Despite an unemployment rate of 6 percent in March — down from nearly 15 percent a year ago but still up from 3.5 percent in February 2020, before the onset of the COVID-19 pandemic — more companies are saying that they have open jobs but not enough applicants.
The National Federation of Independent Business reports that 42 percent of small businesses currently have roles they can’t fill, which is well above the historical average of 22 percent. This seems sort of counterintuitive: With so many people pushed out of work when the pandemic began, it would seem that companies with openings would have no problem filling them, but that’s not been the case.
A few factors might be contributing to this phenomenon. First, many potential employees might still be leery of going to a job site because of COVID-19, and with many schools still closed, a large number of working parents need to care for children at home.
Second, there may be a general disinterest in returning to a full-time job, either because someone is doing fine with unemployment benefits as their source of income or has found one or more “gigs” that provide increased flexibility.
Finally, large companies continue to dominate the talent pool, often making it harder for small- and mid-sized employers to compete. For example, Amazon grew 63 percent in 2020, and that rapid growth meant fewer job candidates for other organizations.
That talent pool is expected to shrink even further, with the unemployment rate projected to fall to 4.5 percent by early 2022. This means that employers are going to have to work even harder to recruit a smaller number of potential employees.
In this type of environment, attracting and retaining talent become that much more important — and mobility can play a key role in helping (or hurting) the cause. If you haven’t benchmarked your program in a while to see if your benefits are competitive, now might be a good time to do so. Offering the right relocation package could make the difference in securing a key hire versus having a role you can’t seem to fill.
What makes these figures surprising is that the unemployment rate in March, though well off its peak of 14.8% a year ago, was still 6%. That’s well above the 3.5% rate of February 2020, before the pandemic. So judging from the jobless rate, which the Federal Reserve tracks closely, there’s still plenty of slack in the labor market. But that’s not how employers and job counselors see it. There will be even less slack in coming months as the economy strengthens.