MNI EXCLUSIVE:US Hiring Dimmed by Skills Mismatch, Covid Worry

Companies are having a harder time hiring as laid-off service workers lack the skills needed in the more stable goods-producing sector, while fear of contracting Covid-19 deters people from searching for work, recruiters and industry experts told MNI.

Employers through October struggled to fill available positions or attract applicants, even with a lot of people still out of work, said Mike Brady, who owns a staffing company in Jacksonville, Florida. "For us, there's definitely more job openings than there are people to fill them," he said.

Brady adopted creative tactics to attract workers, like drive-thru and contactless job fairs, but "it's still a struggle to fill the open job orders that we have." That likely stems from a recent surge in Covid-19 case counts, which has amplified fears of contracting the virus in the workplace, he said.

Companies are also stepping up their wage offers. Brady said firms with jobs that recently paid USD10 an hour are now struggling to find people at USD12, and light industrial job wages have jumped about a dollar to USD15, versus a typical annual raise of 30-40 cents, he said.

Still, the U.S. last week set a record for new infections, reporting nearly 133,000 in a single day. The nation's case count stood at 10.1 million as of Tuesday morning while total infections topped 50 million, according to Johns Hopkins University.

SKILLS SHIFT NEEDED

"People are afraid to go into the workplace" for jobs that cannot be done remotely, said Tom Gimbel, founder and CEO of the LaSalle Network, a staffing firm in Chicago. "I have clients all over the Midwest that have open warehouse jobs, both skilled and unskilled, where they can't find people to take the jobs."

Most available jobs continue to be in sectors like warehousing and transportation that have benefited from a boom in online shopping, Brady said.

"Those industries haven't slowed down much, a lot of them have actually picked up and are hiring," he said. "We've had a lot of people transition from the hospitality industry to commercial light industrial."

Average hourly earnings of private production and nonsupervisory employees rose 0.2% in October and were up 4.5% from a year earlier, the BLS reported last week. Meanwhile, hourly earnings of services workers were also up 0.2% through October, though that metric has been warped by low-wage job loss.

Workers in hard-hit service industries often lack skills needed for construction or manufacturing where jobs are relatively plentiful, said Bill Dunkelberg, chief economist at the National Federation of Independent Business.

BENEFITS WITHOUT JOBS

"An electrician, plumber, welder -- those kinds of skills you don't just 'have'," he said. "Any of us can qualify to be a waiter and handle a retail store and run a cash register, but, in construction, a lot of the job openings do require training and a certain skill set."

Nearly 90% of small business owners report few or no qualified applicants for available jobs, according to NFIB's October jobs report. Roughly 35% of construction firms reported finding qualified labor was their top business problem in October.

"This is the big paradox: we have 21 million Americans that are getting some form of unemployment insurance and yet you have 460,000 job openings in manufacturing," said Chad Moutray, chief economist at the National Association of Manufacturers in Washington.

More than half of members in the group's third quarter outlook survey said they were having trouble finding talent. That's likely due to a skills gap between services jobs and positions in manufacturing or construction, though retraining efforts are already afoot, Moutray said.

Experts have also told MNI the skills gap may worsen as long-term unemployment turns into "scarring" that makes some workers much harder to pull back into the workforce. The Fed has adjusted its long-term goals to emphasize bringing the economy back to full employment, while saying fiscal stimulus is a more powerful tool. One reason Senate Republicans have resisted a second major unemployment benefits top-up is a worry it will discourage people from seeking work.

EMPLOYERS MORE FLEXIBLE

Manufacturing payrolls rose by 38,000 in October, but are still down 621,000 from February, the BLS reported last week. The construction industry added 84,000 jobs in October, though employment is still down 294,000 from February.

Employment offers with on-the-job training have surged in recent months as employers sought to keep up with consumer demand for goods, said Brady, the Florida staffing company owner.

"Companies have become a lot more flexible because they've had to," he said. "They're willing to train people and get them in on an entry level."