Employers face challenges to pick up where they left off

With so many workers on the sidelines, incentives are becoming more prevalent.
162
David Robb estimates approximately 30,000 people have left the labor force in West Michigan over the past year.
Courtesy Nic Dampier

As more and more employers reopen their workplaces after the pandemic forced them to make adjustments, they are missing one thing: employees.

David Robb, director of operations for Express Employment Professionals, said right now is the slowest time he has ever seen for applications and job-seeking activity.

“That is not just what we see at Express Employment Professionals, but it is also what we hear from clients and what we see across the board with the different analytics we monitor on job boards and things like that,” Robb said. “Even pre-COVID, we had a very tight labor market in West Michigan and had unemployment around 3%, but it is more challenging right now to recruit people who were employed pre-pandemic.”

At the height of the pandemic, the unemployment rate rose from around 3% to 23.6% in April 2020, according to the U.S. Bureau of Labor Statistics. The unemployment rate dropped to 8.5% in August and hovered around 8% until January, when it declined to 5.7%. The latest preliminary unemployment rate in the state is 5.1%.

Grand Rapids-Wyoming’s unemployment rate in March was 4.7%, per the latest preliminary U.S. Bureau of Labor Statistics data. The unemployment rate reached its highest during the pandemic in April 2020, when it peaked at 21%. Since August, the region has been recovering much faster than the state and the nation as the unemployment rate locally ranged from 5.9% to 4.7%.

Robb credits West Michigan’s manufacturing industry for keeping the region’s unemployment lower than the state and nation because it varies in services such as automotive, medical, food and agriculture.

Despite the drop, most employers in West Michigan are searching for their next employee. Robb points to numerous factors that have resulted in fewer individuals entering the job market in search for jobs as the U.S. begins to open its economy.

“(Some reasons) are people are receiving unemployment benefits and it is hard for them to come off of unemployment, maybe because of extra federal money, as well as some people still have safety concerns, so those are the people that it is difficult for them to come back to the workforce.

“Another factor that we see making a big impact is that a lot of people have left the labor force. Looking at the stats, close to around 30,000 people in the Grand Rapids area are no longer in the labor force compared to last year, meaning they aren’t currently working, they are not on unemployment benefits and they are not looking for work,” Robb said. “They just left the labor force and are sitting on the sideline, so there are just less workers to work with than a year ago, which has caused a strong hiring demand.”

Robb said some people have left the labor force because they were close to retirement, so they decided to stop working, but he said what they’ve also noticed is that there is a huge difference in the gender participation statistics in the labor force.

“There are less women in the workplace and in the labor market,” he said. “A lot of it has to do with child care issues over the last year — schooling changes. Virtual schooling definitely impacted women a lot, so they have left the workforce for various reasons and haven’t returned yet.”

In an effort to get people back in the workplace, many companies are offering various new incentives to lure people back to work.

“Companies are getting more creative than they have ever been before, to be honest,” he said. “The first thing that we’ve seen is wages going up quite a bit, so there has really been significant compensation, especially for industrial positions, (and) more entry level positions. We have seen entry-level wages increase 10% to 20% over the last year.

“It is really significant as employers try to compete. We are seeing other things like retention bonuses so maybe you get a $500 bonus or $1,000 bonus after 90 days or six months,” he said. “We are seeing things like attendance bonuses as well. There is just a lot of different things companies are trying to do right now.

Robb said companies are hiring in multiple categories such as human resources, IT and administrative support.

“It is kind of across the board. One of the areas that was the slowest for a long time was more administrative office positions like clerical positions,” he said. “Those are really starting to see a resurgence now as more and more employers are going back to the office because they will need that office support again.”

Facebook Comments