Jose Contreras, the human resources director for Shrimp Basket, a group of seafood restaurants based in Pensacola, Florida, has been trying for six months to find enough workers for the busy summer season. But it was useless.
Traditional methods such as paid ads on job sites and hiring bonuses have not brought enough applications, so last month it decided to get more creative and give away a new sports utility vehicle worth almost 23,000. $ in a fight.
“When you compare the cost of a new car to not having workers who take care of our guests, and risking having to close the restaurant or go hunting and shopping alone, it’s not really such a big investment,” he said. said Contreras. .
The promotion of the car has led to an increase in job applications, but more than half of the roles he had hoped to fill are still vacant.
The Shrimp Basket, which has 20 locations, is one of 48 percent of small businesses that had open jobs in May, according to to the National Federation of Independent Enterprises, and its recovery from the Covid crisis is content to fill them.
As a shortage of workers took over the economy this spring, national chains including Costco, McDonald’s and Chipotle have rapidly increased wages and offered incentives to attract workers, such as signing bonuses and contributions to college tuition fees. .
Some of these efforts have been successful. The labor department said Friday that employers have hired 559,000 workers in May, almost twice as much as in April, but still below the expectations of economists.
However, the improvement in recruitment has been fueled by sectors such as warehousing, manufacturing, transport and healthcare. The pace of job gains in the leisure and hospitality industry, home to much of the “Mom and Pop” operations, fell in May to 292,000 from 328,000 a month earlier.
Small business owners, many of whom still face the financial difficulties unleashed by Covid, are often unable to meet the incentives offered by large corporations, leaving them struggling to compete for talent.
“Small businesses feel the same pressures but don’t have access to a toolkit to address it,” says Daniel Zhao, senior economist at the Glassdoor job site.
Zhao added, “They don’t have access to a vast group of geographic talent, and then, in addition, they generally have less financial cushion to change compensation to attract workers.”
The Federal Reserve he said that the Covid crisis forced an additional 200,000 small businesses to close last year than would otherwise have been expected. Economists predict that even more could collapse when unpaid pay bills and emergency loans begin to come.
Small businesses are hoping for a profitable summer because of the rapid spread of vaccines, easing pandemic restrictions, and consumers who are running out of money due to stimulus controls and an increase in the savings rate. . But this is subject to them finding enough workers.
Conservatives cite the plight of small businesses as the reason why they are pushing back $ 300 recharge of unemployment benefits funded by the federal government. In some states, the additional payment means that the total amount of benefits on offer is more than the minimum wage per hour.
Funds are due to expire in September, but 4.1 million Americans in 25 states with Republican governors will lose access sooner.
“[Entrepreneurs] it has shifted from one major challenge to another, ”says Holly Wade, researcher at NFIB.“ From trade restrictions to this challenge of trying to employ and increase business operations. And you can’t do that. ”
Wages and incentives offered by large corporations have also made it more challenging for small businesses to retain workers they already have, Wade added.
In an attempt to operate with fewer employees, some independent restaurants have revised their staffing patterns so that employees float between positions instead of having specialized guests, waiters and bartenders, according to restaurant hunter Tonya Breslow.
Other restaurants are simplifying their menus so dishes can be made faster and less cooked, Breslow said..
“We assumed that people would enroll again, but that didn’t happen, so they had to scramble and adapt,” he added.
Contreras said the Shrimp Basket plans to put QR codes on tables so that diners can order and pay for meals on their phones if the restaurant group isn’t able to employ enough staff to provide a service. of complete table.
“I understand the need for benefits and better working conditions and not to go back to work because of Covid’s fears, but at the same time the restaurateur has to pay his bills,” he said. “They need to make things grow. It’s a tight line.”
Breslow said the flow of candidates to his Mis en Place staffing firm had resumed in recent weeks after slowing to “a thread” in April, but job seekers are clamoring for offers that include salaries. high and flexible hours.
Nicole Marquis, founder of a vegan restaurant based in Washington DC and Philadelphia, raised the minimum wage for her employees to $ 15 Tuesday. She said HipCityVeg has already seen a boost in new apps and morale among existing staff.
“It really makes good business sense,” Marquis says. “We are investing in our greatest heritage, which is our people.” So we see a return on this investment soon enough, I think. ”
Average earnings per hour rose to $ 30.33 last month, compared to $ 30.18 in April and $ 29.74 in May 2020, according to data from the Department of Labor on Friday, which offers evidence of a higher wage in the economy.
Zhao says companies that are unable to afford to invest in higher wages could find themselves at a disadvantage if the labor shortage lasts beyond September. That’s when economists are waiting for the end of extended unemployment benefits and the reopening of schools to alleviate labor market tensions.
However, companies that have learned to operate with less staff during this period of labor market tension could end up permanently reducing their numbers, which could demonstrate a long-term drag on the search to get full employment.
“This is a much better problem to have, because we have more income coming in than we are employed,” says Marquis.