The JOLTS or Job Openings and Labor Turnover Survey conducted and released by the Labor Department on Nov. 12, 2021 showed that over 4.4 million American workers quit their jobs in September. A record number of American workers quit their jobs, signalling continued a tight labor market putting pressure on businesses to boost wages for attracting and retaining staff. This so-called “quits rate,” reflecting worker confidence in finding better jobs, increased to a record high of 3%. The voluntary separation data reveals continuing labor market tightening and growing negotiating power of workers. Many employers will have to raise wages and improve working conditions, and provide more flexibility, to attract and retain workers.
This is an opportune time for people to be employed when demand for workers is high. For many employers, the struggle continues as businesses report difficulties in attracting workers, boosting wages, and offering perks for badly needed staff. The National Federation of Independent Business reported 44% of small-business owners have boosted wages to attract and retain staff. Small businesses lack workers for unfilled positions and inventory shortages will continue during the holiday season. Average hourly earnings rose 4.9% in 2021 through October but due to inflation, wages contracted by 1.3% in real terms.
Hiring Woes Continue
When reopening from mandatory COVID closures, senior executives didn’t count on people using up time by going through the motions, applying for a job, getting a job offer and then opting out. Even before the lockdown, hiring people was a major challenge due to non-availability of construction workers. COVID made it worse. Hiring woes are now not limited to the construction industry. In the past, restaurants would get four people to respond after calling 10 applicants. Today, they call 100 people and just two applicants respond and only one actually turns up at the interview. Problems are not limited to the hiring stage. Retention is important for other industries ranging from construction to small mom-and-pop businesses. With strong market competition, workers have many options to choose from. Though construction projects have employees working on-site from the beginning, most average two to three months, as employees get poached by rival projects offering extra incentives , like additional training and certifications. Besides unemployed people receiving welfare benefits, people working minimum wage jobs or not earning living wages, receive SNAP benefits and Medicaid.
Americans are quitting their jobs in record numbers since the pandemic started. What’s fuelling the crisis? Many employers were not taking any precautions and workers with health problems were resigning and the pandemic triggered a continuing employee exodus as people quit jobs in record numbers. In June 2021 alone, 3.9 million workers quit their jobs across the nation, just down slightly from the all-time record of 4 million from back in April, according to the Bureau. Meanwhile, the number of open jobs increased by 590,000 to a big high of 10.1 million ready-to-fill positions. The change of the power dynamic shifting to the side of labor is confirmed as businesses scramble over a pool of workers, in no hurry to return to old jobs. We face a labor shortage in this country as businesses struggle to find labour to fulfill their needs and growth, besides retaining their ability to make products and serve customers.