Job Seekers Are Gaining Control over Hiring

​The U.S. labor market is facing an abnormal summer: Millions of open jobs and nowhere near enough applicants have created a shift in power that has given job seekers the upper hand in recruiting and hiring.

Labor market data coming out of the COVID-19 pandemic is unprecedented—a record number of available jobs and historical highs in workers quitting and retiring have pushed employers to offer higher wages, signing bonuses and other perks, and to open up jobs to more teenage workers.

"The pandemic has changed how people want to work and what they expect from their employer, as exemplified by the recent boost in wages and benefits offered by large fast-food chains," said Mathieu Stevenson, CEO of Snagajob, a Richmond, Va.-based platform for finding and hiring for hourly work. "Many restaurant and hospitality workers had to change industries to find competitive work at a livable wage—moving to industries like warehousing and on-demand delivery. The restaurant and hospitality industries are now having to compete with the wages and benefits offered by other industries like never before. It is a great time to level up for workers who want to find a new, higher-paying position."

Data shows that the share of job postings listing "no experience necessary" and "hiring urgently" are well up from 2019 levels, and the share of job ads promising a starting bonus has more than doubled year over year. Job-seeker searches for hiring bonuses have steadily climbed since mid-spring, according to Indeed.

"To be sure, these kinds of postings account for only a small minority of job ads on Indeed," said AnnElizabeth Konkel, an economist with the Indeed Hiring Lab in Washington, D.C. "Nonetheless, recruitment gambits like these underscore how some employers are throwing everything at the wall to see what sticks. Hiring incentives are also attractive to employers because they are a one-time cost that doesn't require increasing wages or paid time off for all employees."

[Want to learn more about hiring post-pandemic? Join us at the SHRM Annual Conference & Expo 2021, taking place Sept. 9-12 in Las Vegas and virtually.]

Big Hiring Plans

Employers reported the strongest quarterly hiring outlook since 2000, according to ManpowerGroup's latest employment forecast covering July-Sept.

The survey of over 7,300 U.S. employers found that 32 percent plan to increase staff in the third quarter, while just 3 percent plan to decrease hiring for a net employment outlook of 29 percent. Even when adjusted for seasonality, the net employment outlook is the strongest since 2000 and a significant leap from the 3 percent employment outlook score recorded this time one year ago, when COVID-19 took a major toll on hiring.

Employers in all industry sectors reported positive hiring plans, with the leisure and hospitality sector (41 percent) leading all others. Job opportunities will also abound in wholesale and retail trade (29 percent), education and health services (27 percent), transportation and utilities (26 percent), and professional and business services (21 percent).

Employers in the education and health services, information, and leisure and hospitality sectors are reporting their strongest hiring plans since they were first analyzed by ManpowerGroup in 2009.

"Employers are ready to bring their workers back as restrictions lift and America gets ready to work," said Becky Frankiewicz, president of ManpowerGroup North America. "Yet child care challenges, health concerns and competition mean demand still outstrips supply, which is dampening the 'big return' of the American workforce. It's a worker's market, and employees are acting like consumers in how they are consuming work—seeking flexibility, competitive pay and fast decisions."

Now is the time for employers to get creative to attract talent, she said, "and to hold onto the workers they have."

Where Are the Workers?

Hiring optimism is tempered by the deepest talent shortages in 15 years, with 32 percent of U.S. employers reporting labor shortages.

"This is the most competitive job market in a generation, significantly more so than pre-COVID, which was already considered to be a very tight job market," Stevenson said. "Job vacancies are up 68 percent [for hourly workers], while job seekers remain flat versus pre-COVID levels. My expectation is that we will continue to see a tighter and tighter labor market this year, along with difficulty hiring and an increasing turnover rate."

Stevenson said he doesn't believe "the narrative that people are sitting on the sidelines collecting unemployment benefits" is accurate. According to a Snagajob survey of 12,000 workers, just 4 percent reported being unemployed, not looking for a job and waiting for their benefits to expire.

"The overwhelming majority said they wanted to work, but structural issues were keeping them out of the labor force, like family obligations and things still being in the process of reopening," he said. "The more-generous unemployment benefits have been an enabler, however, giving people more flexibility to seek out the job that best fits them. As workers re-enter the workforce, they are looking for opportunities that will match their lifestyles and plans for now and in the future."   

At least 26 states have decided to end the federal pandemic-related unemployment benefits programs early, citing widespread worker shortages. Governors have argued that the more-generous payments, including the $300 federal weekly boost, are keeping workers on the sidelines. It's not yet clear whether pulling the plug on expanded benefits is pushing people to return to work, but labor market data, including the Snagajob survey, found that job search growth has accelerated in the states that announced an early rescission of the jobless benefits.

Konkel noted that a clue to workers' reluctance to apply to in-person work might be found in the data around urgent hiring job ads, which are more likely to be found for jobs involving onsite work. Job postings with terms like "hiring urgently," or "immediate start'' have been seen mostly in sectors such as personal care and home health, child care, nursing, cleaning and sanitation, driving, and construction.

"In other words, postings for jobs more likely to be remote are less likely to note hiring is urgent," she said. "The fact that urgent hiring jobs are less likely to be remote shows [concerns about] COVID-19 can't be dismissed yet. Large swaths of the populations are still not fully vaccinated."

Hiring Incentives Grow

Employers have been experimenting with a range of hiring incentives such as signing bonuses, retention bonuses and cash incentives to attract job candidates.

Hiring incentives are spread relatively widely across sectors, appearing more often in job posts for driving, dental and nursing, as well as personal care and home health, according to Indeed.

"Among job postings that spell out a hiring incentive dollar amount in the job title, the value can vary widely within a sector," Konkel said. "Nursing jobs offered incentives ranging from $100 to $30,000. In food preparation and service, incentives ranged from $100 all the way up to $2,500. Of course, geography and job type influence how much an employer is willing to offer."

The uptick in searching for hiring incentives indicates the labor market is recovering and that some job seekers believe they are in the driver's seat, she said. "These workers are holding out for better deals rather than taking the first opportunity that comes along."

Stevenson agreed, adding that employers are facing growing demand to increase pay and expand benefits as the economy rebounds from the pandemic.

At least 10 states are experimenting with hiring bonuses as a further incentive to re-enter the workforce. Montana became the first state to authorize a return-to-work bonus in early May, offering $1,200 to then-unemployed individuals who complete four full weeks of paid work.

Arizona rewards newly employed full-time workers with a $2,000 payment after 320 hours of work and $1,000 to those who obtain part-time employment and work at least 160 hours.

Nearly 40 percent of unemployed people who lost their jobs during the pandemic and are not actively looking for work said a $1,000 hiring bonus would increase their urgency to return to full-time employment, according to a new poll released by the U.S. Chamber of Commerce.

Other incentives or developments that would encourage unemployed Americans to re-enter the workforce include work-from-home flexibility and worker vaccination requirements.

"America's great economic resurgence is being held back by an unprecedented workforce shortage—and it's getting worse," said Neil Bradley, executive vice president and chief policy officer for the Chamber. "We are seeing an increasing number of businesses turning down work and only partially reopening because they can't find enough workers."