Businesses hiring – who’s interested?
As companies seek to staff up, some struggling to find candidates
Memphis-area employment continues to recover from the early stages of the COVID-19 pandemic, but firms are working up a sweat to attract enough qualified candidates.
This pursuit hasn’t been easy for some businesses. A Memphis hotel sought the services of Supreme Staffing, which has offices in Memphis and Monroe, New Jersey, because it had zero housekeepers to service its 88 rooms, said COO Marnie Byford.
In February, 56% of small business owners reported hiring or trying to hire, up
five points from January, according to the National Federation of Independent Business. Labor quality was most frequently cited as the top concern among business owners, and 91% of those trying to hire found few, if any, qualified applicants for open positions.
Supreme Staffing works with a range of clients, including those in the hotel, logistics, warehousing and landscaping industries. Byford said she started noticing the drop in those seeking employment when the $1,400 stimulus checks for COVID-19 relief began being deposited in March.
“I think it took us down a good 30%,” she said, referring to Memphis-area job hunters using Supreme Staffing’s services. “… The conversation is, how can we get quality people in and push them to come in and feel they can see beyond the current moment of the money?”
Other staffing company executives are raising the same concerns, but how many potential employees are staying on the sidelines overall due to the latest stimulus is unclear.
Expanded unemployment benefits instituted amid the COVID-19 pandemic have also been flagged as a job deterrent. Last year, multiple studies suggested this strengthened safety net didn’t lead people to stop looking for work.
Yale economists, using data from a business scheduling and timesheet software company, found no evidence that the boost to unemployment insurance encouraged layoffs or deterred people from returning to work, according to a July Yalenews article. A Franklin Templeton-gallup Economics survey also found no evidence that enhanced unemployment benefits would slow people returning to work.
Sonal Desai, chief investment officer of Franklin Templeton Fixed Income, wrote that “most workers rationally prefer the greater long-term security of employment to temporary government support, even if the latter exceeds their regular wage income.”
More people return to work, but some holding out
Memphis’ unemployment rate has declined since the COVID-19 pandemic’s early days. In the Memphis metropolitan area, the unemployment rate was 7% in January, versus 13.1% in July 2020.
That rate is still higher than pre-pandemic levels. In January, 44,889 people were considered unemployed in the Memphis metropolitan area, versus 28,233 in January 2020.
John Gnuschke, president of economic research firm 901 Economics, said as the local demand for workers remains high, attention has shifted to the available talent pool. He said it’s hard to quantify the amount of people who are staying unemployed strictly due to the expanded benefits or stimulus checks, but he added that it’s likely only a small portion of people.
The National Federation of Independent Business said in its monthly jobs report that “significant populations of otherwise working adults” are staying home to take care of family, protect themselves from COVID-19 or because they may not be able to transition to available jobs. The labor force participation was 61.4% in February, 1.9 percentage points lower than in February 2020.
Many employers are increasing hourly wages to attract more workers, Gnushcke said, as the COVID-19 relief bill signed in March expected to boost demand for goods and services. The Memphis area’s average hourly wage is $3.91 lower than the U.S. average, per the Bureau’s most recently available data.
“Given the choice, most people work,” he said. “Now, with a stronger economy, I think we’re going to see more job opportunities and higher wages.”
Candidate search continues in logistics, other sectors
Attracting — and keeping — enough employees has become a heightened concern over the past year.
Fedex Express, which employs thousands at its World Hub in Memphis, is increasing pay an additional $2 an hour for hundreds of nightside hub employees via a “Pay Premium” program. It’s the latest example of Fedex sweetening the dealfor frontline workers as volume surges during the pandemic.
Beyond Fedex, there are plenty of logistics and manufacturing job openings in Memphis, said Michelle Brown, vice president and market lead for professional and industrial jobs at Kelly Services. The staffing company has 400 open positions they are hiring for in the city, Brown said, 100 of those being for medical device manufacturer Smith+nephew.
On April 1, Kelly held a Memphis job fair for local warehouse positions at Smith+nephew, advertising full-time positions paying $15 to $15.55 an hour. Only around a dozen potential employees showed up by early afternoon.
Byford said the combination of heightened unemployment benefits during the pandemic, stimulus checks and tax refunds has hurt the market of available workers. She expects to see demand returning by May as short-term stimulus check spenders use up the funds.
The large majority (87.6%) of adults in households with incomes less than $25,000 spent the $1,200 stimulus check from last year on daily essentials like food, rent and utilities, per a U.S. Census Bureau survey.
Fewer people have replied to Kelly’s online job postings since the introduction of the most recent stimulus check, Brown said.
She said the check or other factors could be changing candidates’ mindsets, bringing up reasons similar to what the National Federation of Independent Business said.
“In the past, a candidate would look for a job that paid based on what that skillset was,” Brown said. “Now, candidates are really basing what the pay they’ll accept and what job they’ll accept based on if it’s worth them actually coming to work or going to work each day.”
The city of Memphis and Shelby County have a particularly heightened need for more workers in the short-term as they continue to respond to the COVID-19 pandemic, said Ken Harris, COO and CFO at nemarc Professional Services, a Memphis-based staffing agency.
Harris said stimulus checks and expanded unemployment benefits can have an impact on people keeping a new job. Recent hires have had higher-thannormal rates of absenteeism, and some stop showing up to work after a few weeks, he said.
But Harris also pointed to the ongoing risk of catching COVID-19 as deterring some people from returning to the workforce. As more people get vaccinated and the threat of the pandemic subsides, that should become less of an issue, he said.