Employers tasked with recovering from the economic blows of the COVID-19 pandemic are faced with the tightest labor market in memory with a record number of Americans quitting their jobs in August.
The U.S. Bureau of Labor Statistics “Job Openings and Labor Turnover Summary” released on Oct. 12, 2021, showed a record 4.3 million voluntary left their jobs in August, up from 4 million that quit their jobs in July.
Those 8 million+ who quit their jobs in the last two months of the summer have added to a labor squeeze with employers struggling to fill openings across the country.
“The explosion of quitting is the latest evidence that the balance of power in the labor market has swung towards workers, at least temporarily,” the New York Times reported this month. “Average hourly earnings have surged in the recent months, particularly for the lowest-paid workers, and yet many businesses report they are having difficulty finding workers.”
Five Factors Fueling the Current Labor Shortage
Brandon Vallonio and Tom Stretar, writing in Supply Chain Brain, argue that the COVID-19 pandemic did not create the tight labor market but that the coronavirus crisis amplified labor shortages and has accelerated changes in employment patterns.
The five factors they cite for today’s labor shortage include:
- Increase in e-commerce: The pandemic forced businesses to embrace years of digital transformation in a matter of months, and the logistics and supply chain has been playing catch-up ever since. Many of these jobs created by the move to e-commerce have gone unfilled or lured employees away from other industries.
- Shift in demographics: So-called blue-collar jobs have gone unfilled as the workforce demographics shifts towards more workers with bachelor's degrees or higher who hunt for white-collar jobs. Just 1 in 4 Baby Boomers, many of whom have retired during the pandemic, hold college degrees compared to 29 percent of Gen X, the generation behind them, and 40 percent of Millennials, who are becoming the dominant generation in the workforce.
- Evolution of the Gig Economy: The gig economy, with its flexibility to work the hours and days of choice, was already growing prior to the pandemic but has taken off since, growing 33 percent in 2020. Workers with health concerns about returning to the office, and parents with students still learning remotely are embracing gig roles with complete flexibility.
- Lack of access to and high cost of childcare: The cost of childcare has skyrocketed since the pandemic started, leaving many parents to choose between jobs and taking care of their kids. Some parents have left the workforce or changed jobs to better suit their childcare needs.
- Pandemic relief and unemployment benefits: Stimulus checks, and increased unemployment benefits provided some Americans with the cushion to not hurry back into the workforce during the pandemic. Many employees also used this unprecedented public health crisis to reevaluate their careers and focus on what is important to them. More Americans than ever are changing their career paths and moving to new industries.
“In this unprecedented market, one thing is for certain: the labor shortage isn’t going away anytime soon, and businesses must be agile and adaptable to stay ahead of the competition,” conclude Vallonio and Stretar.
Finding a Partner to Fill in Your Workforce Gaps
In this tight labor market, it can help to have a partner such as PRT Staffing to help fill workforce gaps.
PRT Staffing can provide both qualified skilled and temporary workers for short and long-term projects in the following industries:
- Construction and Skilled Trades
- Manufacturing and Light Industrial
- Industrial and Energy
- Disaster Recovery and Cleanup Services
- Hospitality and Event Staffing
Contact PRT Staffing today to find out how our workforce expertise can fit your business staffing needs.