There are millions of jobs, but a shortage of candidates

4 million left their job in April in the US 1:46

(CNN) -

There is a problem at the James Hook chicken farms and it has nothing to do with poultry.

PD Hook, a hatchery that supplies a third of the chickens sold in the UK, should keep moving forward as the economy comes back to life.

But the company is short on about 40 farm workers, double the usual number of job openings.

At the same time, there is a serious shortage of truck drivers, making it difficult for PD Hook to transport its birds to factories where they are cut, portioned and packed.

And when the chickens arrive, there is also a shortage of staff at the processing plants.

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"It all came together at a time when everyone wants more of everything," said Hook, the company's managing director.

It's a perfect storm.

A problem in various economies

The issues are not unique to PD Hook, your industry, or the UK.

Around the world, airlines, restaurants and hotels are unable to fill job vacancies, hampering efforts to capitalize on the recovery in consumer demand.

Many workers who went home when the pandemic struck have not returned to shipyards, factories or construction sites, affecting production and paralyzing projects.

Even Michelin-starred restaurants and Wall Street banks say they can't hire enough people to meet their needs.

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A waiter cleans a restaurant table before it reopens in Berlin, Germany, on May 21, 2021.

In the United States, Republican lawmakers have blamed rising unemployment benefits for fueling the problem, while leftist economists propose a simple solution: pay higher wages. In the UK, lobbyists are urging Prime Minister Boris Johnson's government to review post-Brexit immigration rules so that Europeans can fill vacancies, while leaders from Singapore and Australia are under pressure to relax immigration restrictions. travel so that migrant workers can return.

What is becoming increasingly clear is that after the coronavirus pandemic caused an unprecedented impact on the global economy, putting tens of millions of people out of work and displacing many others, the job market will never be the same again. .

Skilled workers are stuck in the wrong places.

Others have retired early, are skeptical about going back to work in the face of persistent health problems, or have difficulty obtaining reliable child care.

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The economy emerging from the crisis also looks different than the one that preceded it. Demand is higher in some sectors and lower in others. Workers have left front-line jobs in some industries for positions that are less exposed to the coronavirus, which will not be affected by new closures or offer a better work-life balance. In the United States, a record four million people left their jobs in April, including 649,000 retail workers. A recent EY survey of more than 16,200 employees worldwide found that more than half would consider ditching their job after the pandemic if they weren't offered enough flexibility about where and when to work.

"This is a time of change," said Erica Groshen, who served as commissioner of the US Bureau of Labor Statistics from 2013 to 2017. "It is not so much that it is a general labor shortage, but a time of structural changes [for the economy] ».

'The challenges are enormous'

Around the world, companies are raising a similar concern: They need workers.

They need them fast.

And they can't always find them.

The United States posted a record 9.3 million jobs in April.

The UK saw advertised job openings rise 45% between the end of March and mid-June, according to Adzuna, a job search engine.

Research group IHS Markit reports that European Union companies are experiencing staff shortages as business grows at the fastest pace in 15 years.

"There is definitely a shortage of job seekers," said Andrew Hunter, co-founder of Adzuna.

"You have all these jobs on the market, but no one is really applying for them."

The problem is particularly acute in the hotel industry.

Jack Kennedy, UK economist at Indeed job site, said that job openings in food preparation and services soared 507% between the end of February and early June, and that 'the availability of candidates has not followed rhythm".

Darden Restaurants, which owns the Olive Garden, Chipotle and McDonald's chains, is raising wages in a bid to attract new employees.

Laura Harper-Hinton is trying a different approach to fill 150 openings.

His London restaurant chain, Caravan, has started offering referral bonuses to customers.

"The challenges are enormous," said Harper-Hinton.

It's not just about restaurants and cafes.

The UK, for example, also needs tens of thousands more truckers, as well as butchers in meat processing plants and workers on construction sites.

Truck drivers cross a transport truck parking lot in the Port of Dover on June 1, 2021. Almost a third of UK logistics companies expect to face truck shortages this year, with 10% saying the problems hiring represent an "extreme barrier" to recovery from the pandemic.

Iain McIlwee, director of the trade group representing UK companies involved in the installation of ceilings, walls and cladding, said more than 60% of members are concerned about staffing during a busy summer.

Where are the workers?

There are many reasons why companies cannot find enough workers to fill open positions.

But one item is pretty straightforward: there is a location mismatch.

The pandemic unleashed a massive movement of people leaving cities as jobs were cut and the advantages of urban life evaporated.

Not everyone has returned.

Many students who would normally be hired for hospitality jobs in cities like New York or London still live at home, while others are considering permanently moving out of urban centers.

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The uneven pace of loosening coronavirus restrictions has encouraged some workers to move to new places.

Sandra Warden, CEO of Dehoga, which represents Germany's hotel sector, said the industry lost workers in Austria or Switzerland, where restaurants reopened much earlier.

Tight limits on international movement are also affecting places like Singapore, where migrant workers make up about 38% of the workforce, according to Nilim Baruah, a migration specialist who focuses on Southeast Asia at the International Labor Organization.

Last month, Singapore's Ministry of Manpower acknowledged that the city-state "has not been able to adequately replace those who left Singapore" due to border controls aimed at stopping the spread of COVID-19.

Entry from South Asia came to a complete halt in May.

A migrant worker works at a construction site on May 29, 2021 in Singapore.

Sembcorp Marine, a Singapore-based company that operates shipyards, said earlier this month that it is looking at new recruitment strategies.

He said that stricter border controls have "affected the execution and scheduled completion" of some projects.

"Employers have been accepting workers annually," Baruah said.

"That deployment could not be carried out due to movement restrictions."

