlike a job board or career site where employers post an opening and wait for candidates to apply, Visage actively seeks out top quality workers who aren’t actively looking.
“A company recruiter may have 10 or 15 jobs to fill at a time. Our recruiters are specialists with only one assignment at a time. That’s how we can turn over a first list of interested, qualified candidates in 24 hours,” explains Leufrancois.
Professionals who were considering their next career move before Covid, stayed at their job during the uncertain months of the pandemic. Now they are open to new opportunities. These passive candidates are who Visage sources.
The Labor Department’s data tells the story. In April and May last year, the number of workers who changed jobs was lower than at any point since the aftermath of the Great Recession. Since January, those numbers have surged. The rate is now higher even than for most of the pre-Covid period.
“We’re finding that the professionals we source are eager to hear about opportunities to advance their career; to take the next step they’ve been considering for a year,” says Leufrancois.
Some economists maintain that the imbalance between jobs and jobseekers will even out sooner rather than later. Others insist it won’t happen until this fall when the supplemental unemployment money expires. Just as many suggest that American workers have been transformed by their Covid experience and traditional recruiting will have to change too.
“However the labor market evolves,” says Leufrancois, “Visage will too. Our global community of sourcers and recruiters knows where the talent is going and how to find the great people employers want to hire.”
