Industry Details for Difficult-to-Fill Job Openings in 2020May 19, 2021 Labor market experiences in 2020 were highly dependent on industry and the timing of business restrictions related to COVID-19. Vacancies reported in 2020 captured snapshots of the employment peak, a deep recession, and the beginning of recovery from the pandemic recession in the last half of the year, with slower hiring late in the fall as virus-related restrictions resumed. To a certain extent, the unique conditions faced by employers in the pandemic have little to do with hiring in a more normal economy that isn’t constrained by business restrictions.
As the jobs recovery continues, and hopefully picks up its pace in the second half of 2021, many employers will be competing for available workers. Some workers sidelined in the pandemic have moved on to other lines of work, as evidenced by the swiftly declining unemployment rate, which has recovered much more quickly than the number of jobs in Oregon. Roles inside businesses have also shifted as we adapted to contact-free services and more virtual work. We don’t know yet how many of these changes will stand the test of time. Thus, our understanding of business needs from prior to the pandemic also may not prove accurate for the post-pandemic economy.
Overall trends in vacancies from the Oregon Job Vacancy Survey are covered in the companion article Characteristics of Job Vacancies in 2020. Topline details about the 2020 difficult-to-fill vacancies and how they compare with the past are covered in Difficult-to-Fill Job Openings in 2020.
Industries with lower barriers to entry had less difficulty filling job vacancies in 2020. Education beyond high school is a requirement for relatively low shares of jobs in leisure and hospitality; retail trade; and management, administrative, and waste services. Low wages in leisure and hospitality and retail trade likely limited the pool of applicants willing to apply for those jobs, when workers could command higher wages elsewhere. Employers requiring experience for their job openings also had a more difficult time finding the candidates they were seeking.
Industry Level Reasons for Difficulty
Health care and social assistance had the most hard-to-fill openings in 2020, and also the most openings overall. More than half of vacancies required education beyond high school and almost two-thirds required prior work experience. Due to the need for particular qualifications, health care had a higher share of difficult-to-fill jobs than the total across industries. Employers cited a lack of qualified candidates for 31% of the difficult openings. The two following reasons, a lack of applicants and low wages, each accounted for 12% of difficult openings. The jobs employers reported most often as difficult to fill included nursing assistants, personal care aides, and registered nurses.
Construction employers reported difficulty filling 75% of their jobs, much higher than the 51% share overall. The vast majority of these jobs required previous experience, and as the industry didn’t suffer huge job losses or interruptions in this recession, at least in comparison with other industries, the competition for qualified workers stayed hot. A lack of qualified candidates was the primary reason for difficulty for 42% of construction openings in 2020. A lack of applicants accounted for another 13%. Jobs most often reported as difficult to fill included construction laborers, electricians, painters, and HVAC mechanics and installers.
Manufacturing also had a higher than average share of hard-to-fill jobs in 2020, at 66%. Three-fourths of manufacturing openings required a high school diploma or less to qualify, but most required previous experience. A lack of qualified candidates and an overall lack of applicants were the most commonly cited reasons, each accounting for 23% of difficult openings. Jobs employers had difficulty filling included production workers, laborers and material movers, and truck drivers.
The hardest-hit industry in the pandemic recession was leisure and hospitality, but the industry still had a lot of job openings on average over the course of the year as they adjusted to repeated changes in restrictions and as warm weather allowed for more outdoor dining and activity. Fewer than one out of 10 difficult openings required education beyond high school, and a smaller share than average required prior experience. Employers were largely seeking entry-level workers, or they had workers waiting out the pandemic to return to their jobs. In 2020, leisure and hospitality businesses told us their greatest challenge in filling job openings was a lack of applicants, at 31%. Another 20% had unfavorable working conditions, which included possible exposure to COVID-19, short shifts or hours, and tough physical labor. Employers said low wages were the reason for 18% of difficult openings. Many difficult-to-fill openings were for maids and housekeeping workers, restaurant cooks, food prep workers, and fast food workers.
While management, administrative, and waste services had about 2,000 hard-to-fill openings in 2020, they represented a lower than average share of overall vacancies, with about one-third of industry vacancies reported as difficult to fill. This is a broad industry – its largest component is temporary help services, and it also includes call centers, travel agencies, janitorial services, and landscaping services. The top reason reported for difficulty was unfavorable working conditions (20%), which included possible exposure to COVID-19, part-time jobs, nontraditional shifts, and tough physical labor. There were many difficult to fill openings for landscaping and groundskeeping workers, sales representatives, and janitors and cleaners.
Retail trade employers reported difficulty filling 40% of industry vacancies in 2020, a lower than average share. The vast majority didn’t have education requirements beyond high school, but retail businesses were seeking workers with experience. With an average wage below $15 per hour for the industry’s hard-to-fill jobs and the virus exposure risks inherent in retail, the top reason for difficulty reported by employers was a lack of applicants for these jobs (29%). Jobs employers had difficulty filling included retail salespersons, cashiers, and light truck drivers (likely for pandemic-related increases in delivery).
Other services includes a wide array of businesses that were heavily affected by COVID-19 restrictions. Salons, automotive and truck repair shops, doggy day-cares, gyms, places of worship, and many more service businesses fall into this category. Businesses reported almost two-thirds (64%) of industry vacancies as difficult to fill. More than three-fourths required previous work experience. Unfavorable working conditions were cited as the top reason for difficulty (21%), followed by a lack of qualified candidates (16%). Top jobs employers had difficulty filling included landscaping and groundskeeping workers, hairstylists, and mechanics for heavy equipment, buses, and trucks.
What Might Employers Expect in Recovery?
In many industries that laid off workers due to COVID-19 restrictions, it was the lower-wage, more entry-level positions that were first to be let go, and also the jobs employers were eager to fill as restrictions eased. So it’s not too surprising that average starting wages in several industries with lots of difficult-to-fill jobs were lower in 2020 than in 2019. As employers ramp up hiring in recovery, the wages they have to offer to gain applicants may be more similar to wages in 2019 than in the unique pandemic year we just endured.
On the worker availability side, shortened school hours, transitional school schedules, and fewer child care slots are keeping some workers home. Concerns over the virus continue to keep some workers on the sidelines, waiting to take their next job. Also, a much higher than normal share of the unemployed remain on temporary layoff, waiting until their employer is able to bring them back to work. These are temporary conditions and worker availability should free up to some extent as the vaccine rollout continues and COVID cases wane.
Employers are facing the added complication of simultaneous recruitment alongside every other employer on the block as capacity restraints are lifted on particular dates. This short-term labor crunch produces a dilemma. In order to serve more customers, businesses need more staff, and in order to get applicants, they need to offer higher wages. This has to introduce complications in terms of retaining current workers as well, if higher-paying opportunities are available doing the same work just a few doors down the road. Once recruitment is happening at higher wages, employers might find it necessary to increase the wages of other staff in order to keep them on board. These problems are piling on businesses that have spent the last year clinging to the hope of recovery, only to find it’s a job seeker’s market on the other side of the pandemic. While driven by temporary circumstances, these employer concerns are very real and could suppress the job recovery to some degree until additional workers are available to fill jobs.