We’re now well into the fourth quarter, and the holiday season is officially upon us. We are cautiously optimistic that there’s a light at the end of the tunnel of the pandemic. However, the labor market has yet to match the same level of enthusiasm in its return.
Here are some quick details to summarize the current situation:
The demand is there. Employers have added up to half a million jobs per month over the past several months. However, workers are quitting their jobs at a more accelerated rate—4.4 million in September alone according to the Bureau of Labor Statistics report.
Weekly jobless claims and continuing claims continue to decrease, and new claims dropped below 300,000 in mid-October for the first time in 19 months. (Reuters)
Supply chain issues and materials shortages persist, aggravated by closures and employee shortages early in the pandemic. As a result, inflation hit a three-decade high of 6.3% in October, per the Wall Street Journal.
The uncertainty of the Great Resignation looms. Gen Z and Millennials, who make up 50% of the workforce and will make up 75% by 2025, are well-positioned to find new ways to earn income.
Why have workers not returned as the pandemic outlook grows more positive and supplemental benefits are discontinued? It isn’t just one thing. It’s the culmination of several things.
First, as a reminder, prior to the pandemic the labor supply was already at an historic low, with a 3.5% unemployment rate in February 2020. It was a candidate’s market, and “ghosting” interviews, training, and first workdays were already becoming prevalent. The multi-faceted pandemic was more the tipping point than the cause itself. Fast forward to now, and there are numerous factors keeping people out of the workforce:
Extended government relief, unemployment benefits, easement of housing regulations, and access to home equity enabled people with the financial means to take more time off from work to focus on personal needs, change careers, pursue additional training and education, and more.
Overall, there are less candidates available. 5 million people left the labor force during the pandemic. About 2.5 million of those people retired, and won't come back, leaving large labor holes.
People are concerned with the state of child care and its volatility, and child care providers are struggling to find staffing. As a result, more people—particularly women—are staying home to care for their children.
Also related to children and more largely affecting women, people are staying home to support their children’s education. According to the Census Bureau and Gallup, home schooling doubled from spring 2020 to fall 2020, and it is up as much as 300% in many areas since the beginning of the pandemic.
The economy is quite strong by the numbers (10 million open positions). Interest rates are low, the construction market is on fire, and jobs are plentiful, allowing candidates to be highly selective.
This combination of elements, as well as more unique situations, have enabled people to rethink their work life and their approach to actively participating in the workforce. Of the 4.4 million previously mentioned who have quit their jobs, almost a million left the restaurant and hospitality industry, and not far behind are more manual labor positions in industries such as manufacturing and construction—all jobs that have historically low wages but are essential to keep the country running. So-called “Gig Economy Jobs”, like Uber drivers and dog sitters, now offer attractive pay and benefits with the added flexibility that workers highly value.
With that in mind, brand reputation and the right positioning to potential candidates have never been more important. Ensuring competitive wages is essential, but candidates are looking for more than just money in today’s market.
Source2 has decades of experience in recruiting, as well as success in the current market, and we can help with wage analysis, brand positioning, and recruiting on the right channels with the right content to help find the employees businesses on the front line need. We’ll be providing guides on simple and cost-effective ways you can better position yourself in upcoming articles, but we encourage you to connect with us for a conversation now by emailing email@example.com.