Winter 2022 Difficult-to-Fill Job VacanciesApril 25, 2022 From the extreme job losses in March and April 2020 to the strong job growth of 2021 and so far in 2022, Oregon’s economy has rapidly changed over the past two years. Between changing numbers of COVID-19 cases and pandemic-related government restrictions, Oregonians have been dealing with many unprecedented experiences. Oregon’s businesses are experiencing change too, and their hiring practices are no exception.
Each quarter, 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. This unique survey offers direct insight into how employers are feeling about hiring during this time. The survey is designed to identify employers’ vacancies, which ones they have a difficult time filling, and to get a business perspective on why these jobs may be going unfilled.
Oregon businesses reported over 100,100 vacancies in winter 2022. This follows a record high in summer 2021 of 107,000 and 103,000 vacancies in fall 2021. The number of job vacancies that employers considered difficult to fill also reached a near record high of 71,000 (71% of total vacancies) in winter 2022. A closer look at the survey results shows some of the ways businesses are responding to the need for workers during the pandemic.
Why are Job Vacancies Difficult to Fill?
For each difficult-to-fill vacancy, employers are asked for open-ended responses about their primary challenge filling the opening. Responses are then categorized into 12 common reasons for difficulty. During the past six quarters, the top reason employers gave was either a lack of applicants or a lack of qualified candidates. These were the same top categories given by employers during the pre-pandemic period.
In summer 2020, fall 2020, and winter 2021 a lack of qualified candidates represented more than one out of five of the difficult-to-fill vacancies. In spring and summer 2021 that changed dramatically, and the lack of qualified candidates dropped to 11% and 12%, respectively, of difficult-to-fill vacancies. Rather than having trouble finding a candidate with the proper qualifications, employers were more concerned about the general lack of applications they were receiving.
In winter 2021, lack of applicants was the primary reason for 25% of hard-to-fill vacancies, but in spring, summer, and fall 2021 lack of applicants affected almost half (48%, 44%, and 43%) of these vacancies. This continued in winter 2022, with a lack of applicants affecting 48% of difficult-to-fill vacancies. Low wages also had an increasingly large impact on jobs being difficult to fill. Low wages, lack of work experience, and unfavorable working conditions were among the top reasons for job vacancies being difficult to fill.
In a typical quarter, the 12 difficult-to-fill reasons work well to categorize the responses from employers. But these have not been typical quarters. With the pandemic and corresponding government interventions, employers began citing new pandemic-related reasons causing their vacancies to be difficult to fill. Pandemic reasons can be sorted into the traditional categories seen in the above chart, but to get a better look at what employers were saying about the pandemic and its effect on hiring, we created a customized categorization of reasons specific to the pandemic. The four new buckets are non-pandemic reason; unemployment insurance (UI) benefits; COVID-19; or both UI benefits and COVID-19 being cited. In the fall 2021 survey, employers began to mention vaccine mandates as a reason for difficulty filling positions, so a category was added for that.
Non-pandemic reasons represented 80% to 93% of difficult-to-fill vacancies across the past seven quarters. As the pandemic dragged on, the difference between employers citing UI benefits or COVID-19 as a reason changed. In summer 2020, UI benefits represented 7% and COVID-19 5% of difficult-to-fill vacancies. During this time, in addition to UI extensions and Pandemic Unemployment Assistance benefits being offered to the self-employed for the first time, the extra $600 dollars a week in benefits from the CARES Act was still being distributed. In fall 2020 and winter 2021, responses citing UI benefits dropped down to 4% of vacancies, while COVID-19 increased to 5% and 7%. Winter 2021 was on the heels of a surge in COVID cases. In spring and summer 2021, employers began to cite UI benefits with more frequency. Fourteen percent of spring 2021 and 13% of summer 2021 difficult-to-fill vacancies cited high UI benefits as the primary reason employers could not fill the vacancy.
Although enhanced unemployment insurance benefits ended at the beginning of September 2021, employers continued to cite it as a reason for difficulty filling vacancies in the fourth quarter of 2021 and first quarter of 2022. Four percent of job vacancies were considered difficult to fill because of unemployment insurance benefits in fall 2021 and 2.5% of winter 2022 vacancies. Unemployment insurance continued claims have fallen drastically since the peak in 2020 and are currently at levels similar to the pre-pandemic expansion period.
Employers also began citing vaccine mandates as a hindrance to filling vacancies at the end of 2021. Two percent of job vacancies in fall 2021 were considered difficult to fill because of vaccine mandates, although this reason was not mentioned much at all in the winter 2022 survey.
