Employers may be having a hard time filling roles, but job seekers have no shortage of options.
Even as the nation emerges from the worst of the COVID-19 pandemic and the economy continues its recovery, the hiring headaches employers have faced for months aren’t yet over.
The most recent data from the U.S. Bureau of Labor Statistics (BLS) from May shows a bleak picture that not even the impending end of extended federal unemployment benefits, scheduled to expire in Wisconsin on Sept. 6, may soon remedy.
According to the May Job Openings and Labor Turnover (JOLTS) report released July 7, there were 9.2 million job openings to close out May, a historic high. Hiring also dipped to 5.9 million in May from 6.0 million in the prior month. Even more telling that a candidate-driven market is on the horizon is the May quit rate — 2.5% — which remains near an all-time high.
“The report also showed the number of people voluntarily leaving their employment in May fell to 3.6 million from 4.0 million in April, although quits levels still rose in the leisure and hospitality, and accommodation and food services sectors,” notes a Reuters report. “The quits rate is usually seen as a barometer of job market confidence. People quitting their jobs now accounts for more than two-thirds of all job separations and remains well above pre-pandemic levels.”
The June unemployment rate nationally also rose slightly to 5.9%, up from 5.8% in May. The unemployment rate for college-degreed workers who are 25 or older also increased in June. The rate was 3.5%, up from 3.2% in May. These workers are in highest demand by employers. Wisconsin’s unemployment rate remains largely unchanged over the first half of 2021 at 3.9%.
Not all news was bad news, however. The BLS did report that employers added 850,000 jobs in June, outpacing many analysts’ expectations that U.S. employers would expand payrolls by about 700,000 positions. The latest jobs report also notes that new job creation in April and May was higher than previously reported — by 15,000 positions. With these adjustments, the U.S. economy has seen employment rise by nearly 3.3 million jobs since the beginning of 2021.
Leisure and hospitality employers, whose businesses have acutely felt the economic impact of the pandemic, led payroll expansion nationally in June by adding 343,000 jobs. The following industries also saw notable job gains last month, according to the latest jobs report from the BLS:
- Government: 188,000 jobs added;
- Professional and business services: 72,000 jobs added (including 33,000 positions in temporary help services);
- Retail trade: 67,100 jobs added;
- Education and health services: 59,000 jobs added;
- Wholesale trade: 21,300 jobs added;
- Manufacturing: 15,000 jobs added; and
- Information: 14,000 jobs added.
One reason some pundits have blamed for the difficulties employers are having in finding candidates to fill open roles is the expansion of federal pandemic-related unemployment benefits, which the Biden administration extended in March. According to Wisconsin Manufacturers & Commerce (WMC), unemployment claimants can receive $300 per week on top of the state’s maximum of $370 in unemployment benefits — the equivalent of nearly $17 per hour.
Assembly Republicans authored legislation that would have ended Wisconsin’s participation in the expanded federal benefits early, but Gov. Tony Evers vetoed Assembly Bill 336 on June 29, effectively allowing the program to run its course to its scheduled completion on Sept. 6.
“While Gov. Evers has consistently claimed there is ‘no data’ to prove the enhanced benefits are impacting the state’s workforce shortage, employers and numerous studies disagree,” a WMC release states. “In fact, data from the Federal Reserve Bank of San Francisco, the University of Wisconsin and others all show the additional $300 has made a noticeable contribution to the workforce shortage.
“Gov. Evers’ veto is a major blow to Wisconsin’s economy as it attempts to bounce back from the downturn caused by COVID-19 and the subsequent government restrictions,” continued WMC President and CEO Kurt Bauer. “His unwillingness to acknowledge that the $300-per-week supplement is incentivizing far too many people to stay out of the workforce shows how disconnected and detached he is to the plight of business leaders in his own state.”
Andrew Stettner, senior fellow at The Century Foundation think tank, offers another perspective.
“The governors who have withdrawn from the programs are complaining that federal benefits are holding back their recovery because certain employers cannot find the workers they need,” Stettner writes. “However, this claim ignores the fact that the money from federal benefits flows into local businesses through consumer spending, generating another $1.61 in economic activity for every dollar spent. Any benefits that the state’s businesses might receive from some of these workers, in terms of faster ability to hire them in the short term, would be overwhelmed by the loss of unemployment debit card swipes hitting the cash registers of those same businesses.”
Labor experts also say the labor shortage is not just about the $300 payment, notes an Associated Press report. “Some unemployed people have been reluctant to return to work because they fear catching the virus,” writes AP reporter Scott Bauer. “Others have found new occupations. And many women, especially working mothers, have left the workforce to care for their children.”
Still, job seekers should have no shortage of options coming available in the next several months, research from staffing firm Robert Half shows. According to its “State of U.S. Hiring” survey of more than 2,800 senior managers, 51% of respondents anticipate adding new permanent positions in the second half of 2021, and another 48% plan to fill vacated positions or bring back furloughed employees. Among the 28 U.S. cities in the survey, those with the highest percentages of employers who expect to staff up are San Diego (62%), Dallas (61%), and Atlanta and Los Angeles (58% each).
While many companies are optimistic about increasing staff levels, there will be hurdles. Senior managers predict the biggest recruiting challenges for the remainder of the year:
- Finding candidates with the right skills;
- Hiring quickly enough to land the best talent; and
- Finding candidates who complement the company culture.
“Hiring is happening across the board, and competition for talent is intensifying. Simultaneously, job seekers are becoming more discerning when evaluating opportunities,” says Robert Half senior executive director Paul McDonald. “With these two forces at play, employers need to exceed candidates’ expectations or risk losing them to better offers.”
According to the research, some companies are pulling out the stops to entice prospective hires:
- 48% are providing signing bonuses;
- 43% are giving more paid time off; and
- 40% are offering better job titles.
But there are some non-negotiables. Only 10% of senior managers are willing to overlook soft skills and certifications when recruiting for hard-to-fill roles. The qualifications they are most willing to bend on include:
- Advanced degree (23%);
- Years of experience (19%); and
- Education level (14%).
Many employers are also flexible when it comes to a candidate’s location. Senior managers said it can take up to seven weeks, on average, to hire for an open position; for nearly one in four employers (22%), it can take more than two months. When faced with a lengthy hiring process, 60% of companies are broadening their search beyond their geography to find qualified candidates.
Further, a preliminary survey from Robert Half shows roughly seven in 10 managers report increased staff turnover on their teams since the start of 2021 and nearly half are offering signing bonuses to win over top talent.
McDonald notes, “Professionals with in-demand skills often have their pick of jobs. To stand the best chance of winning over top candidates, employers need to modernize and minimize role requirements, move quickly, and make the most competitive offer possible from the start.”
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