Demand for workers this Labor Day drive companies to raise wages, add flexibility
ATLANTA — Monday was an unusual Labor Day. Workers are in demand but relatively scarce, enticed by incentives but scared of infection, constrained by childcare needs, while attracted by a more elastic workplace.
And while there are worries that the latest wave of the coronavirus will undercut the jobs expansion, at least for the moment, hiring is healthy, giving workers more choices and more leverage than they have had in quite a while.
“There is a talent scarcity,” said Anjanette Johnson, Atlanta-based area director at Randstad US, a staffing firm. “It’s just hard to find talent. And because of that, companies have to be much more flexible.”
Eighteen months into the pandemic, financial disparities between the lower echelons and top executives are still enormous, and many full-time workers do not make enough to afford median rents in some metro areas.
But after hearing how essential they were when so many white-collar employees were stuck at home, front-line workers are seeing more generous benefits and pay, more options on hours and fewer requirements.
CVS, the national drug store chain, announced last month it would no longer require a high school degree for entry-level positions. Amazon said it has stopped testing job seekers for marijuana.
Many companies are leaning into hybrid work arrangements — in the office sometimes, at home others — while offering more malleable hours and dangling bonuses and higher starting pay for lower-wage jobs.
In call centers, where clerks often make $11 to $13 an hour, the pay is up $1 to $2 an hour, Johnson said. “Pay rates have to go up. It’s a tight market.”
A number of big companies — Target,
Walgreens, Walmart and CVS, too — have declared $15 per hour their new base, which pressures others to raise their own pay.
In July, wages nationally were up an average of 3.7% from a year earlier, making it one of the five strongest months in more than a decade, according to the Atlanta Federal Reserve. People who switched jobs did even better, averaging a 4.4% raise, said the Fed.
Pay hikes have been most pronounced at the lower-wage end of the labor market. Many of those jobs are front-line work, placing employees in harm’s way.
Forty-two percent of U.S. workers are worried about returning to the workplace for fear of contracting COVID-19, according to an August survey by the Conference Board. In June, before the latest surge in cases, only 24% said they had that worry.
But in white-collar work, too, flexibility has become a crucial perk in luring new employees, said Tara Flickinger, a partner at ON Partners, an executive recruiting firm.
It’s not just the ability to work from home or to juggle childcare, she said.
“I don’t think that the office as we knew it or the workday as we knew it will ever go back to the way it was before the pandemic,” she said. “A lot of companies are not even requiring relocation, because the companies offering the most flexibility will get the best talent.”
More than one-third of workers in the Conference Board survey said they might leave their jobs within the next six months in search of more flexible work arrangements. Those taking the survey put flexible work as their top priority, slightly ahead of better pay.
Child care shortages and uncertainty over in-person schooling are a big factor. Women with very young children made up 10% of the prepandemic workforce, but accounted for nearly 25% of COVID-related job losses, according to M. Melinda Pitts, director of the Center for Human Capital Studies at the Atlanta Fed.