Employer Responses to the Pandemic from the Oregon Job Vacancy SurveyJanuary 21, 2022 From the extreme job losses in March and April 2020 to the strong job growth of 2021, Oregon’s economy has rapidly changed over the past 21 months. Between changing numbers of COVID-19 cases and pandemic-related government restrictions, Oregonians have been dealing with many unprecedented experiences. Oregon’s businesses are experiencing change too, and their hiring practices are no exception.
Each quarter, the Oregon Employment Department surveys private employers from all industries and areas of the state to ask about the job vacancies they are actively trying to fill. This unique survey offers us direct insight into how employers are feeling about hiring during this time. The survey is designed to identify employers’ vacancies, which ones they have a difficult time filling, and to get a business perspective on why these jobs may be going unfilled.
Oregon businesses reported almost 103,000 vacancies in fall 2021. This follows a record high in summer 2021 of 107,000. The number of job vacancies that employers considered difficult to fill also reached a near record high of 78,000 (76% of total vacancies) in fall 2021. A closer look at the survey results shows some of the ways businesses are responding to the need for workers during the pandemic.
Why are Job Vacancies Difficult to Fill?
For each difficult-to-fill vacancy, employers are asked for open-ended responses about their primary challenge filling the opening. Responses are then categorized into 12 common reasons for difficulty. During the past six quarters, the top reason employers gave was either a lack of applicants or a lack of qualified candidates. These were the same top categories given by employers during the pre-pandemic period.
In summer 2020, fall 2020, and winter 2021 a lack of qualified candidates represented more than one out of five of difficult-to-fill vacancies. In spring and summer 2021 that changed dramatically, and the lack of qualified candidates dropped to 11% and 12%, respectively, of difficult-to-fill vacancies. Rather than having trouble finding a candidate with the proper qualifications, employers were more concerned about the general lack of applications they were receiving.
In winter 2021, lack of applicants was the primary reason for 25% of hard-to-fill vacancies, but in spring, summer, and fall 2021 lack of applicants affected almost half (48%, 44%, and 43%) of these vacancies. Low wages also had an increasingly large impact on jobs being difficult to fill. Low wages, lack of work experience, and unfavorable working conditions were also among the primary reasons for job vacancies being difficult to fill.
In a typical quarter, the 12 difficult-to-fill reasons work well to categorize the responses from employers. But these have not been typical quarters. With the pandemic and corresponding government interventions, employers began citing new pandemic-related reasons causing their vacancies to be difficult to fill. Pandemic reasons can be sorted into the traditional categories seen in the above chart, but to get a better look at what employers were saying about the pandemic and its effect on hiring, we created a customized categorization of reasons specific to the pandemic. The four new buckets are non-pandemic reason, unemployment insurance (UI) benefits, COVID-19, or both UI benefits and COVID-19 being cited. In the fall 2021 survey, employers began to mention vaccine mandates as a reason for difficulty filling positions, so a category was added for that.
Non-pandemic reasons represent 80% to 92% of difficult-to-fill vacancies across the past six quarters. As the pandemic dragged on, the difference between employers citing UI benefits or COVID-19 as a reason changed. In summer 2020, UI benefits represented 7% and COVID-19 represented 5% of difficult-to-fill vacancies. During this time, in addition to UI extensions and Pandemic Unemployment Assistance benefits being offered to the self-employed for the first time, the extra $600 dollars a week in benefits from the CARES Act was still being distributed. In fall 2020 and winter 2021, responses citing UI benefits dropped down to 4% of vacancies, while COVID-19 increased to 5% and 7%. Winter 2021 was on the heels of a surge in COVID cases. In spring and summer 2021, employers began to cite UI benefits with more frequency. Fourteen percent of spring 2021 and 13% of summer 2021 difficult-to-fill vacancies cited high UI benefits as the primary reason employers could not fill the vacancy.
Although enhanced unemployment insurance benefits ended at the beginning of September 2021, employers continued to cite it as a reason for difficulty filling vacancies in the fourth quarter of 2021. Four percent of job vacancies were considered difficult to fill because of unemployment insurance benefits in fall 2021. Additionally, employers also began citing vaccine mandates as a hindrance to filling vacancies at the end of 2021. Two percent of job vacancies in fall 2021 were considered difficult to fill because of vaccine mandates. In another concerning trend, a number of employers mentioned difficult customers as a reason for difficulty filling their vacancies. Some direct quotes from employers include:
- Dealing with more difficult customers from pandemic.
- More difficult customers causing more stress.
- Mean people.
- Hard work, less pay, rude guests.
The difficult-to-fill pandemic-related vacancies had an average hourly wage lower than that of a non-difficult-to-fill vacancy ($18.04). Vacancies that were difficult to fill for pandemic reasons were slightly less likely to be permanent positions, compared with the other two groups. Only 15% of the pandemic-related difficult-to-fill vacancies required education beyond high school.
