As life in the United States returns to something like it was, many companies face an unanticipated problem—they cannot hire the labor they require.
As a result, even though there are millions of unemployed people, there are still 8.1 million job openings. Restaurants, warehouses, manufacturing, and the service sector are all affected by this problem, which is concentrated among America’s low-wage population.
It had never been simple to get a waitressing or bartending job at the Lost Dog Cafe in Northern Virginia. “Help Wanted” signs were rare, and half of the chain’s employees stayed for at least ten years. When the epidemic hit, Lost Dog had to shut down indoor dining temporarily; any chance of getting a job there became harder.
However, when vaccinated customers returned to eat out, and once-loyal employees went on to new possibilities, the restaurant began to struggle to fill the roughly 20% of vacancies on its service team in May.
To solve the issue, it did something it had never done before: it turned to people who had never worked before. It also began hiring individuals under the age of 18.
In a desperate search for workers, Lost Dog is one of a rising number of firms that are relaxing limits on anything from age to experience.
CVS said earlier this month that it would no longer demand a high school diploma to fill entry-level positions at its shops. When it recruits on college campuses this year, it also wants to eliminate the 3.0 GPA criterion.
Amazon, on the other hand, has ceased evaluating job applicants for marijuana use.
Even though many firms grumbled that they couldn’t locate all the needed personnel, the revised criteria may have aided recruiting this summer. In both June and July, employers added a total of 940,000 jobs, bringing the unemployment rate down to 5.4%.
The government will report August employment data on Friday, and experts expect them to indicate that another 750,000 jobs were gained in that month, bringing unemployment down to 5.2%.
However, because of the delta variation, some experts are concerned that job growth would be smaller but are bullish about hiring in the autumn.
When the job market began to tighten three years ago, the tendency to loosen the regulations started. It picked up speed this spring when employers were taken off guard as Americans eagerly emerged from months of epidemic lockdowns, ready to buy and dine once again.
Workers were reevaluating their employment simultaneously, deciding if the long hours were worth the compensation.
The perfect storm resulted in a record number of job vacancies, which climbed by 6.5% to 10.1 million in June from 9.2 million in May, the highest level since the Labor Department began collecting the statistics two decades ago. In addition, the number of people voluntarily quitting their employment climbed to 3.9 million in June, up from 3.6 million in May.
Employers offered enticements such as higher hourly salaries and bonuses, but they still had difficulties filling positions. However, according to various sources, they are now more ready to relax some rules that previously kept particular groups out of the labor market.
ZipRecruiter sifts through 16 million job ads across all industries. They found the number of positions needing a bachelor’s degree has dropped from almost 15% in 2016 to just over 11% in 2020. However, between January and June of this year, that percentage plummeted to only 7%.
“We expect the jobs report to show that the economy continued to add jobs at a rapid pace in August, defying COVID-19 Delta variant outbreaks across the country,” said Julia Pollak, chief economist at ZipRecruiter.
The number of job postings requiring no experience increased from 9.2% in 2016 to 14.3% in 2020 and then rose to 18.6% in the first half of this year.
Many of the limitations, according to experts, were erected to keep low-wage employees, particularly people of color, out.
For example, education requirements benefit white workers over black ones. According to the Educational Trust, an educational charity, just 30.8% of Black people have received a college degree, compared to 47.1% of white individuals.
According to Delta Air Lines, 95% of customer service positions no longer require a four-year college diploma, up from 78% in the first quarter of 2020.
According to Ashley Black, Delta’s director of equity initiatives, the move was made to locate the best people for the role and the company, not because of any labor constraints. “Traditional hiring processes are highly subjective and can have multiple barriers that complicate access to economic opportunities for any potential talent.” Black added, “this disproportionally impacts people of color. Without being able to easily and credibly assess skills, implicit bias can shape the recruiting and hiring processes.”
According to Sarah White, area manager for Lost Dog Cafe and a restaurant consultant, the reduced standards have opened doors for employment to prospects who would not have been considered previously.
White explained, “We get locked in these ideas of what the job looks like,” adding, “Now, we are getting people we wouldn’t have hired before. And they have been some of the most amazing employees. It would have been our loss.”
In September, Karen Rosa, 32, began her career as a server at the Lost Dog Cafe but quickly advanced to bartending despite having no prior experience. She claims she can now make a consistent $600 to $700 each week. Her server’s revenue, she claims, was more unpredictable.
She stated, “They gave me a chance. … They were very helpful.”
However, there are drawbacks. White claims she’s forced to hire servers with terrible attitudes that have scared away clients.
“We don’t have someone to wait on them,” she explained, “but we are also losing them because they get service but it’s from someone that I wouldn’t want serving them.”
According to Daniel Schneider, a public policy expert at Harvard Kennedy School, the difficulty in recruiting excellent employees like waiters underlines “a myth” that this is not specialized labor.
He stated, “Not just anyone can step into these roles. … These are skilled jobs, and they should be compensated accordingly.”
Companies claim that they are compensating for lack of experience by improving training. Every day, Lost Dog chefs are trained on various menu items, and cocktail recipes are posted on the back of the bar rail, where customers cannot see them.
In addition, CVS recently established two new workforce innovation and talent centers in Pittsburgh and Philadelphia. It collaborates with faith-based and community organizations to recruit, train, and place pharmacy technicians and customer support, representatives.
Nobody knows if firms will resume tightening standards once they are inundated with job applications.
According to Brad Hershbein, senior economist and communications advisor at the W.E. Upjohn Institute for Employment Research, employers may still provide leniency on academic qualifications. Still, desperate measures such as employing individuals with terrible attitudes will be phased out.
“Employers may decide there are other ways of actually screening employees that are more effective than looking at key words on their resume or do they pass this education or experience requirement,” Hershbein remarked.