Austin experts explain 10 reasons behind our current labor shortage

Business

AUSTIN (KXAN) — Employers are posting more jobs in the Austin metro area than they have in at least six years… But many are having a hard time filling those spots.

According to the Austin Chamber of Commerce, there were 23,265 new jobs posted in November of 2020. That grew by about 39% in November 2021.

The Chamber also points to even more jobs coming to the area, soon, saying 2,800 jobs were announced in November, and 23,000 announced in all of 2021. That includes Samsung Austin Semiconductor and Iron Ox.

Data from the Austin Chamber of Commerce shows all available job postings and new job postings in the Austin metro area between November 2015 and November 2021.

So, KXAN reached out to a couple of experts to find out the reasons behind the lag in filling those jobs.

Edward Anderson is the Wright Centennial Professor for Management of Innovative Technology at the University of Texas McCombs School of Business. His expertise includes supply chain management, entrepreneurship and health care.

Jameson Cardenas is a spokesperson for Workforce Solutions Capital Area, a nonprofit that plans, oversees, and evaluates workforce development activities in Austin-Travis County. The group also offers job training and resources to help connect more people to jobs for which they qualify.

KXAN has covered some of these reasons behind the labor shortage in the past and others you may not have thought about.

Workers want a job they care about

After protests like those for the Black Lives Matter movement over the last few years, Isokoy McDermott found himself being approached by his bosses.

“I would always be a go-to person within those organizations to be able to either coach executives or have those tough conversations,” he said.

This year, during the pandemic, he began rethinking that role.

“Once I began to realize that that’s only helping out a small fraction of people, I said, ‘Now it’s time to step out so that I could help and assist more companies.'”

He resigned from an Austin tech company in August to dive full time into his own training and coaching company, Leaders Inspire Leaders. He discusses inclusivity in job hiring and recruiting, as well as worker retention.

“Then you have an opportunity to truly retain that person because you are focusing in on things that are going to help make them feel included and make them feel like they truly belong in the organization,” McDermott explained.

According to a survey released this month by job posting company Indeed, McDermott isn’t alone.

More than 90% of respondents who switched jobs during the coronavirus pandemic reported “the pandemic made them feel life is too short to stay in a job they weren’t passionate about.”

“People have determined or redefined what they consider a good job to be,” Anderson said.

Workers want higher wages

The same Indeed survey found that half of job switchers ended up seeing an average salary increase of 52%.

“These survey results suggest that while flexibility and remote work drove initial pandemic job switches, the opportunity to make more money quickly became the top motivator to continue the job search,” the report states.

In April, Jeremy Durnford told KXAN he turned down an offer to come back to the restaurant where he worked after it reopened from pandemic shutdowns.

He says he was offered an hourly wage instead of his previous salaried position.

“It wasn’t making money, it wasn’t paying the bills,” he said.

Durnford ended up getting certified online to become a health insurance agent.

Workers want flexibility

This is especially true for working moms and black employees, according to a report released in June by the Future Forum, a consortium launched by business communication company Slack.

The report, based on research from more than 10,000 workers in the United States and other countries, found that workers rank flexibility second in importance, behind compensation.

“93% of knowledge workers want a flexible schedule, while 76% want flexibility in where they work,” the report reads.

The coronavirus pandemic is still a concern

“In our analysis, that wide gap between job openings and job seekers is due to three big factors, including ongoing fear and the pandemic,” Cardenas said.

Just this week, the Austin EMS Association announced a ‘crippling shortage’ of Austin-Travis County EMS due to COVID-19 cases among workers.

“There also may be confusion about safety in the workplace or you know, getting back to work and being protected,” Cardenas said.

Anderson added that vaccine hesitancy is also holding some workers back from jobs that are listing that as a requirement.

The Austin Chamber of Commerce’s latest report indicates there are about 1,900 local job postings that mention or require vaccinations in November– an increase of 1,200 compared to October.

