Written by Edward Smith
It was mid-March when Hire Up Staffing Services sent its top salespeople to Las Vegas to celebrate the biggest week they had in the history of their company. They had found positions for more workers than ever before in what was then a “candidate’s market,” according to Rebecca Kirkman, president of Hire Up.
At that time, employers were raising wages and benefits to persuade those in a shrinking labor market to take up or change jobs.
Fewer than five days after the celebrations, more than 200 people Hire Up had located jobs for had lost them or were furloughed because of shelter-in-place orders.
Across the nation, employers laid off 11.4 million workers in March.
And now as businesses to open back up, despite spikes in unemployment, Kirkman hesitates to call it an employer’s market.
Businesses are finding they are having to compete with generous unemployment benefits and fears of infection to get workers hired.
For those not going back to work, there are a number of people worried about contracting COVID-19 or who are caring for people with the disease or children out of school. But Kirkman feels a majority of people are finding unemployment pays better than their jobs did. Kirkman did the calculations, and for workers earning $13 an hour, they might be making closer to $22 an hour. Reimbursements from the State of California begin at 55% of their last month’s paycheck. But with an additional $600 a week, benefits could pay out over $4,000 a month for people who were making half of that only a month ago.
“They are making more money with all of the government incentives they are getting not working,” said Kirkman.
At Hire Up, Kirkman saw candidate pools shrink to 40% of what they were at their peak. But she thinks the worst is behind us.
Hiring is beginning to pick up. Demand for labor dropped 80% according to Kathy Bray, president of Denham Resources, a Fresno-based staffing agency. Two weeks ago, food processors and growers brought that demand up 20%.
Beyond shrinking candidate pools, finding quality workers has also been difficult.
In trying to fill two positions at a hospital in the Stockton area, Kirkman said the hospital went through nine qualified candidates, with seven of them declining the job offer. Of the final two, one candidate changed their mind the day before accepting the job and the other didn’t show.
They had to expand screening methods to add more scrutiny before the positions were filled in the second round. And staffing services are often better equipped to vet potential candidates than direct hires from employers.
“This is what we do all day long, this is everything of what we do, I can’t imagine what an office manager is going through right now when this is only an occasional task that they need to handle,” said Kirkman.
At La Tapatia, entry level positions have been difficult to fill, said Yvette Cuellar, director of marketing for the Fresno-based tortilla company.
The need to fill positions has impacted production. They’ve had to shuffle workers around different departments to fill the one or two missing positions a day. Several applicants have “ghosted” virtual interviews the human resources department has scheduled.
In the restaurant industry, staff has been reduced to skeleton crews because revenues are so thin. “With the staff that’s there, you’ve really got to rely heavily on those people to come to work because if anything happens — one of them becomes sick, one of them gets into a car accident, one of them has a workplace injury — you’re left with nothing to replace those positions,” said Lewis Everk, owner of Everk Hospitality Group.
Everk called former employees to come in for a time when one his managers had to get stitches. When no one was willing to come off of unemployment, he had to close his restaurant, Vyxn, for two nights. It can take $1,000 to train a new person in the restaurant industry, said Everk. “The economics don’t make sense.”
Employees who refuse to go back to work can lose unemployment coverage.
Competing for workers will be different than in the past. At the beginning of the crisis, candidates often asked about positions offering remote work. Since then, that request has dwindled. Businesses may not have to be as competitive as they were before the crisis when it comes to pay and benefits, said Kirkman. But they should be mindful of employee health.
She’s been a little more aware of her employee’s personal lives. She knows who has kids and who needs daycare. They’ve allowed kids to come in and even given them computers to do homework.
“I think people appreciate that I’m taking an interest in their life,” said Kirkman.