Employers Report Unfavorable Working Conditions as New Top Hiring Challenge

by Gail Krumenauer

November 7, 2019

Throughout the year, the Oregon Employment Department surveys private employers from all industries and areas of the state to ask about the job vacancies they are actively trying to fill. Employers provide the job title, starting wage, and education and experience requirements for each of their vacancies. They also specify whether their vacancies are for full or part-time positions, and permanent or seasonal jobs. If they face hiring challenges, employers also write in the primary reason for difficulty filling each job opening.

Shifting Hiring Challenges

The Oregon Job Vacancy Survey has included an open-ended question about employers’ difficulty filling job openings since 2013. In that year, businesses cited a lack of qualified candidates as the most common hiring challenge. This difficulty finding workers with a specific mix of education and experience accounted for 3,600 (24%) of all hard-to-fill vacancies with reasons provided.

As hiring demand strengthened, employers’ hiring challenges shifted. Each year from 2014 through 2018, a lack of applicants was the most common reason businesses gave for difficulty filling vacancies. The share of difficult-to-fill vacancies with either too few or no applicants peaked during 2015 and 2016, the period of the strongest annual job growth in Oregon during this expansion (3.4% and 3.0%, respectively). In 2016 alone, a lack of applicants accounted for 12,100 (38%) of all difficult-to-fill job openings.

As Oregon reached its record low unemployment rate (4.0%) in November 2016, and has maintained that low unemployment for three years, a new hiring challenge has emerged. “Unfavorable working conditions” includes part-time, on-call, overnight, or inconsistent work schedules, as well as difficult physical working conditions. Employers reported unfavorable working conditions as the primary hiring challenge for 3,100 (or 11%) of the difficult-to-fill vacancies in 2015 and 3,600 in 2016 (11%). That grew to 5,000 (14%) in 2017, and rose again to 6,500 (24%) in 2018. During the first three quarters of 2019, the share has remained stable at 24 percent.
At the same time, the lack of applicants has declined, and other reasons have become slightly more prominent as businesses’ primary hiring challenges. Among those has been an increase in difficulty filling jobs because of the work location. This challenge tends to occur in rural areas of the state. More businesses have also reported difficulty filling job openings due to a lack of affordable housing in the area – particularly along the North Coast, in Central Oregon, and in the Columbia Gorge.

Conditions Differ by Sector

During the first three quarters of 2019, unfavorable working conditions was the primary hiring challenge for a majority of difficult-to-fill vacancies in private education services (57%) and natural resources and mining (52%). By volume, the sectors with the largest number of vacancies with unfavorable working conditions included health care and social assistance (1,300), leisure and hospitality (940), retail trade (770), and natural resources and mining (750).
Within those sectors, there were 11 occupations with at least 100 difficult-to-fill vacancies at any given time with employer-reported unfavorable working conditions. In natural resources and mining, businesses’ comments related to these vacancies reflected difficult physical working conditions and the seasonal nature of logging and other forest-related jobs. Health care vacancies with unfavorable working conditions for personal care aides and nursing-related occupations reported on-call or less desirable work shifts. In retail trade, employers mentioned variable shifts or hours for sales and cashier jobs. Businesses with leisure and hospitality job openings in the unfavorable work conditions category mentioned a mix of seasonal and hard work, and night or weekend shifts among their primary hiring challenges.
Wage Considerations

Wages may be another working condition to consider, as higher pay might encourage applicants reluctant to take on temporary, overnight, or physically hard work. On average, vacancies where employers reported unfavorable working conditions offered starting wages of $16.84 per hour in the first three quarters of 2019. That’s roughly two and a half dollars less per hour than all difficult-to-fill vacancies ($19.42).

In retail trade, the vacancies with unfavorable working conditions did report average starting wages nearly $2 per hour above the rate for all hard-to-fill vacancies industry-wide. In natural resources and mining, the average was nearly the same, at roughly $18 per hour. In leisure and hospitality, job openings with unfavorable working conditions averaged $1.75 per hour less, and in health care the difference topped $3 per hour. Bear in mind, we shouldn’t necessarily expect vacancies such as personal care aides or nursing assistants to look like the all-industry average for vacancies, difficult-to-fill or otherwise. In health care, for example, averages can be pulled significantly higher due to the prevalence of doctors and registered nurses, along with other occupations requiring bachelor’s or advanced degrees.

Full Employment and Hiring Conditions

Oregon’s private employers have reported nearly 53,000 job vacancies at any given time through the first three quarters of 2019. While that’s a decline of about 9 percent from nearly 58,000 job vacancies in 2018, hiring demand is still relatively strong. To date in 2019, the number of job openings looks similar to the levels seen during the strongest job growth in this expansion during 2015 (48,000 vacancies) and 2016 (51,000).

With three years of unemployment rates at or near record lows and continued demand for labor, employers offering jobs with difficult physical or scheduling conditions are increasingly reporting these challenges as the primary difficulty filling vacancies. Offering higher wages, employee perks, or benefits may be strategies to broaden interest in vacancies. Jobs with unfavorable working conditions also tend to require relatively less training or experience. This could open opportunities for workforce development organizations to help connect job seekers amenable to tough physical jobs or alternative work schedules with businesses struggling to fill those types of jobs.

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