Memphis businesses are hiring. Is there enough interest?
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.”