The U.S had 9.3 million job openings at the end of April, according to data released Tuesday by the Bureau of Labor Statistics. It’s the second month in a row that the labor market has seen a record number of open jobs — and with a record-high 2.7 percent quit rate, it’s also an indication that workers are ready to walk rather than remain in a job they dislike.
The large number of vacancies is causing serious headaches on Main Street.
“I need to hire about 15 more people,” said Leonardo Williams, who runs a restaurant in Durham, North Carolina. Three years ago, Williams expanded the business he and his wife own to open Zweli’s Kitchen. Durham, N.C.’s first Zimbabwean restaurant, Zweli’s employed a staff of about 25 before the pandemic. Now, Williams is struggling to operate with a shoestring staff of five and relying on family members to pitch in. “My mom needs a day off,” he said.
Roughly half of workers in a recent survey said they would turn down a job offer that mandated full-time in-office work.
Williams isn’t alone: Nearly half of America’s small businesses can’t find workers, according to the National Federation of Independent Business. The seasonally adjusted 48 percent reporting unfilled job openings is a record high, the trade group said.
In April, nearly one-third of people handing in their notice were retail workers, who made up 116,000 of the 324,000 people who quit jobs that month, according to Tuesday’s Job Openings and Labor Turnover Survey.
Retailers are reluctant to raise wages and erode their margins — and are losing workers to employers who pay more, said Nick Shields, a senior analyst covering the retail sector at Third Bridge.
“There is a retention challenge, largely because from a labor standpoint, if you’re a worker and you’re at a smaller or more regional retailer, you’re going to jump ship,” Shields said.
Labor market experts say there are concurrent trends taking place in white- and blue-collar sectors that are making employees reluctant to take or keep jobs.
Employers are summoning back to the office the millions in white-collar professions who have been working from home for the past 15 months, only to find that many of them have no desire to once again take on the time and expense of commuting, nor to face potential Covid exposure. Consulting firm Korn Ferry found that about three-quarters of workers say they have more energy and focus when working from home.
“When you’re talking to job seekers or employees, there’s a lot more expectation from employees that they’ll be able to continue to work remotely — I’m hearing a lot less of that from employers,” said Andrew Challenger, vice president at executive outplacement firm Challenger, Gray & Christmas.
That disconnect will be a growing challenge, experts say. “I think it’s going to be harder for companies to get folks in those positions back because it’s been a year, and those expectations have built up,” said David Barron, a labor and employment attorney at the law firm of Cozen O’Connor. “Putting that genie back in the bottle is a real concern.”
“Employers are realizing they’re going to lose folks.”
“In some industries, it’s going to be a retention problem,” said Rue Dooley, HR knowledge adviser at the Society of Human Resource Management. “Employers are going to have to redesign what they do, which is part of why the hybrid model is trending. Employers are realizing they’re going to lose folks,” he said. The Korn Ferry survey also found that roughly half — 49 percent — of workers said they would turn down a job offer that mandated full-time in-office work.
Top executives at some companies and industries — the banking titans of Wall Street are one prominent example — have made no secret of their preferences to have employees back, en masse, later this year. “Employers want employees back in a physical location for a whole host of reasons,” Dooley said.
“It’s tough to do payroll when you have employees working from wherever they want to work,” he said, citing the “administrative nuisance” of employers having to keep track of where everyone would have to pay income taxes, especially if employees decide to work remotely from multiple locations over the course of the year.
There are also challenges related to corporate culture. “For example, if you’re an accounting person in a manufacturing plant… I think it becomes trickier for those companies for people in support roles,” Barron said. “It’s hard to let the white-collar folks work from home every day when everyone else has to be on-site,” he said, which could lead to resentment and even charges of discrimination.
“I think companies have to look at job descriptions — what are the essential functions of the job, what are the expectations going to be — and really rethink from top to bottom who needs to be in the office and how often,” Barron said.
“Some work activities, in particular, are easier to do in person, such as brainstorming on a white board,” Lindsay Duran, chief marketing officer at software firm Zilliant, told NBC’s TODAY show. Duran added that the company is reinstating its “Taco Tuesday” tradition as an incentive for workers.
Of course, millions of Americans work in jobs that can’t be done from behind a screen at the kitchen table. Restaurants, hotels and stores are scrambling to find workers to fill lower-paying positions as demand surges along with reopenings. Unlike their white-collar counterparts, much of the work can’t be conducted remotely, which presents unique challenges: Some workers in customer-facing positions — especially in areas with low vaccination rates — still fear contracting the virus, and working parents in these sectors are still sidelined by a dearth of child care options because they can’t work and supervise their children at the same time.
As a result, pay rates are rising as employers compete for people. Although average hourly retail pay rose by nine cents in May, Shields said many retailers are holding the line on higher wages by offering one-time sign-up bonuses.
If the labor market remains tight into the fall, though, they might have no alternative. “We’re in a wait-and-see mode,” he said.
This is the conclusion restaurant owners already have drawn: Average hourly earnings in May for workers in leisure and hospitality — a sector that added 292,000 jobs last month — jumped by 23 cents an hour over the month, compared to 15 cents across the board.
Williams said the competition for workers is fierce. “Chili’s is in the same parking lot with us, and they have a sign that says, ‘sign-on bonus $400 and $13-$18 an hour.’ We can’t compete,” he said.
But when he lost his kitchen manager to another restaurant, Williams said he had to take action. “Taco Bell was paying $17 an hour plus a $300 signing bonus. We fought for her and got her back, but we had to pay her $18 an hour. It was worth it because she pays a pivotal role,” he said. “She’s family here.”