NEW YORK (AP) – It looks like something to celebrate: small businesses are placing ‘Help Wanted’ signs as the economy returns to normal. Instead, businesses struggle to fill the jobs, which in turn impairs their ability to keep up with the demand for their products or services.
Owners say some prospective workers are worried about catching COVID-19 or prefer to live on unemployment benefits that are significantly higher amid the pandemic. Childcare is another matter – parents cannot work if they have to take care of their children or homeschool. For some people, a combination of factors decides not to look for work.
When Steve Klatt and Brandon Lapp set up interviews for their restaurant and food bowl business, they were happy when one in ten or fifteen applicants came in.
“The people who do show up all accept that their unemployment is up,” says Klatt, whose business, Braised in the South, is located in Johns Island, South Carolina. The maximum weekly unemployment benefit in the state is $ 626, including $ 300 in federal coronavirus relief; in some countries the maximum unemployment rate is more than $ 700 per week.
Klatt and Lapp need 20 people to run the business well, but only have five staff members. Former chefs, the owners and their wives work in the kitchen and on the truck to keep things going. Klatt and Lapp recently decided to shorten their Sunday hours and close Mondays to give everyone a break.
“The hit at the bottom end will be noticeable, but it’s not worth burning out the few amazing people we have at work,” Klatt says.
Businesses of all sizes are struggling to rent, even with millions of Americans unemployed, and as increasing numbers of people are vaccinated, they are looking forward to a more normal life. A census taken in late March found that 6.3 million did not look for work because they had to look after a child, and 4.1 million said they were afraid of contracting the virus or spread.
But smaller businesses that often cannot pay as generously and offer benefits as larger companies have a harder time.
“A shortage of talent is nothing new for small businesses, but the circumstances surrounding this shortage are quite different,” says Jill Chapman, a consultant at Insperity, a human resources provider.
The National Federation of Independent Affairs found in a March survey among its own members that 42% have job surveys that they could not fill. Owners cited higher unemployment benefits as one factor. And a study released by the National Bureau of Economic Research last month found that a 10% increase in unemployment benefits during the pandemic led to a 3.6% drop in job applications.
“Unemployment benefits allow workers to wait longer before taking a job, which can make hiring more difficult,” said Ioana Marinescu, a professor at the University of Pennsylvania who co-authored the study.
Companies whose work is done indoors – including plumbers, contractors and pest control companies – find that many prospective tenants are afraid of getting the virus on a job. Meanwhile, the demand for their services is greater because houses and apartments have more wear and tear as people spend more time at home.
In Jake Romano, a plumbing industry in Ottawa, Ontario, job seekers are attracted to commercial plumbing work rather than visiting five to ten homes a day. Even when Romano finds a good prospect for his business, John the Plumber, he is often disappointed.
‘We had a very good applicant that I found on Facebook. He agreed to get on board, everything looks good. I was excited, he was excited. Toe, bam! He has changed his mind, ”said Romano, who is looking for two licensed plumbers to add his current staff of ten.
Economist Joe Brusuelas says childcare is another issue that could expand owners’ struggles to find work.
“Until schools reopen and childcare paths are normalized, small businesses in general, as well as food, beverage, leisure and hospitality, will face staff challenges until later this fall,” said Brusuelas, chief economist at consulting firm RSM.
Child care is one of the reasons why the pool of available workers has shrunk dramatically at Let Mommy Sleep, which employs nurses and caregivers to give babies home care and give new mothers a break. Founder Denise Stern says some of her caregivers want to spend the night and sleep during the day, but if they have their own children to care for, that is not possible.
Stern is also troubled by concerns about the virus.
“We can’t hire candidates with second positions where exposure can take place, and honestly, a lot of candidates don’t want to work in a closed environment where we know transfer is taking place,” Stern says.
Stern had to turn things down, as well as the owners of seven Let Mommy Sleep franchises across the country. Stern, who works in the Washington DC area, says her income is half as low.
Revenue dropped by 30% at Filter King in Miami. The demand for air filters is increasing as people work from home and manage their air conditioners more, but owners Mike Jacob and Rick Hoskins need to double their staff of 20 to keep up with orders.
“The unemployment benefits continue and it’s hard to get people off the bank into the warehouse,” says Jacob.
But even if people are willing to work, Filter King is a disadvantage compared to companies that can pay more, says Jacob. He lost staff members and candidates to a competitor funded by a venture capital firm.
Stonehedge Farms, a popcorn maker in Dover, Pennsylvania, increased its hourly wage to $ 13.50 from $ 12 in hopes of attracting more workers, but co-owners Shannon and Anthony Tsonis could not get enough people for the two shifts in the factory. They have 30 staff members and need another ten; the Tsonises and their office staff have to fill in at the factory.
Prior to the pandemic, Tsonis was able to rely on one of three applicants who showed up for interviews. It’s likely to be one in ten.
‘It will make me believe that they are simply applying to meet the (job search) requirements of unemployment, which is frustrating. It’s frustrating because we need people, and it’s frustrating because it’s wasting our time and resources on recruiting, ”says Tsonis.
Seven Sisters Scones, a bakery and cafe in Johns Creek, Georgia, has struggled not only to find staff because of unemployment benefits, but because parents need to be at home with their children, says co-owner Hala Haider. The store has 15 staff members and needs four more.
Due to the shortage, Seven Sisters Scones will not be able to deliver and will be selling in fewer farmers’ markets this summer than usual. And Haider and her co-owner, her sister Farrah, had to turn down new cases. But they are drawing the line to scale down their online business, enabling them to reach customers across the country.
“It’s one thing we do not compromise on – it’s a priority,” says Hala Haider.