The Health Services, Professional and Business Services, Trade, Accommodation, and Food Services industries have the highest numbers of job openings.
The pandemic caused a major disruption in America’s labor force—something many have referred to as The Great Resignation. In 2022, more than 50 million workers quit their jobs, many of whom were in search of an improved work-life balance and flexibility, increased compensation, and a strong company culture.
But a closer look at what has happened to the labor force can be better described as ‘The Great Reshuffle’ because hiring rates have outpaced quit rates since November of 2020. So, many workers are quitting their jobs—but many are getting re-hired elsewhere.
The U.S. Chamber is capturing the trends on job openings, labor force participation, quit rates, and more, for a quick understanding of the state of the workforce in our America Works Data Center.
Read on for an analysis of which industries have been impacted the most. An in-depth look at how the worker shortage is impacting the nation is here. An interactive map tracking the worker shortage across the states is here.
Foodservice and hospitality struggle to retain workers
During the pandemic reshuffling, jobs that require in-person attendance and traditionally have lower wages, have had a more difficult time retaining workers. For example, the Accommodation and Food Services industry has had the highest quit rate since July 2021, consistently above 5%. The quit rate for the retail trade industry isn’t far behind, with rates hovering around 4% over the Winter of 2022. Both industries continue to face quit rates that are higher than the falling national average of 2.5% for January 2023.
The hiring rate has continuously outpaced quit rates. Leisure and hospitality lost 1 million workers in January 2023, but 1.1 million people were hired into the industry that same month. In fact, leisure and hospitality have maintained the highest hiring rate of all industries since November 2020 fluctuating between 6.8 to 9 percent. This is very high compared to the national hiring rate which was 4.1% this past January.
When taking a look at the labor shortage across different industries, the transportation, health care, social assistance, and accommodation and food sectors have had the highest numbers of job openings.
Yet despite the high number of job openings, the healthcare and social assistance sectors have maintained relatively low quit rates. The food sector, on the other hand, struggles to retain workers and has experienced consistently higher-than-average quit rates.
Meanwhile, in more stable, higher-paying industries, the number of employees quitting has been lower.
A closer look at labor force participation
To further understand shifts in the labor force, it is interesting to look at labor force participation across different industries. Some have a shortage of labor, while others have a surplus of workers.
For example, durable goods manufacturing, wholesale and retail trade, and education and health services have a labor shortage—these industries have more unfilled job openings than unemployed workers with experience in their respective industry. Even if every unemployed person with experience in the durable goods manufacturing industry were employed, the industry would fill 44% of the vacant jobs.
Conversely, in the construction industry, there is a labor surplus. There are more unemployed workers with experience in their respective industries than there are open jobs.
The manufacturing industry faced a major setback after losing roughly 1.4 million jobs at the onset of the pandemic. Since then, the industry has struggled to fill job vacancies. As of January 2023, there were 803,000 open manufacturing jobs.
Remote work has changed the game
Some industries have been less impacted by labor shortages but are grappling with how to deal with the rise of remote work. For example, the rise of remote work might explain why there has been less “reshuffling” in business and professional services.
Gallop found that 91% of U.S. workers hoped they could continue working some of their hours from home, and three in 10 workers signaled they would seek new employment if they were recalled to the office.
Since February 2020, the Financial Activities industry has experienced an unemployment rate lower than the national average. And yet, the industry has maintained below-average hiring rates. Between October 2022 and January 2023, 886,000 people were hired into the industry. This is a stark difference compared to the Business and Professional Services industry. Just recently, the industry suffered unemployment rates close to or higher than the national average. Despite this, more than 1 million people were hired into the industry every month this winter.
Two years ago, finance, management, professional services, and IT/telecommunication jobs were expected to have the highest potential for remote work. That was true throughout the greater part of the Pandemic as more than half of traditionally white-collar workers were still working from home part at least part-time in the spring of 2021. This number has been trending downward recently, due in part to the labor market tightening and employers asking to see employees in the office more often.
Employers must still remain competitive to attract and retain talent. Many businesses have embraced remote or hybrid work models and flexible scheduling. Others are helping their workforce navigate childcare, and some are offering innovative benefits. No one solution to industry labor shortages or employee retention exists. Nor are any solutions appropriate for all industries or employers.
The U.S. Chamber of Commerce is proud to lead the business community in identifying the actions employers can take to offer good jobs to Americans. Businesses can increase their hiring pools by removing barriers to entering the workforce by expanding childcare access and “second-chance” hiring and providing opportunities for new and existing staff to be upskilled and reskilled on the job.
Learn about how the U.S. Chamber is driving solutions through the America Works Initiative. For more information on the America Works Initiative contact Jenna Shrove at email@example.com.
Source: USChamber.com ~ By: Stephanie Ferguson ~ Image: Canva Pro