As people return to work after historic unemployment during the pandemic, some businesses struggle to hire, leaving small businesses in an especially tough spot.
“The past 15 months or however long it's been has been incredibly surreal,” Beth Gruitch, Co-owner of Crafted Concepts restaurant group, said. “It's been this up and down of hiring and laying off.”
Now -- this restaurant is buzzing with customers again. “We’re busy. People want to go out; they are vaccinated,” she said.
But Gruitch is having trouble hiring at all the restaurants that are part of the group. “We’re having a shortage of staff. There’s like almost 100 job postings, and the amount of people that are here to work in the hospitality industry is very dismal,” she said, explaining that she’s never seen it this bad. “To the point where people aren't showing up for interviews or callbacks.”
While the pay is competitive, the labor pool that existed before the pandemic is no longer there.
“We were always an industry that counts pennies. Well, there's even less of those pennies to count these days,” Gruitch said.
The restaurant industry isn’t the only one experiencing this hiring dilemma.
“There are certain industries more impacted by others, specifically those in construction, manufacturing, transportation. But still those in the restaurant industry services, they’re also having a hard time,” Holly Wade, Executive Director of the National Federation of Independent Business Research Center, said.
The NFIB’s April jobs report showed a record 44% of small business owners with job openings they can’t fill. 92% of these owners report few or no qualified applicants for the positions.
“One in 5 say that they have significant problems with staffing shortages,” Wade explained. This has pushed many owners to offer more in a competitive marketplace.
“Hiring bonuses, referral bonuses, increasing pay, especially for those entry-level positions, are generally what we’re seeing as far as incentives for small business owners to try and attract talent,” she said.
Economist Victor Bennett said there are many theories as to why we see this problem.
“There's a set of people who are going to argue its exacerbated by government assistance...there’s a set of people who are going to say...that the issue is driven by unfair labor practices,” Bennett said. He said there are a few reasons he’s seeing as contributing factors. One is the skills gap, more openings for a job than qualified people. This idea is backed up by the results of the NFIB’s jobs report. Other factors relate to the pandemic.
“A lot of skilled workers had to leave the workforce to provide dependent care,” Bennett said.
And then there’s the devastating impact COVID-19 had on specific industries.
“What some people call an echo effect, of people leaving industries that were affected in the pandemic and find it hard to return. This is happening, for example, wIth people who used to work at restaurants,” Bennett said.
The skills gap is something Georgiann Jaworskyj is experiencing.
“I haven't found anyone that has the experience that could just come into the office and kind of fill those shoes of the girls that left,” she said. She owns a small business travel agency in New Jersey. “It’s been a rough year, but we’ve gotten through, and now I’m so busy I don't know what to do with myself.”
Small businesses are doing what they can to hire people to meet the rising demand from consumers. Their one request is to have patience.
“Be kind, be gentle, because everybody is working hard to try to get back up to speed from where they were last year,” Jaworskyj said.
“In the here and now, service is going to be slow,” Gruitch said.