The labor shortage is truly impacting so many parts of our lives, from airlines to hotels, restaurants and rideshare — even hospitals. And there's concern this lack of workers could last for years to come.
“A year or two years. It took a long time to get to this point, it’s not going to just change overnight,” said Barbie Barta, a workforce and hiring expert who is the CEO of Dallas-based staffing firm, Business Centric Technology.
Data shows the number of working-age people shrank in 2020.
On top of that, COVID-19 has ushered in an influx of early retirements from baby boomers. According to the Federal Reserve Bank of Dallas, about 2.6 million people who were working before the pandemic say they are now retired and not looking for a job.
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“We’ve been expecting that for a long time, it just never came to fruition but I think COVID helped that. I think that’s a big part of what we’re seeing with a reduced amount of folks looking for jobs,” Barta said.
She said with baby boomers retiring in droves, it's even harder to find workers to replace them.
“I think a lot of folks had continued working longer than they would have normally. With COVID, that did make a lot of them decide, ‘Hey I’m done. I’ve worked long enough, not going to continue to do that.’”
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Census Bureau data shows the U.S. working force population fell slightly in 2020. That's the first decline ever after decades of increases.
And it's not just because of retirements. The decline is also due to a decrease in immigration, slowing birth rates, and thousands of deaths from COVID-19 last year.
Many had to find work-from-home jobs, which really affected the hands-on hospitality and restaurant industry.
Barta said unemployment benefits have also helped keep a lot of parents out of the workforce while homeschooling over the past year.
“I think that has definitely played a hand in allowing people some flexibility that they wouldn’t have had otherwise. And now that it has run out in Texas – and I think 22 other states – then I think we will start seeing a lot more applicants,” she said. “I think it’s just going to take time. I think this fall it will improve. I think schools will be back to normal and parents won’t have to be at home homeschooling.”
Barta also pointed out an increase in the number of people contemplating and acting out on career changes due to the pandemic. According to a recent survey, roughly 2.4 million people are quitting their jobs.
“I think a lot of people have decided they want to rethink what they are doing for employment. I think that work-life balance has become more important to them. I think many folks have had people in their family that were ill or maybe children that had to go to school that they had to homeschool. Maybe they weren’t that happy where they were at in their current or a prior employer," said Barta. “They’re willing to step out there and see what else is available. Many of them even leaving companies before they have another job. We've also seen a lot of new businesses start. Before, they were willing to work an hourly job, but now entrepreneurs are thinking it’s time for me to do what’s best for me and my family."
So what will it take for this shortage to end? Barta says it could take a while for things to balance out.
“It will get better but it’s still going to be a candidates market for quite some time,” she said.
Barta pointed out the silver lining in this situation – it's a job-seekers market.
“We also need employers to be aware of how they are handling when they interview people. How they are under scrutiny. It’s a candidates market,” she said.
Companies are competing to hire and keep employees, so they're willing to pay more and offer bonuses to attract more workers.
“If you’re not negotiating when you’re looking at a new offer, you should be. Because now is probably the best time you’ve ever had the opportunity to do that,” said Barta. “This will probably be the most advantageous time that most candidates will ever have to get the salary that they want and deserve.”
If you're looking for a job, do your homework. Look up the position that you’re applying for and see what the average salaries are. Barta recommends Indeed.com or Salary.com as tools to help you find that information.
"Of course you need to look at years of experience and what other folks are being paid for on the job postings," she said. "In many states, you cannot be asked what your current salary is. Some states you still can. But know your worth, know your value. And always ask if there is a bonus for this position. It does not hurt to ask."
The latest jobs report from the U.S. Labor Department shows average hourly pay has risen by 3.6% compared to last summer.
Barta said as things pick back up, she has seen a 40%t increase in applicants through her staffing firm in just the last three weeks.
“Pretty much through every industry that I’m aware of, the hiring demand is incredibly strong in North Texas. You have to think about all of the companies that have moved here over the last two years. We’ve added a lot of additional companies,” she said. “Our demand is twice as much as it was before COVID. And that speaks to the labor shortage.”