In winter 2022, the typical job vacancy was a full-time, permanent position, regardless of whether or not the vacancy was difficult to fill, or whether or not the difficult-to-fill status was related to the pandemic. However, there were other differences that stuck out between the groups.
Job vacancies that were not difficult to fill had a lower average hourly wage ($18.14) than those considered difficult to fill for a non-pandemic reason ($20.47) and difficult-to-fill for pandemic related reasons ($19.02).
Difficult-to-fill vacancies (pandemic and non-pandemic related) were more likely to require education beyond high school and previous experience than the not difficult-to-fill vacancies in winter 2022. Twenty-five percent of difficult-to-fill vacancies required education beyond high school, compared with only 16% of not difficult-to-fill vacancies. Sixty-two percent of pandemic-related difficult-to-fill vacancies required previous experience, while previous experience was required for 55% of other difficult-to-fill vacancies and only 25% of not difficult-to-fill vacancies.
Beyond those differences, it seems like the sheer volume of hiring in recent months has had the biggest impact. As COVID-19 vaccines became wildly available, and pandemic-restrictions on business capacity, social distancing, and mask mandates relaxed, consumers began to consume more goods and services. This led to businesses needing to hire more workers at the same time as many other business in town, creating strong competition for workers and allowing those workers more options for employment.
Do Oregonians Not Want to Work?
In winter 2022, 3% (2,900 job vacancies) of job vacancies were considered difficult to fill because “no one wants to work”, according to employers. This was mentioned more often than lack of technical skills, lack of training or certification, or other reasons. This phrase varied slightly, with responses finishing no one wants to work with reasons like “because of government handouts” or “for minimum wage anymore”. Almost half (42%) of these vacancies were in the leisure and hospitality industry.
During the pre-pandemic expansion, employers said very similar things about why their vacancies were difficult to fill, most often citing a lack of applicants or lack of qualified candidates. The phrase “no one wants to work anymore” was a common reason given for why vacancies were difficult to fill. Now, with lack of applicants and lack of qualified candidates still being a major factor in hiring difficulties and the volume of hiring significantly increased, the common thread of “no one wanting to work” is still appearing.
So, do people not want to work? The answer seems unequivocally no. People do want to work. However, those who want to work are mostly already working. More Oregonians are employed or not employed and looking for work (i.e. in the labor force) than ever before. In March 2022, the Oregon labor force reached a record high going back to 1976, at 2,184,000 people. Prior to the pandemic, the labor force reached its peak in August 2019 at 2,095,600.
The volume of unemployed persons, those not currently working but actively seeking work, is low as well. In March 2022, there were 82,700 unemployed persons in Oregon. With over 100,000 job vacancies in Oregon in winter 2022, just in the private sector alone, there are fewer unemployed persons looking for work than there are job vacancies.
The official definition of unemployment excludes certain groups who are sometimes thought of as being unemployed or “underemployed”. Those who would like to work and have actively searched for work sometime in the last 12 months – so-called marginally attached and discouraged workers – are not counted in the official definition because they are not currently seeking work. People working part time who would prefer full-time work are also not counted as unemployed because they are working – albeit fewer hours than they would like.
These groups are included in some alternative measures of labor underutilization. These alternative measures, commonly identified by a “U” in front of a number from 1 to 6, are almost all near record lows. The broadest measure of labor of underutilization, the U-6, which includes not only all unemployed and marginally attached persons, but also those employed part time for economic reasons, is at a record low of 7.4%.
Indeed Hiring runs a job search survey that asks participants about why they are not urgently seeking work. The most common responses for the lack of urgent job searches in January, which are consistent with the responses seen in late 2021, were employed partners, financial cushions, COVID fears, and care responsibilities.
Also hindering the supply of workers is that a lower number of Oregonians are working more than one job. In 2019, prior to the pandemic, there were 118,000 people in Oregon working more than one job. In 2021, there were just 100,000 multiple jobholders.
The problem boils down to a high-demand and low-supply issue, rather than a lack of willingness to work. Most people who want to be employed are employed. Fewer people are looking for work or considered “under-employed”, compared to the record high number of job vacancies. Fewer people are working multiple jobs, and some potential workers are being held back by continued COVID fears and care responsibilities. There is just more demand for workers than there is available supply.
What Can Employers Do to Attract and Retain Workers?
After federal enhanced Unemployment Insurance benefits ended, employers may have expected a sharp increase in job applications. Research indicates there will be some increase in employment from this but there are still other barriers in place to people seeking employment. An article by State Employment Economist Gail Krumenauer discusses in detail recruitment and retention in a tight labor market. She lays out a number of different ways employers have responded to tight labor market conditions. These include raising wages, adding benefits and perks, relaxing experience requirements, and ramping up recruitment intensity. Read more in the full article here.