Economist explains why there are so many job openings
Workers are in high demand and companies are having a hard time finding people to fill the positions.
By Kathryn Vasel, CNN Business
Workers are in high demand. And companies are having a hard time finding people to fill the positions.
There were more than nine million job openings in the US at the end of May, according to the Labor Department.
To attract applicants away from the competition, employers are beefing up their incentives.
“There is elevated demand for labor,” said AnnElizabeth Konkel, an economist at job search website Indeed.com. Job postings on Indeed.com were up nearly 36% in early July compared to the pre-pandemic baseline, she said.
Job postings that say “urgently hiring” or mention hiring incentives are also on the rise. “People are really trying to get workers and they are trying to get creative,” she said.
Throwing money at the problem
Dollar signs are one way to help attract applicants.
“The first line of defense for most companies is to throw more money at the problem,” said Lauren Ferrara, vice president of recruitment operations at recruiting and consulting services company Creative Circle.
Some companies that are struggling to hire have been raising wages. But salary hikes aren’t the only way to get a job seekers’ attention.
Many companies are offering signing or hiring bonuses.
“Hiring incentives are one-time costs to employers. When they get enough workers, they can drop the hiring incentive if they choose to,” said Konkel. “And that’s very different than raising the wage for all employees.”
Even industries or positions that don’t traditionally offer hiring bonuses are using them to find workers.
The size of hiring bonuses can vary — even within the same industry. For instance, Konkel recently saw two nursing positions advertised, one had a $100 signing bonus while the other was offering $30,000.
“Employers are in a crunch right now,” said Konkel.
In May, Amazon announced plans to hire 75,000 people in fulfillment and transportation jobs with sign-on bonuses of up to $1,000 in many locations. Restaurants are also offering hiring bonuses. For instance, Junior’s Restaurants in New York City is offering a $250 sign-on bonus to counter customer service/counter employees who remain employed at the restaurant for at least 30 days. And a job posting for a driving instructor in New York City is advertising a $1,500 signing bonus.
Acting fast on offers
Drawing out the hiring process can mean losing your applicant in this tight labor market — so many companies are making job offers faster.
“I’ve seen interviews and offers on the spot, interviews and then offers the next day, and some companies take a few days,” said Ferrara. “Some companies are moving very, very fast. At least the smart ones are.”
Global cyber security firm Semperis wants to double its headcount to around 340 employees by the end of next year. To help meet its goal, it’s shortened its hiring process to seven days from 15 to 20 days.
“I can be on a call for a phone screen today and two days later they are telling me they have an offer from another company,” said Snezana Sjekloca, vice president of global human resources.
The company is also offering signing bonuses ranging from $10,000 to $20,000 for some senior roles. “It’s mostly the hard to fill senior sales roles, they are in such demand,” said Sjekloca.
Throwing in help with childcare
For working parents, finding childcare can be a major roadblock to employment, especially as they return to the office after the pandemic. And some employers are addressing that problem to appeal to potential workers.
“Companies have been offering childcare benefits of many different types, not only to align with hybrid schedules, but also to attract workers regardless of their office schedules,” said Andrew Hunter, co-founder of job search company, Adzuna.
US franchisees of McDonalds, for example, recently announced plans to add emergency childcare to its benefits as part of a pilot program they hope will attract more workers, the Wall Street Journal reported.
Feminine hygiene company Thinx has been on a hiring spree since September. It’s more than doubled its headcount since then and is looking to grow an additional 50% in the next six months.
The company has always offered an $800 monthly childcare stipend for children up to age five.
“It’s part of our core strategy to be a family-first organization, and you can see today that a lot of companies are shifting that way because they have to, there is so much pressure on them,” said Chantelle Mowbray, senior vice president of people and culture.
She added that the stipend is often cited by new hires as a reason they accepted the job.
Offering more flexibility
Employers are also being more flexible about how new hires work, according to Ferrara.
“A lot of clients are telling us ‘We don’t care if its temp or contract work or full-time, we are flexible to whatever the candidate wants,'” she said.
Employers are also touting work-life balance, especially when it comes to paid time off. “A lot of companies are now shifting to an unlimited PTO policy,” she said.
Expanding the pool
Digital commerce and marketing solutions firm Avionos is looking to add 30 employees to its roughly 120-person team by the end of the year. To help find new hires, it’s broadening its potential talent pool.
“We’ve expanded to look at the ‘athlete’ — more of a generalist who has those inherent characteristics that we feel have that moxie and that entrepreneurial spirit,” said chief people officer Gibson Smith. “We can upskill and uplevel.”
Correction: An earlier version of this story misspelled Andrew Hunter’s last name.
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