Wages, unions, and missing workers: Summer's big worries for managers

Soaring inflation. Swelling union membership. Stalling workforce participation. Struggling working parents.

The pandemic might be simmering down, but the powerful forces driving the hiring squeeze aren't.

“When you’re in a down economy, you can post an ad and get 100 candidates,” explains Leigh Walker, producing director for Adecco North America. “Now hiring managers are posting ads and maybe getting 10 to 20 candidates, and they're usually not qualified for the job.”

How to thrive in the fickle market this summer? Read our lowdown on the top trends impacting your workforce.

Workers are still sitting out

The US workforce is still more than two million workers shy of pre-pandemic numbers, yet unemployment is at a record-low in several states. Why? During the pandemic, 3 million workers headed into retirement, working parents experienced persistent childcare woes, and Americans added $4 trillion to their savings accounts (thanks to stimulus checks and decreased spending during lockdown). Despite talk of a 'great return to work,' a recent SHRM survey of sidelined workers found that 18% said 'nothing could compel them' to go back, 17% of respondents 'can't find a job that pays well enough,’ while 27% would return only if their savings ran out. There's some good news, though: the labor participation rate is rising again, but it is down to employers to attract these sidelined workers back into business.

Inflation is still soaring

The harsh reality: Today’s cost of living has the potential to stagnate the economy or ultimately lead to another recession. Currently at an almost four-decade-high, inflation is acting as a hidden tax that's hitting the poorest hardest. Although America's lowest-paid workers saw the most significant wage growth last year, the cost of living increase for the lowest earners was triple that of their wage growth. Rising prices at gas pumps and grocery stores push consumers to cut back on dining out and non-essential shopping, slowing the fragile recovery of bellwether sectors like retail and hospitality. As a result, employers' wage rises don't look so generous from where workers are standing.

Wages keep climbing

Why would employees work in busy factories when they can be paid more in big box stores or live on unemployment paychecks and save on commuter fees? On the heels of record-breaking minimum wage hikes in several states, big box stores are upping their hourly rates to unprecedented levels. Walmart's starting hourly rate now averages at $16.40, while Target is up to $24 in some places. Also, Walmart's spending big bucks on winning over college graduates and truck drivers. Top performers on its management fast-track pick up a starting wage of at least $65,000, while its fleet development program offers starting salaries of up to $110,000 for truckers.

“Some employers just cannot afford to pay more because they don't have the budget or even the ability to compete with larger tech companies,” Walker says. “They need to be willing to hire a candidate who doesn't have industry experience and provide upskilling opportunities and/or extend extra time and energy into training.”

Workers are unionizing

Voices demanding higher quality working conditions have never been so loud. It is not enough to sit and listen, employers must produce change as union efforts are gaining traction. Union membership is rising – 9% of adults say they're union members – and 68% of Americans support labor unions. Even firms like Starbucks and Apple are not immune; their workers are organizing to demand higher pay, better 401(k) matches, and cost-of-living adjustments, among other things. The continued labor squeeze means workers in many areas can leave to find more considerate employers.

Working parents are still struggling

Parents make up 40% of the workforce, however this large percentage of the workforce is not being accommodated. 45% of working parents said they'd experienced discrimination due to family obligations during the pandemic, and 68% had to scale back on work. As the pandemic exposed the lack of support for working parents, working mothers were hit especially hard, with 2.5 million of them leaving the US workforce. And although the latest jobs report revealed that women's workforce participation has almost returned to pre-pandemic levels, working parents are still struggling to cope with the depleted daycare sector. Employers need to devise adequate support and benefits for all working parents and encourage all employees to take time off when they need to care for loved ones.

“It's been an overnight shift almost,” Walker says. “Companies are not in the type of market where they can set heavy boundaries – because it's a candidate-driven market. It's not just changing quarter by quarter, it's changing month by month. That's how quickly it’s been.”

To attract and retain talent effectively through summer and beyond, employers need to adapt to these overlapping and fast-moving workforce trends. At Adecco, we understand today's job candidates and employees, and we can help you with the intel, insights, and tailored solutions you need to thrive.

In our work with employers across the country, we consistently find that those with the most success in attracting and retaining talent are those who own the market in wage rates. Working with Adecco means working with experts experienced in navigating local markets – and free access to invaluable resources like our cost of turnover calculator and optimized pay rate calculator.