“The Supply Crunch for Talent”
Thankfully, the unemployment rate has been steadily decreasing since April of 2020 when it was 14.8% at its peak. As of August, 2021, the unemployment rate is now back down to 5.2% (it was as low as 3.5% before COVID). As this continues to trend down, companies are finding it more and more difficult to find talent and to agree to their new demands. To put it bluntly, it’s a GREAT time to be looking for a white collar job that can offer perks beyond base salary.
An analysis of job advertisements from 4,000 of the world’s largest companies concluded that some jobs are even offering sign on bonuses of up to $100,000 for certain specialty gigs. Since August of 2020, jobs that offer sign on bonuses has increased over 450% and that is just one potential “perk” that companies are trying to use to attract top talent.
The question that continues to be asked is, “if our unemployment rate is still higher than before COVID then why are companies still struggling to find talent?”. The answer to this can be summed up in three different ways:
- Many tech-oriented companies are searching for people to fill emerging technology roles that only a select few applicants have the skills for. As new technology in cloud computing, blockchain technology, and artificial intelligence continue to grow, companies tend to compete for many of the same experienced and talented individuals who have truly been around since the beginning of when the technology emerged.
- The recent spike in coronavirus cases due to the Delta variant is also believed to have put caution back into applicants’ decisions to return to work. Some people looking for work in the hospitality or events space are deciding to wait longer until more is known on how the recent spikes will ultimately play out.
- Others also believe that people still need more incentive to actually return to work at all. Unemployment benefits were significantly higher than normal until recently, and many lower income earners enjoyed multiple stimulus checks through 2020 and into 2021. With more opportunities to work from home or find income from a “side hustle”, companies that require “in-office” or “in-person” working environments are having to go the extra mile to entice applicants.
The August 2021 jobs report did show we had an increase of over 235,000 jobs, but this unfortunately was only one third of what Wall Street expectations were. New monthly job figures and unemployment rates specifically across the retail and construction spaces will be important items to watch over the coming months.