Signs. Signs. Signs.

Signs are everywhere with the same message: Help Wanted.

Given the tight labor market, those two words are often accompanied by two more: “Signing Bonus.”

TBM photo by Emily Calkins.

While many observers point to long-running unemployment benefits in the wake of COVID-19 as the reason for the issue, others call it only part of the problem.

“The insurance checks help but they aren’t necessarily generous,” said John Collard, chairman with Strategic Management Partners, in Annapolis. “But when people are sitting at home and getting paid for doing nothing, they’ll keep doing it. The federal government is looking to stop it and states are following suit.”

Reasons Vary

But Collard cited various reasons for the dearth of workforce.

“For one, technology. That’s been happening since well before COVID-19. When you furlough or lay off employees, technology can take over. That can mean certain jobs are never coming back, so workers retrain,” he said.

Also, in the past year-plus, more people enjoyed the ease of working from home.

“But hospitality workers can’t greet hotel guests from home,” he said.

Collard feels the technology for telework and online shopping “has created behavioral changes in society. When people can work from home, they often do. Even corporate help desks, for instance, have been set up for homework during COVID-19.”

Sharing similar thoughts was Shad Ewart, assistant professor and academic chair at Anne Arundel Community College.

He, too, thinks the unemployment benefits are playing a part in shaping the current market, “but only in certain industries. But there are other concerns. The health concerns are part of this equation. The hospitality industry is where they have face-to-face contact with many people. But as more people get vaccinated, they may go back to work.”

Family circumstances are also a consideration.

“Some people are still needed at home, in relation to a child’s education and care. And so many childcare businesses and home providers have closed that those workers have had to find something else. So that service is not as available,” he said.

Other Options

Another circumstance is that people usually “grow to the size of their paychecks,” said Ewart. “If they’ve been getting $15 an hour on unemployment, they may have to take a pay cut” to rejoin the workforce.

And many service workers have looked elsewhere.

“Some have found work at Amazon, Target, Walmart and grocery stores that have been offering $15 an hour – with much less hassle concerning dealing with other people,” he said.

Anirban Basu, chairman and CEO of Sage Policy Group in Baltimore, sees a bigger picture.

“Many workers are simply choosier about the jobs they want to embrace,” said Basu. “Some are looking for remote work, others for substantial amounts of flexibility.”

And as is the case with the hospitality workers, “not every position (e.g., construction worker, mechanics, truck driver) can offer the degree of flexibility to which many workers aspire,” he noted.

The result?

“In many occupational categories, it has become challenging to find the right people,” said Basu, noting some businesses are hiring workers without interviews. “What’s more, many Baby Boomers accelerated their retirement, costing America many of its most experienced and dedicated workers.”

Now What?

So, what to do? Basu said there is no single solution.

The answers may be “very challenging to implement. We need a culture shift,” said Basu. “Too many people have chosen not to engage the labor market. Too many people have no sense of the career opportunities that prospectively await them. Too many people think that a four-year college degree is the only pathway to prosperity,” he said.

Basu added, “If we invest more money in infrastructure, we need to have an accompanying set of programs to train people for those types of jobs. We need to accelerate human capital formation and not simply via the classroom.”

That could well be a solid way to restructure the workforce. But for now, millions of service jobs need to be filled for the hospitality industry to come all the way back.

“Amazon and others have set the floor at $15,” said Ewart. “To buy one’s way out of this problem, the markets dictate that wages have to come up in the service industries, since they’re now competing for workers.”

He said, “We’ll find a new normal and we won’t be going back.”

By Mark R. Smith | Senior Writer | The Business Monthly | August 2021 Issue