As mentioned in our first post on this topic, it’s evident that the American workforce looks quite different today than it did just 18 months ago. Employee behaviors, service impacts, and corporate economic difficulties are highly relevant when assessing the current state of the workforce.
Some of the most significant changes in the workforce have to do with employee behaviors. Predominantly, employees are seeking higher wages, better benefit packages, flexible hours, remote work opportunities, and child care accommodations.
The current Labor Force Participation Rate, which measures the economy’s active workforce, sits at 61.7 percent. This is 1.6 percent lower than the recorded rate in February 2020. Though this number has been declining for the past 20 years, the pandemic set off a surge of Americans choosing unemployment insurance over working full-time.
Another statistic to keep an eye on is the quits rate. The rate is also high, currently at 2.7 percent, and is driven by employees that voluntarily leave their positions. Roughly 52-90 percent of employees plan to job search and the employees who quit have a high sense of confidence that they will find new employment.
It was also recorded that a shocking amount of American workers between the ages of 57 and 75 decided to retire in 2020. Historically, the average is 3 million workers each year, but in 2020, there were an additional 3.2 million who decided to stop working.
There are approximately 10.9 million job openings currently in the U.S., and the supply chain is being seriously impacted as a result. If you’ve visited a restaurant recently and experienced long wait times or poor service, then you’ve seen first-hand how the workforce is being affected. The lack of employee retention in restaurants has led to reduced hours of operation, limited menu items, and unavailability of reservations. Several local restaurants and conglomerate franchises have been affected, meaning restaurants on a small and large scale are at risk.
The travel industry has also been significantly affected by the shift in the workforce. Travelers have been experiencing long wait lines due to a lack of TSA screeners, putting a great deal of strain on airport visitors. The hospitality industry is also suffering due to a lack of staffing. Hotel rooms aren’t being as well-kept because there are not enough employees to complete daily room cleaning. The same can be said of several other industries as well including retail and transportation.
Because of the high unemployment rate, employers are beginning to see changes in their economic values. The wage pressures that corporations are experiencing are calling for higher starting wages for entry or mid-level skillsets. A majority of employees are looking for starting wages of $20/hour or more with no background or drug screening. This puts employers at a disadvantage, especially when you consider the high costs of employee turnover which is already at an all-time high.
Not only are companies faced with having to pay higher wages for employee retention, but many are also having to reduce the number of sales they make to accommodate for fulfillment deficiencies.
Working with a professional workforce administration company, like The Applied Companies, can help set your company up for success. TAC has been part of the Reno community since 2002 and prides itself on thoughtful solutions and authentic relationships.
Our Reno staffing solutions help employers in need of a professional, reliable, and ambitious workforce. We work to provide you with quality candidates to help you grow your business and decrease turnover to save you time and money. Connect with us today for help growing your team.