Border controls hinder

Australian companies are also complaining about the shortage, partly attributable to strict border controls.

The Australian Bureau of Statistics said last week that 27% of Australian companies "have a hard time finding suitable staff."

According to their survey, 74% cite a lack of applicants, while 32% point to border closures.

Some of the stress may be temporary.

Migrant workers facing limited home employment opportunities are expected to return to magnet centers like Singapore as vaccination rates rise and restrictions eventually ease.

The same goes for more skilled workers who may be putting off moves.

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But in some places, the shortage of workers could be more unmanageable. At the end of 2019, there were at least 2.3 million EU citizens working in the UK, according to estimates by the Office for National Statistics. But when the pandemic struck, many went home, and since then the UK government has introduced new visa rules that make it difficult for these workers to enter the country. (Also, recent data indicates that the actual number of EU citizens working in Britain may have been much higher.)

"Since Brexit, a lot of people have returned to their home countries and we are not getting new people to cross again," said Hook, who runs the hatchery business. He said PD Hook has had to cut production by 10% to help meat processors deal with the problem.

Workers hired closer to home could theoretically fill some of the vacant positions.

But training won't happen overnight, especially after COVID-19 disrupted on-the-job learning.

The Organization for Economic Cooperation and Development estimated in a recent report that workplace training opportunities in member countries declined by an average of 18% "during widespread closures."

The UK Road Transport Association, which says the industry has lost 15,000 EU drivers since January, had to cancel 30,000 test drives last year due to social distancing.

Big changes underway

The effects of the dislocation should wear off over time, as should other factors contributing to the worker shortage, including pandemic-era benefits that may keep some on the sidelines, efforts to find child care, and concerns. on the exposure of vulnerable family members to covid-19.

But the pandemic has fueled bigger changes in the job market as people reconsider what kinds of jobs they want to have and under what conditions.

That is causing a reassignment of workers between industries that could have long-term consequences.

According to Warden of Dehoga, many hospitality workers in Germany have switched to employers less likely to have to close in the future, such as grocery stores like Aldi and Lidl.

Others have taken jobs in logistics delivery centers, which have needed more workers thanks to the explosion of online shopping.

"We know from our members and also from employees that many of them are waiting to go back [to work], that they will be happy to go back to work in restaurants and hotels, but we also believe that there are employees who will not return," Warden said. .

They found other jobs.

A woman vacuums a hotel corridor on May 31, 2021 in Hamburg.

Since June 1, Hamburg hotels have been able to welcome guests at 60% capacity again.

A January survey of more than 31,000 global employees commissioned by Microsoft found that more than 40% were considering leaving their employer this year.

People are also starting their own businesses.

In the United States, 2.5 million new business applications were filed in May 2021.

For many people, the most important thing is the working conditions.

“Right up there with the money is… the job situation and the dynamics,” said Allison Hemming, CEO of New York-based recruiting firm The Hired Guns.

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New conditions

Some people who left the job market or were forced to leave the job market when the coronavirus lockdowns hit may never return.

An estimated 1.1 million older workers left the U.S. workforce between August 2020 and January 2021, according to The New School's Schwartz Center for Economic Policy Analysis.

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Even before the pandemic, economists and lawmakers were concerned about demographic changes in the coming decades, noting that there would not be enough younger workers to replace older retirees.

Last month, China said it will allow couples to have up to three children, an attempt to address falling birth rates that could affect its rapid economic growth.

In a report earlier this month, the Center for Global Development said that there will be 95 million fewer people of working age in Europe in 2050 than in 2015, and that neither automation nor increased participation by women or Older workers in the workforce will close the gap.

Instead, the region should focus on boosting immigration, potentially from Africa.

Key to recovery

How quickly people return to the workforce and the jobs they choose to fill will determine how the broader recovery unfolds.

This is because the employee shortage could lead to a sharp rise in wages, which was hit in 2020. The Humanitarian Organization for the Economics of Migration, an advocacy group in Singapore, said migrant workers there generally they do not receive a higher salary and are working 14-16 hour days to complete tasks with fewer people.

In countries like the United States, however, the demand for workers is giving some employees an advantage, allowing them to negotiate better wages, benefits and conditions.

"It's a job seeker market," said Joe Doiron, director of workforce development for the New Hampshire Office of Workforce Opportunity.

“There are incentives that private companies offer for login bonuses, referral bonuses.

They are offering flexible hours.

A recruitment poster is seen in a pub window in Westminster on June 4, 2021 in London, England.

Demand for workers in the hospitality sector has risen significantly after coronavirus restrictions eased, but many companies are struggling to find staff.

But wage growth is also a key component of inflation, which central banks around the world closely monitor.

If prices rise too fast, policy makers will be forced to withdraw support for the economy in the crisis era sooner than expected.

"If this labor shortage persists for a long time, or becomes widespread throughout the economy, you can expect wage growth to pick up, leading to a spike in inflation," said Paul Dales, chief economist at Capital. Economics in the UK.

That could force the Bank of England, along with its peers at the Federal Reserve, the European Central Bank and the Reserve Bank of Australia, to raise interest rates.

Some employers report that they are raising wages to fill vacancies.

Nick Allen, CEO of the British Meat Processors Association, said companies in his industry are paying at least 10% more.

Kennedy, a British economist at Indeed, said wage increases in the food preparation sector have been more modest.

The latest headline data on wage growth appears "generally moderate," according to a Capital Economics analysis of the 19 countries that use the euro, the United Kingdom and the United States.

But Goldman Sachs predicts that the pressure will increase slightly "in the short term."

"It is absolutely crucial and will really define how the economy will perform for the next two to three years," Dales said.

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