The New Reality of HR

How the worker shortage is changing hiring practices

Jim Wall

While the worker shortage in the hospitality and service industries has been well documented in Southwest Florida and nationwide, other industries are having difficulty hiring new employees, as well. And while most experts note there are several factors contributing to the current worker shortage, a recent virtual career fair vividly highlighted the problem.

“We average 70 employers [at our career fairs], and there were about 200 job seekers, which was way down from the 1,200 to 1,500 we’d have pre-COVID,” says Jim Wall, communications director of CareerSource Southwest Florida. “They were hiring on the spot. But it’s not necessarily the best scenario to be offered a job right away; employers need to have background checks, drug testing. It generally would take a good week or two to process a new employee through an onboarding process. Many employers have foregone that and just said, ‘Hey, I need somebody. And I need them now.’”

Though the federal government’s supplemental unemployment benefits program, which has been paying $300 a week to the unemployed, has received much of the blame for the worker shortage, Wall believes it’s only one of the causes. Other factors include an employee’s reluctance to return to the workplace due

to COVID-related health concerns, a lack of affordable childcare and a desire for higher wages. In addition, another significant element contributing to the worker shortage, Wall said, is simply an aging workforce.

“There are 75 million baby boomers who are aging out of the labor force. The next generation below is Generation X. There are 56 million Gen X potential job seekers. So, right off the bat, there are 14 (million) or 15 million less potential job seekers,” Wall says. “The millennials were introduced to the gig economy and e-commerce. They are not necessarily interested in your traditional 9 to 5. When you get to Generation Z, they are still in high school, (and) they most definitely do not want to do what their parents did.”

Tom Smythe

As the effects of the pandemic begin to ease, elimination of federal unemployment benefits, higher vaccination rates and the reopening of schools and daycares will likely spur many people back into the workforce. However, according to economist Tom Smythe, a professor at Florida Gulf Coast University, the desire for higher wages may ultimately have the largest impact for job seekers, employers and consumers.

“The primary place that we’re seeing this (worker shortage) pinch is in the service industry, hospitality, restaurants, those kinds of things,” Smythe says, “any other types of jobs that are historically low wage, low skill. We’re starting to see reports both in the national press and locally of companies increasing the wages that they’re offering, as well as doing other things to try to get people to work, including signing bonuses. Employers are going to have to raise what they’re willing to pay or not have capacity. Assuming they do raise those wages, eventually, I would expect it to flow through to the consumer in terms of higher prices.”

Smythe continues, “In the national media, it’s almost like, ‘Well, you can raise wages now and then lower them again when the demand has sort of equated supply,’ and that’s just not true. And once wages go up, they stay up. So businesses have to be very careful that they feel comfortable that, if it’s going to require raising wages to bring people back into the job pool, that they’re also going to be able to raise prices and keep those prices where they are. That sort of a settling process is going to take place, probably, over the next six months.”

From a workforce perspective, Wall said the combination of the worker shortage and the booming economy has created the most advantageous environment he’s ever seen for job seekers. For employers, however, the outlook may not be as optimistic.

“I think businesses will continue to have a hard time in recruitment for the next three to five years. We seem to just be concentrated on the Help Wanted signs in the stores when, in fact, I think we really need to take the longer view of what the workforce is; the training, education, return on investment for a four-year degree versus certifications and on-the-job training,” Wall says. “I think we are in this transition, and I don’t think we’re going to go back to the good old baby boomers, where we work from 9 to 5 for a company for 15, 20, 30 years. My message … from the business aspect would be: Continue recruiting, but put much more emphasis on retaining your workforce, and I think we will get through this.”

Photo Credit: Florida Gulf Coast University, Getty, CareerSource Southwest Florida