Help wanted signs scream out of windows and banners promising sign-on bonuses flap in the wind along U.S. 31 in Johnson County.
Many people associate the labor shortage with increased federal unemployment benefits, but it is much more complicated than that, local employment experts say.
The coronavirus pandemic forced 1.7 million older workers to retire early, and left younger workers with more options in a wide open job market. The surplus of jobs is due to a skills difference between job openings and job seekers, and the evolving desires of Millennial and Gen Z job seekers.
“We have too much work and not enough people,” said Mike Heffner, owner of Express Employment Professionals Indy South. “There’s multiple problems right now that were sped up because of COVID. These are not problems that didn’t already exist, but when COVID came, it sped it up and created a tsunami we are seeing.”
The shortage has driven employers to change their business models, or loosen hiring practices to attract the workforce they need.
Businesses change models
When no one applied for open cook jobs at Ann’s in downtown Franklin, the restaurant decided to close on Saturdays, a day that was traditionally busy and brought in significant revenue.
Ann’s owners Diana Wilson and Theresa Matthews sacrificed Saturday business for the good of customers and their employees. The restaurant also eliminated outdoor seating, upstairs seating and reduced the downstairs capacity to relieve strain on staff, Wilson said.
A family-owned restaurant for 60 years, they want customers to get the level of service they deserve. When the restaurant returned to full capacity, customers came in droves, but the cooks the restaurant was able to retain couldn’t keep up with the high volume of orders, Wilson said.
“We are literally doing the best we can,” she said. “That’s why I wanted to make sure that when you get in here, you have fresh, good food in a timely manner.”
By closing on Saturdays, the restaurant has been able to attract cooks who left the workforce because they were fed up with demanding, unpredictable schedules. The restaurant also increased its wages, pays more for experience and promises periodic evaluations with performance raises, Wilson said.
“I think the labor pool is smaller now, but I don’t know exactly why. We have all of the restaurants in Johnson County competing for a small number of kitchen staff,” she said.
Since making those changes, the cook staff is back up to where it needs to be, and the restaurant is hoping to add more seating in the coming weeks. But the restaurant will remain closed on Saturdays, Wilson said.
Ann’s owners noticed a trend among applicants that the lifestyle a company can offer is more important than ever, she said.
“They certainly seem to not be willing to go back into the labor force unless whatever is important to them is met. What that means, I’m not sure,” Wilson said. “All I can do is offer competitive wages and offer a lifestyle that no other one-shift restaurant can offer.”
Retirees create hole
The restaurant industry is not the only one noticing that trend. The pandemic left wide gaps in the workforce that are tough to fill with no changes to the way businesses operate, local recruiters say.
Most of Johnson County’s eligible workforce is employed right now. The June unemployment rate — the most recent available — was 3.5%. Nearly 80,900 Johnson County residents had jobs, while about 3,000 members of the eligible workforce did not.
Undoubtedly, some are choosing to stay home as federal unemployment benefits continue to roll in. But the differences between what workers want and what employers are offering has led job seekers to be more picky about where they work, local recruiters say.
The widest gulf in the market was left by retired people. Because so many older workers retired at once, there is a gap between the available workforce and the amount of job openings in the county, said Cindy Burger, a regional manager for First Call Staffing.
“This is a whole new generation of Baby Boomers who retired during the pandemic so most of our workforce out there now is Millennials. There is a lack of workers,” Burger said.
There are fewer young people available for work because the population replacement rate continues to decrease. The birth rate has fallen continuously for about a decade, so the workforce issue is likely to persist, Heffner said.
Skills gap widens
Another area that is exacerbating the labor shortage is a difference between the skills employers demand and the skills the eligible workforce has, local recruiters said.
With decades of knowledge leaving the workforce, fewer experienced candidates are available, so employers are learning they have to be more open to on-the-job training, recruiters said.
Instead of hiring people with five years of experience, employers are increasingly having to give a recent college graduate a shot. As a result, more employers are committing to help upskill their new hires for the benefit of both parties, Heffner said.
With more young people in the county choosing college over trade schools, there is an especially wide gap for workers with experience in maintenance, PLC troubleshooting, electrical, HVAC and pneumatics, Burger said.
With so many jobs on the market, people apply to many and take the offer that has everything they desire. High wages, benefits, weekends off and good company culture are all high on the job seeker checklist right now, recruiters said.
Low wages detract
The competitive market drove up wages across the country.
In Johnson County, jobs that paid $13 to $15 an hour before the pandemic have risen to $16 to $18 an hour to meet that desire for higher wages. Wage increases occurred in industries where it has been especially hard to recruit workers during the pandemic, including restaurants and retail, Heffner said.
Workers who were part-time before are not necessarily looking for the same kind of job. Some have opted to work for food delivery services — or gig-work — instead of something with a set schedule, he said.
Some families also decided to have one spouse stay at home permanently because they enjoyed that lifestyle during the pandemic. They found that it makes more financial sense to have a spouse stay home rather than pay for childcare, Heffner said.
Still, there is some hope in the market, local recruiters said.
Employers who are willing to innovate are able to attract good candidates and job seekers who are looking to move up can do so more easily because of the options that are out there.
