How Can Unemployment Be 6.1% When “Help Wanted” Signs Are Everywhere?

How Can Unemployment Be 6.1% When “Help Wanted” Signs Are Everywhere?

Let’s start with the common belief that workers are on the couch collecting unemployment, waiting for those checks to expire in September before dragging themselves to their computers to find a job. Then let’s agitate ourselves even more by learning that 42% of those receiving unemployment benefits are receiving more than they were earning in their prior jobs.[i]

“Not so fast, my friend” is one college football commentator’s catchphrase for disagreeing with his Saturday morning colleagues…and his line applies here. More on Lee Corso later.

Here are two numbers to get us started. The U.S. is down 8.4 million jobs since before the pandemic and 4 million workers have left the workforce since the pandemic began.[ii] Where did 4 million of our colleagues go? One chunk is retirees, people who walked away in the midst of the pandemic, choosing to permanently avoid the pratfalls of pandemic work rather than deal with them.  Two million workers have decided to retire since the start of the pandemic, more than twice the normal level.[iii]

Then there are the millions of working parents who have been conflicted about their kids and schools. Only 60% of the 200 largest U.S. school districts were fully re-opened during late April, and many childcare centers continued to operate at less-than-full capacity.[iv] Maybe those childcare centers couldn’t find workers either. Moms have born the brunt of this stay-home-with-the-kids outcome, evidenced by more women having left the labor force than joined it in April. Overall, women have left the workforce at twice the rate of men.[v]

Then toss in that more than half of U.S. workers prefer to work from home and might be holding out for a job that promises permanent work-from-home status versus take a job with the majority of companies that are still trying to figure this out.

There are more job openings today than before the pandemic, according to the Bureau of Labor Statistics and job posting sites like Indeed. Many economists saw April’s paltry addition of just 266,000 jobs added to our workforce not as a sign of a slowing economy but instead a reflection of our current worker shortage.

This will all pass. Let’s call it a bubble. Keep in mind that the 6.1% unemployment rate does not reflect the number of open jobs but instead the number of workers who are filling those jobs. And the combination of vaccinations + retail/restaurant re-openings has led to a crush of open jobs, giving those who want to work many choices so they can drag their feet and be picky.

Perhaps the bigger question is where will the unemployment rate be by year end? As said here previously, one respected estimate is 3.2%, far below the pre-pandemic low of 3.5%. Can our nation’s unemployment rate fall from 6.1% to 3.2% in just six months? How many times can we say “unprecedented”?

So here’s a prediction. Finding workers for the rest of this year and longer will be just as hard as it is today, even though the reasons will change.

And here, then, is a recommendation. The best solution to recruiting is retention. With so many open jobs nearby, never go to sleep assuming your best workers will show up the next day. My company consistently cuts turnover 30% and more because we know the secret sauce. And the secret sauce is based on science rather than “best practices”. OUT are employee surveys that lead to one-size-fits-all programs and IN are retention goals and accountabilities, with Stay Interviews then becoming the modern-day employee retention solution.

And for you fans of Lee Corso, Lee lives about a mile up the road here in Orlando. Prior to his stroke he would hold court in grocery stores and gas stations to talk college football with anyone who would listen. And the pencil he wags each fall Saturday is from Dixon Ticonderoga, the pencil-making company where he was marketing director for many years.

Dick Finnegan is SHRM’s top-selling author and top-rated webcast presenter. Please email your comments to DFinnegan@C-SuiteAnalytics.com.  Contact Dick to discuss how we can help you retain your valuable employees.  You are also welcome to forward this blog to anyone you believe would find it helpful.

[i] https://www.wsj.com/articles/millions-are-unemployed-why-cant-companies-find-workers-11620302440

[ii] ibid

[iii] https://www.nytimes.com/2021/03/15/business/economy/labor-force-dropouts.html

[iv] https://www.wsj.com/articles/millions-are-unemployed-why-cant-companies-find-workers-11620302440

[v] Ibid

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