Why Companies Fear the Growing Labor Shortage
Companies throughout the U.S. are struggling to fill job positions as COVID concerns and fears of burnout have led to a work shortage. Cheddar News’ Ken Buffa spoke to Andy Challenger, SVP of Challenger, Gray & Christmas about the trends in the labor shortage ahead of what was a weak August Job Report.
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Ken Buffa, Anchor at cheddar
Welcome back to ‘On the Job’ the August jobs report the US labor market continues to struggle to fill positions as employers try to find ways to make their openings more attractive. Now ahead of the August job report we are joined by Andy Challenger SVP at Challenger, Gray and Christmas. So Andy, what are you expecting from the August job numbers?
Andy Challenger, svp at challenger, gray & christmas, inc.
Yeah, most economists expectations are that we’re going to add about 720,000 jobs to the US labor market over the course of the last month – down a little bit from the averages we’ve seen in June and July, but still a historically strong number. The real question is whether the rise of the Delta variant over the last month has impacted the hiring numbers that we’re going to see coming out of this report.
Let me ask you why are so many employers struggling to fill positions?
Yeah, there’s very clearly a labor shortage going on across the economy and a recent survey we did found 85% of employers said they’re having a difficult time filling roles right now, and that due to a number of different reasons. Clearly the continued prevalence of COVID-19 is part of the equation, there’s people that are unwilling to go back to work, because of the danger that’s still out there.
There is also a childcare crisis continuing throughout this period, lots and lots of single parents, working parents in particular we found in our surveys are having a difficult time going back to work without sufficient way for their children to be taken care of with schools and childcare facilities closed. And then we also have these extended and enhanced unemployment benefits that are going to expire next week. Those are part of the equation as well. And we’ll start to see, once those are go away over the next coming weeks, we’ll see if that has a major impact on solving this labor shortage.
So I have to ask you what recent trends, if any, are you seeing in job searches?
In job searches we’re seeing that people are having a particularly hard time landing, companies are having a particularly hard time filling in-person roles to those positions that are requiring people to be back in the office, or to be on the front line and a lower wage position have been really difficult to fill, yet at the same time, we’re seeing the highest quits rates, we’ve ever seen nearly 4 million Americans each month, over the past few months and quit their jobs. That’s usually the sign of a really strong labor market that people feel confident, that they can leave those jobs and go out and find new positions. And so that’s very clearly possible for a certain category of positions, those tend to be more white collar roles, those tend to be people that are able to go find another job that allows them to continue working remotely, that’s a major concern, we’re seeing amongst job seekers that they want to find positions that allow them to keep this set up that they’ve experienced over the last year and a half.
Could vaccine mandates in businesses – will it make it easier for businesses to fill position or will make it tougher for them to do it?
Yeah, I mean almost certainly going to make it tougher to to fill those roles, it is an extra hurdle. So it’s a little bit surprising to see companies during the mandate in the midst of this labor shortage, yet at the same time, I think there’s also a recognition among businesses that COVID-19 may well be with us for a very long time. This might just be the way that we’re going to be working and living in the future with the prevalence of this disease – it’s still out there, and so you’re seeing dozens and dozens of Fortune 100, Fortune 500 companies, announcing, they’re going to do these mandates, at least for their corporate offices to keep people safe. Companies obviously would prefer if all their employees were vaccinated, they don’t have the risk of outbreaks within their offices, and the potential following lawsuits, but at the same time, it’s a difficult mandate to put in place right now in the midst of the labor shortage.
Andy Challenger SVP at Challenger, Gray and Christmas. Andy, thank you so much for being with us this morning.