“This could also be attributed to the federal vaccine mandate,” the Chamber noted.

More workers retired early during the pandemic

Those COVID-concerns have also led to many people retiring early.

“Two-point-five million jobs have been lost because of retirement,” explained Anderson. “Two-thirds of those, roughly, are people who just they didn’t have to retire; early retirees.”

Goldman Sachs released a report earlier this month indicating that more than half of the retirees it polled retired earlier than expected, with health concerns being the top reason.

Another analysis by the Federal Reserve Bank of St. Louis found that, as of August 2021, just over 3 million people “likely retired earlier than they would have otherwise” during the pandemic.

Many workers need help with childcare or caregiving

Cardenas said childcare is one of the top three reasons behind the Austin metro area’s labor shortage, according to a Workforce Solutions (WFS) analysis.

“We know that it’s hard for parents to jump back in to the labor pool if they can’t find care for their kids,” he said.

Indeed’s December survey also found this to be true for many across the country, with 40% of those who switched jobs saying “their companies would not accommodate their need to stay at home with their children and/or dependent family members after school and/or care facility shutdowns.”

Cardenas said WFS has a program to help, it allows low-wage workers in industries like food services and hotels to get free childcare for one year.

There’s a mismatch between open jobs and workers’ skills

“There’s an estimated 54% of jobs in Texas are considered middle-skill level. Yet only 45% of Texans have those credentials,” Cardenas said.

He said WFS data shows that 69% of all of the unemployment claimants in Travis County since March 2020 have less than an Associate’s degree, and he said those claimants are disproportionately black or Hispanic.

“So there’s a clear need to find what services and training programs career seekers need to connect diverse populations into these in-demand, high paying jobs that are available in our community,” Cardenas said.

He said WFS offers pathways like “Earn and Learn” apprenticeship so people get a paycheck while they train on the job and to earn those necessary credentials.

Some workers are excluded from openings because of preexisting inequities

“We’re aware of the systematic bias and socio-economic barriers that has present prevented or discouraged people of color from post secondary education,” Cardenas said.

That kind of education requirement filters out millions of American adults each year, according to the nonprofit, Opportunity@Work.

The group estimates there as many as 70+ million American adults who have graduated from high school but don’t hold a four-year college degree, but still have the skills for middle- and high-wage jobs.

“Employers often use education as a determinant of employability, which eliminates those with the skills but can’t afford or access to degree,” Cardenas said.

Opportunity@Work estimates education requirements exclude about 68% of black Americans, 79% of Hispanic and Latino Americans, and 73% of rural Americans.

“It’s really a question for employers,” Cardenas said. “How can you re-evaluate job postings so that we’re hiring for skills and not eliminating people based on education?”

Stress and burnout

“Those who have remained in their jobs during COVID have had to make up the slack for the shortage of other jobs, and so working has become less desirable,” Anderson said.

That was the case for Janelle Reynolds, a former chef at Rosedale’s Kitchen and Bar in Austin.

She told KXAN she submitted her resignation at the job she loved due to burnout, she couldn’t keep covering for staff that kept leaving.

“It broke me,” Reynolds said. “I knew I physically, mentally and emotionally could not do it again of trying to re-staff a kitchen, retrain a new sous chef, retrain a lead line cook and do it without having a breakdown,” she said.

There are gaps in some hiring software

“There are automatic filters within software, hiring software that keeps a lot of resumes from even showing up with employers,” Anderson said.

A Harvard Business school report, updated in October of this year, calls those “hidden workers.”

“About half of those systems kick out anyone who’s been out of work for more than six months, which give it a COVID has been going on for two years is quite a problem. So those systems need to be updated,” Anderson said.

Harvard’s report surveyed more than 2,250 executives in the United States and abroad, with 88% of employers saying that qualified candidates “are vetted out of the process because they do not match the exact criteria established by the job description. That number rose to 94% in the case of middle-skills workers.”

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