The New and Changing War for Talent in Our Post-COVID World
The moment restaurant owners have been waiting for has finally arrived. COVID numbers are down, and social distancing restrictions are being lifted across the country. As a result, it seems like people are ready to get back out in the world and enjoy life again. High on the list of things people are eager to do is dine out. That’s music to the ears of restaurateurs, still reeling from the tremendous revenue losses they experienced during the pandemic.
Still, there’s one big hurdle standing in the way of this industry’s return to normal, and that’s a labor shortage. Many restaurants are still operating under pandemic restrictions, despite relaxed protocols, simply because they don’t have the staff to gear back up to full-service operations.
And restaurants aren’t the only businesses affected. Erin Tiernan told NPR she has advertised as far away as Utah and West Virginia in an effort to staff her two stores and her husband’s hotel in Martha’s Vineyard, Massachusetts. She’s even offering subsidized housing to sweeten the deal. Nevertheless, the hotel, which is fully booked and typically employs 10 people, currently has one employee—Tiernan’s husband.
According to Forbes, the U.S. Bureau of Labor Statistics reported an all-time high of 8.1 million job openings in March 2021, a 43% increase from March 2020, when COVID shutdowns began. In addition to the service industry, the employee shortage has severely impacted the transportation, communication, public utilities, construction and manufacturing industries.
So, what happened? Where did the labor pool go? Some economists blame the federal government’s employment benefits program, which was expanded and enhanced during the pandemic. “You have some cases where it’s more profitable to not work than to work, and you can’t really fault people for wanting to hold on to that as long as possible,” chef Jeremy Fox, who owns three restaurants in Santa Monica, California, told the New York Times.
Recent figures bear out the veracity of Fox’ statement. According to the Society for Human Resource Management (SHRM), 11.7 million people have applied for emergency unemployment aid. (This number includes Pandemic Emergency Unemployment Compensation and Pandemic Unemployment Assistance for the self-employed.) The programs are slated to expire in September, but more than 20 states say they intend to cut off access to federal programs in June in hopes it will prompt recipients to return to work.
Other factors are contributing to the labor shortage. Some blame the minimum wage, which varies by state but remains $7.25 in 20 states. According to The Atlantic, the U.S. pays the lowest amount of any country in the Organization of Economic Cooperation and Development. Instead of encouraging the unemployed to stay on the dole, Atlantic staff writer Anne Lowrey suggests the government’s emergency aid has given workers the financial cushion needed to seek out better jobs instead of taking one out of desperation.
Employers are also taking steps to improve their situation. In an effort to combat labor shortages, CNN reported several major corporations, including Amazon, McDonald’s, Walmart, Costco, Chipotle, and Bank of America, have announced plans to increase their hourly pay rates. Some employers, including Amazon, have even begun offering signing bonuses to lure prospective staff members to join their teams.
Timing is another factor contributing to the employee shortage. With so many businesses ramping up at the same time after the pandemic, competition for talent has become stiff among employers. Restaurateur Hugh Acheson, in charge of food and beverage at the new Hotel Effie Sandestin in Miramar Beach, Florida, told the New York Times in February there were more than 300 ads seeking line cooks in the area on one job site.
The pandemic’s impact on lifestyle changes also can’t be underestimated, particularly on the service industry. When businesses shut down and curtailed operations, many big-city transplants moved back home or elsewhere to get jobs in their new locations. According to the Times at least 80% of the kitchen staff for Crafted Hospitality, which operates restaurants for Tom Colicchio of “Top Chef” fame, have left New York City. Perhaps permanently.
It should also be noted some workers displaced by the pandemic used the new downtime to advance their education, enabling them to change careers. To this end, a Pew Research Center survey found 66% of unemployed workers had “seriously considered” changing their line of work.
In spite of so many changes and unprecedented uncertainty, hope lingers on the horizon. According to SHRM, 444,000 workers filed for new unemployment benefits in mid-May, the lowest level since the pandemic began in March 2020. Although claims still remain high, they have dipped significantly in recent months.
Even better, some experts believe the current labor shortage will be a fleeting blip on our road to recovery as people transition from pandemic mode to regular life, according to the Washington Post. As more restrictions lift and children return to school and childcare fulltime, here’s hoping the labor shortage will indeed become a faint memory—like face masks and lockdown orders.
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Even before this pandemic began, I was speaking about the complexities surrounding the war for talent in tomorrow’s organizations. As a leadership, compensation, and company culture consultant for companies in many industries, I have helped my corporate clients manage the people issue—even in the automation age.
To learn more about my philosophy and approach, please read my recent profile in Forbes. And if you are seeking ways to attract great staff and be an employer of choice, please contact me at laura@conoverconsulting.com. I would be more than happy to help you to navigate these unusual times.