4.28.22 – By Mitchell Schnurman The Dallas Morning News- DALLAS
As the pandemic threat eases and people settle into a new normal, the biggest headwind for many companies is finding enough workers.
Texas had 932,000 job openings in February, the most since the government began compiling such data over two decades ago. In addition, 400,000 Texans quit their jobs in February — not a record high, but not far from it.
Employers have long complained about talent shortages, and then the pandemic pushed millions to leave the workforce.
In an April survey of Texas business executives by the Federal Reserve Bank of Dallas, nearly two-thirds of respondents said they were trying to hire or recall workers. About 30% said the situation had worsened in the past month.
Their No. 1 impediment, by far, was a lack of applicants. The next big hurdle: Workers were looking for more pay than was offered.
“It’s a double hit right now,” an unnamed executive from a data processing company wrote in comments to the Dallas Fed. “Hiring talent is a key issue (minimal available talent), and that’s slowing growth. Paying much more to retain employees is also slowing growth because higher wages leave fewer funds for hiring.”
An executive in administrative and support services said the firm was also struggling to land talent: “Even with increases in wages that are severely affecting our margins, we cannot hire,” the exec wrote. “The work is there, just no one to do it.”
In 2019, the year before the pandemic, Texas averaged about 575,000 job openings a month. The February total, the latest available, represents a 62% increase over the pre-pandemic state.
A similar trend is playing out in the broader U.S. labor market. In February, the nation had nearly 11.3 million openings, compared with about 7 million just before the pandemic.
Texas manufacturing remains in growth mode, with new orders rising. But general outlooks were weaker amid higher wages and prices, said Emily Kerr, Dallas Fed senior business economist.
“Several manufacturers remarked on material and worker shortages constraining their ability to meet demand,” Kerr said in a statement.
Among manufacturers, the company outlook index slipped to its lowest reading in two years, the Dallas Fed said. And uncertainty spiked, with 40% of executives saying it had increased in the past month.
“Demand continues to outstrip our ability to supply,” wrote one respondent from a computer electronics manufacturer.
“Labor shortage!” wrote a maker of wood products. “Need a job?”
In November, Texas and Dallas-Fort Worth passed a milestone when total employment topped the pre-pandemic peak. That meant the state and metro area had recovered their total job losses, but some key categories were still lagging.
Texas manufacturing, for example, had just under 903,000 workers in March. That’s 7,000 fewer than in February 2020, just before the pandemic led to lockdowns and deep job cuts.
The depth of today’s worker shortage is “unprecedented” for goods-producing companies, said Tony Bennett, CEO of the Texas Association of Manufacturers.
“This is a continuing problem that started many years ago, and it was only exacerbated by COVID-19,” he said. “There’s a chronic misconception about today’s manufacturing — and about opportunities for a career.”
Today’s smart manufacturing doesn’t involve dirty factories, he said. And there are many paths for the tech-savvy, including young people skilled at video games.
“If they’re quick with a keyboard, they’re going to make a lot of money with these corporations,” Bennett said.
Entry pay often starts at over $40,000, he said, and experienced manufacturing workers can make twice as much. For those in the semiconductor industry, annual salaries can hit six figures, he said — and he pointed out that Texas Instruments plans to build new chipmaking plants soon.
Manufacturers are creating apprenticeship programs and forming regional hiring consortiums to work with high schools and community colleges. They’re offering paid training, including tuition reimbursement.
While Texas has more job openings than ever, the state also has a high number of new hires and workers quitting their jobs.
During the pandemic, many workers reconsidered their careers and took the opportunity to make a switch. The rise of remote work also changed the workplace proposition, offering a better work-life balance for many, especially those juggling caretaking duties.
The Dallas Fed survey asked about remote work, and just 8% of employees were working remotely before the pandemic. In April, that share was 39%, with a majority being hybrid work arrangements. In the future, execs said, they expect 36% of workers to be remote.
“So we’re already quite near to the new normal,” said the Dallas Fed’s Kerr.
The workplace of the future remains a work in progress for many: “We are still wrestling with the appropriate combination of remote and in-office work,” said an executive in professional, scientific and technical services.
Others acknowledged they must compete for workers wherever workers are — even if that’s not the company’s first choice.
“Because of labor shortages, we’ve had to accept remote work to accommodate experienced staff who live out of town,” wrote a professional services company. “Our preference is to have in-office staff.”
“Demand for hybrid/remote work remains high, and we have to offer it to hire and retain,” said an educational services company. “But it is causing some inefficiencies and dysfunction.”
For some, remote work is not an option. Just over half of private employers did not offer remote work during the pandemic, according to the U.S. Bureau of Labor Statistics. That included over 90% of hotels and food service companies, and 75% of retailers.
In manufacturing, some administrative and sales people have worked remotely, but even that wasn’t universally embraced.
“We lose effectiveness with office personnel at home,” a printing company executive wrote to the Dallas Fed. “Manufacturing workers cannot obviously work remotely.”
Those on the administrative side tend to come to the plant a couple of days a week, said Bennett of the manufacturers’ association. But most production workers are required to be on-site full time, even if that makes recruiting more difficult.
“There’s a lot of competition for these workers,” Bennett said. “And you know young people are going to look for the highest pay with the most air conditioning.”