Attracting qualified workers is a growing challenge for U.S. employers, even though data suggest there isn’t a significant labor shortage.

The number of unemployed Americans per job opening was 1.0 in May 2021, according to the U.S. Bureau of Labor Statistics (BLS). The June 2021 jobs report showed 77 percent of the prime working-age population was employed, and economists have expressed optimism about progress toward full recovery. The leisure and hospitality sector, one of the industries hit hardest by the COVID-19 pandemic, grew by 343,000 jobs in June.

However, industry and manual services workers are in high demand, with 80 percent of organizations reporting it is “somewhat” or “very difficult” to find qualified employees, up from 74 percent before the pandemic, according to a recent Conference Board survey. While demand is lower in professional and office settings, 60 percent of respondents said it is somewhat or very difficult to find qualified workers.

Nearly half of the organizations surveyed reported that it is somewhat or very difficult to retain workers, up from 30 percent pre-pandemic.

Hard-Hit Industries

The BLS tracks job openings by industry and region, seasonally adjusted. In May 2021, industries with the most job openings included accommodations and food services, leisure and hospitality, arts and entertainment, and recreation. Regional differences varied from rates of 5.6 in the west to 6.2 in the South. (The rate is the number of job openings on the last business day of the month as a percent of total employment, plus openings.)

Manufacturing (non-durable goods), state and local government, transportation, warehousing, utilities, and educational services were also among industries reported to be facing a tight labor market.

The Washington Post reported in June that workers in seven niche industries were in short supply, driving up wages and costs for consumers: sawmills and textile mills, specialized long-haul truckers and movers, finishing contractors, veterinarians (think spikes in pet adoptions) and, not surprisingly given widespread complaints of stress, anxiety and depression, mental health practitioners.

Exposure Risk

There are lots of reasons for tight labor markets – from global economic conditions to geographic location, to types of jobs, to personal preferences. Many workers were let go due to pandemic-related shutdowns; it’s not all that easy to bring them back.

For example, as restaurants around the country reopen, owners are finding former employees aren’t eager to return to work. Candidates are asking for higher pay and more flexibility. In this industry, front-of-house staff are paid minimum wage in most states and rely on tips for the majority of their income. Food service operations in tourist areas are particularly impacted. Many eateries have been forced to reduce hours of operation or close altogether.

Most staff leaving restaurant jobs say they would stay if they were paid a stable, living wage and felt safe. With the Delta variant causing outbreaks and only half of Americans fully vaccinated against COVID-19, workers with public-facing jobs feel particularly vulnerable.

Family obligations are another reason for worker shortages. For example, many previously employed parents have had to drop out of the workforce to stay home with their children because of poor childcare alternatives or closed schools. Some prospective employees have moved to more affordable communities, become disillusioned with their career choice or found ways to survive on government subsidies.

Immigration Restrictions

Many companies rely on workers, who come to the U.S. on H-1B and seasonal H-2B visas. Even though many restrictions had expired in March of this year and an additional 22,000 H-1B visas have been added to the original allotment of 66,000, it is still a challenge to process all of the paperwork. Immigration officials now face a backlog, putting many worker’s employment eligibility in question. In turn, many employers are left understaffed as customers return.

What to Do

Many companies are increasing salaries, offering sign-on bonuses and making benefits packages richer to attract qualified applicants. Major employers such as Amazon, Walmart, Costco and McDonald’s have raised entry-level pay.

Some companies, particularly in manufacturing and warehousing, are trying tactics such as paying workers weekly or even daily, rather than every two weeks. Others are attempting to expedite the hiring process by making job offers as soon as candidates complete their job interview. At some workplaces, the addition of health care benefits and paid sick leave may be necessary to attract lower-wage earners.

Equally as important, astute employers are responding to job seekers who demand high standards in workplace health and safety.

According to Jobvite’s 2021 Job Seeker Nation Report, nearly 60 percent of respondents said they would turn down a job if the company does not have established COVID-19 prevention and management protocols. In addition, 64 percent said they believe the job-seeking process is more stressful than it was before the pandemic, especially for parents, which suggests a need for mental health support services. (See our July 29 blog post on solutions for working parents.)

WorkCare helps employers create and sustain workplaces where recruitment and retention efforts are successful because of their demonstrated commitment to total worker health and safety. Check out other parts of our website to learn more.