A Lack of Applicants in a Fast-Growing EconomyApril 27, 2017 Oregon’s jobs recovery began in the latter part of 2010. Employment growth gained more momentum in 2013 and intensified in subsequent years. Economic expansion has been accompanied by more job vacancies and fewer unemployed Oregonians. In a tighter labor market, vacancies have become increasingly difficult to fill for businesses in Oregon, especially due to a lack of applicants.
The Majority of Job Vacancies Are Difficult to Fill
Oregon employers reported 50,800 vacancies in 2016. These vacancies offered an average wage of $16.97. The majority of vacancies were for full-time positions (72%), permanent positions (90%), and openings that required previous work experience (61%). Relatively few vacancies required education beyond high school (21%).
Businesses reported difficulty filling 32,700 vacancies in 2016, a majority (64%) of all job openings last year. Difficult-to-fill vacancies showed similar shares of full-time (74%) and permanent (91%) positions compared with their non-difficult counterparts. Difficult-to-fill vacancies paid more, an average of $17.81 per hour compared with $14.94 for non-difficult vacancies. Seven out of 10 vacancies required previous work experience, compared with less than half (45%) of vacancies with no reported difficulty filling the job opening.
Vacancies Are Difficult to Fill for Many Reasons
For each of their difficult-to-fill vacancies, employers offered open-ended responses to identify the primary reason for the unfilled opening. These responses were then sorted into 12 categories. Just four reasons accounted for nearly three-fourths (73%) of all difficult-to-fill vacancies. They were a lack of applicants (38%), a lack of qualified candidates (16%), unfavorable working conditions (11%), and low wages (9%).
Businesses indicated a lack of applicants as the most common primary reason for difficulty, which accounted for 12,000 vacancies. These were not job openings where applicants lacked specific skills or training. In 2016, two out of every five (38%) difficult-to-fill job vacancies, and almost one-fourth (23%) of all vacancies in Oregon had an insufficient number of applicants, or none at all. In a relatively fast-growing economy with unemployment rates near record lows, this posed the greatest challenge to businesses statewide.
Job characteristics differed among the most common reasons for difficulty filling job vacancies. Those with a lack of applicants and lack of qualified candidates generally paid higher average wages. Job openings with a lack of applicants offered $18.21 per hour on average, while vacancies with a lack of qualified candidates averaged $22.49 per hour. Difficult-to-fill vacancies with a lack of qualified candidates were also more likely to require education beyond high school, and nearly all required previous work experience.
By comparison, difficult-to-fill vacancies with unfavorable working conditions – which included business responses such as part-time work or inconsistent work shifts – had the lowest share of full-time openings (45%) and a relatively low share of permanent positions (75%). They also offered an average wage more than $3 per hour below the average for all difficult-to-fill vacancies.
As expected, the job openings citing low wages offered the lowest average wage ($12.32). They also included a relatively low share of full-time positions (67%). One out of 10 difficult-to-fill vacancies with low wages required education beyond high school, and roughly one-third (33%) required previous experience.
More Education, More Experience, More Money
Seven out of 10 difficult-to-fill vacancies in Oregon required previous work experience in 2016. The share of difficult-to-fill vacancies with prior experience requirements became even more prominent as education requirements rose. Roughly half (51%) of difficult-to-fill job vacancies with no education requirement required work experience in 2016. That rose to 74 percent for difficult-to-fill vacancies requiring a high school diploma, and 86 percent of those with associate or postsecondary training requirements. Eighty percent of difficult-to-fill vacancies with bachelor’s or advanced degree requirements also required work experience.
Average pay also rose as difficult-to-fill vacancies’ education requirements increased. Hard-to-fill vacancies with no education requirement paid an average of $13.24 per hour, while those requiring a high school diploma paid $13.59 per hour. The average hourly wage rose to $22.50 for difficult-to-fill vacancies with postsecondary training requirements and $31.38 for those requiring a bachelor’s or advanced degree.
Work Experience Requirements Increase Difficulty Filling Vacancies
An interesting and seemingly disparate result in the job vacancy survey is that seven out of 10 difficult-to-fill job openings require previous work experience, while roughly one out of 10 cites a lack of work experience as the key reason for difficulty filling vacancies. In an economy where nearly all who want a job can find one, businesses have a smaller pool of candidates for job openings than back in 2009 and 2010 when there was an unusually large labor surplus and record numbers of unemployed Oregonians.
Previous work experience requirements serve as a filter that narrows an already relatively small pool of candidates. Businesses reported challenges filling 61 percent of job vacancies with no required work experience. By comparison, they reported 79 percent of job openings with more than five years of experience as hard to fill. For 30 of the top 40 occupations that required difficult-to-fill vacancies, businesses reported less trouble filling vacancies when they did not require previous experience, across professional, technical, production, and trade occupations alike.
Difficulty Likely to Persist
The share of difficult-to-fill vacancies in Oregon rose from 48 percent in 2013 to 51 percent in 2014, 59 percent in 2015, and again to 64 percent in 2016. In an economy essentially at full employment and still expanding, businesses can expect a tight labor market to persist. That means continued or even increasing difficulty filling vacancies, given no changes in economic conditions or applicable vacancy factors such as work experience, wages, or conditions on the job.
More information about Oregon’s job vacancies, including quarterly and annual indicators for Oregon and sub-state areas, can be found at QualityInfo.org under the Job Vacancy Survey section of the Publications page.