Labor shortage emerges as major issue for employers
What a difference a year makes. As Washington emerges from the pandemic, one of the biggest challenges facing many employers is finding enough qualified workers.
It’s a dramatic shift from a year ago, when businesses were forced to close their doors to slow the spread of the virus, leading to an unprecedented surge in unemployment.
Today, most Covid-19 business restrictions are lifted, and the economy is beginning to recover from the pandemic. In nearly every community, “Help Wanted” signs are common in store windows and more employers across more industries are offering signing bonuses today than we’ve ever seen.
Compared to the challenges we faced a year ago, it’s a good problem to have. But unless something is done to address the escalating workforce crisis, it will be a drag on long-term economic recovery.
A lack of skilled and qualified workers was a big issue for many employers prior to the pandemic. The pandemic has exposed and magnified the issue, as it has so many others.
According to the state Department of Commerce recovery dashboard, weekly job postings increased sharply in Washington after the first of the year, reversing the steep declines that began in March 2020. Restaurants, hotels, trucking companies and other employers report they can’t find enough people to fill all the openings.
There are multiple factors at play, including enhanced unemployment benefits, lack of child care and health concerns. The return of the job-search requirement this month for those receiving unemployment benefits will likely help, but not solve the state’s workforce challenges.
An important long-term solution is to connect young people with real-world, work-based learning opportunities that will prepare them for high-growth careers. The Washington Workforce Portal, a project of the AWB Institute, is doing just that in two pilot efforts underway in Spokane and the Tri-Cities.
The Association of Washington Business will explore these issues and more at the upcoming Workforce Summit, as well as potential solutions. The hybrid in-person and online event is July 21 at the Greater Tacoma Convention Center.
The workforce shortage is a nationwide challenge. The U.S. Chamber of Commerce recently launched a nationwide initiative called America Works that’s aimed at mobilizing industry and government to address the growing worker shortage crisis throughout the country.
New surveys and data show there are now half as many available workers for every open job across the country (1.4 available workers per opening) as compared to the historical average over the last 20 years (2.8). In some industries, there are more open jobs than job seekers.
The issue has gained urgency as vaccine distribution increased, but an AWB survey showed it was already emerging as an issue in April. Nearly 42% of respondents identified a lack of qualified workers as one of the most important issues facing their business.
The America Works agenda identifies several solutions, including immigration reform, expanding employer-led education and training programs and expanding access to child care for working parents.
Since the start of the pandemic, employers have demonstrated a remarkable ability to adapt and innovate. It’s clear the need for those skills isn’t going away even after it fades away.
As the economy continues to recover, it’s also clear that we’re in a race for talent. The states and regions with the strongest economies will be the ones with the most skilled and educated workers.
Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.