The health care and social assistance industry made up a majority of the vacancies filled without difficulty, the difficult-to-fill vacancies for not pandemic-related reason, and the pandemic-related, difficult-to-fill vacancies. This industry experienced a record high number of vacancies in fall 2021.
The occupations with the most vacancies in all the categories are very similar. The top occupations for vacancies filled without difficulty were: retail salespersons, light truck drivers, and cashiers. For difficult-to-fill, non-pandemic related vacancies the top occupations were heavy and tractor-trailer truck drivers, retail salespersons, and personal care aides. The top occupations for vacancies that were difficult to fill for pandemic-related reasons were personal care aides and hotel, motel, and resort desk clerks. Most of these occupations are typically lower-paying service sector jobs that often require direct contact with the public. Although truck driving tends to offer higher than average wages, there may have been increased hiring and increased difficulty to fill those positions because of holiday deliveries during the fall.
Sixty-six percent of vacancies that were difficult to fill for non-pandemic reasons required previous experience, much higher than the 33% of not difficult-to-fill vacancies. Pandemic related difficult-to-fill vacancies had the lowest wages of any category. Beyond those differences, it seems like the sheer volume of hiring in recent months has had the biggest impact. As COVID-19 vaccines became wildly available, and pandemic-restrictions on business capacity, social distancing, and mask mandates relaxed, consumers began to consume more goods and services. This led to businesses needing to hire more workers at the same time as every other business in town.
During the pre-pandemic expansion, employers said very similar things about why their vacancies were difficult to fill, most often citing a lack of applicants or lack of qualified candidates. The phrase “no one wants to work anymore” was already a common reason given for why vacancies were difficult to fill. Now, with lack of applicants and lack of qualified candidates still being a major factor in hiring difficulties, the reason has expanded to become “no one wants to work anymore… because of high unemployment insurance benefits, COVID, or vaccine mandates.”
Did High Unemployment Insurance Benefits Discourage Job Searches?
The federal Unemployment Insurance expansions ended on September 4, 2021 in Oregon. Many employers expected the ending of these benefits to increase the number of people looking for work. However, even before the September end date, there were plenty of reasons to know that this might not be the case.
Twenty-six states withdrew from the federal assistance in June and July 2021, ahead of September 4th. Most cut off all federal benefits, but some only ended the extra $300 weekly payment. A paper authored by economists at Columbia University, Harvard University, the University of Massachusetts Amherst, and the University of Toronto found that unemployment insurance benefits aren’t playing a big role in hiring challenges. States that ended federal benefits early did see larger job gains among the unemployed as compared with those that didn’t end benefits early. However, only one out of eight unemployed individuals who were cut off from benefits had found a job by the first week of August. Most people who lost benefits were unable to find a job.
Because there were more people who lost benefits without any resulting job income, on average households cut their weekly spending by 20%. This resulted in those states seeing a $2 billion reduction in consumer spending from June through the first week of August. While the study found that cutting benefits had a marginal positive effect on employment, the larger effects were a reduction in quality of life for those who lost the federal benefits and did not find a job, most of whom were low-income. With the continued job growth in Oregon in the fall of 2021, we are seeing that other aspects besides UI benefits were affecting workers’ ability to take jobs.
As of December 2021, Oregon had gained back 81% of the jobs lost in spring 2020. Several sectors of the economy are also at new, all-time record highs for employment. That includes construction, wholesale trade, and professional and business services. In fall 2021, there were only 74,600 unemployed persons in Oregon. Meaning, for every 10 job openings, there were only seven unemployed job seekers actively looking for work.
The Indeed Hiring Lab conducts a monthly job search survey> and the results showed a 2 percentage point increase in job searches from October to November. For those not urgently looking for work, the reasons for a lack of an urgent job search were varied. The top reasons were employed partners, care responsibilities, COVID fears, and financial cushions.
The hiring challenges employers are facing are widespread across the state, even as employment continues to grow. Workers may not be returning to work because of the lack of adequate childcare, reasonable health concerns during a deadly pandemic, a mismatch between the available workers and what employers are looking for, workers relocating away from jobs or changing industries, and workers retiring. The rise in the COVID Omicron variant threatens the future of the recovery too, as COVID is still a concern.
What Can Employers Do to Attract and Retain Workers?
After federal enhanced Unemployment Insurance benefits ended, employers may have expected a sharp increase in job applications. Research indicates there will be some increase in employment from this but there are still other barriers in place to people seeking employment. An article by State Employment Economist Gail Krumenauer discusses in detail recruitment and retention in a tight labor market. She lays out a number of different ways employers have responded to tight labor market conditions. These include raising wages, adding benefits and perks, relaxing experience requirements, and ramping up recruitment intensity. Read more in the full article here.