PHILADELPHIA (KYW Newsradio) — Since the COVID-19 pandemic, we’ve seen low unemployment rates with a high volume of job openings, many of which are low wage and difficult to fill.
The Federal Reserve Bank of Philadelphia spoke with companies in the leisure and hospitality sector and manufacturing sector in Pennsylvania, New Jersey and Delaware. They found that attracting and retaining people for roles such as dishwasher, housekeeper and cashier meant raising wages and lowering job requirements, and it's having an impact on hiring companies, according to Ryo Tashiro, a senior outreach economist at the Fed.
“Particularly for manufacturing folks, because one of the ways in which they dealt with a shortage in labor was by increasing overtime pay. So that really increased their budget for human resources,” Tashiro said.
Along with budgetary issues, employers were also concerned they wouldn’t be able to provide the level of service or product that is expected. For example, leisure and hospitality firms talked about providing fewer days of operation or fewer hotel rooms.
“Same thing with manufacturing folks, where they might have a few different lines on their production line, but they may have to take out some for a few hours just to focus on the main one,” Tashiro said.
Many of the employers interviewed indicated that the pandemic exacerbated pre-existing hiring and retention challenges. Tashiro said the results of the report show the employers had to make a few tweaks, but that it’s working.
“We heard from — a vast majority of respondents say, one, raise wages. And two, they also said that seemed to be fairly successful in both attracting candidates as well as keeping them.”
But raising wages means someone has to pay for it, so companies were either forced to pass along the costs to the consumer, or provide less services by decreasing hours of operation or quantity of product.
Another big issue in the report was employee burnout, with companies recognizing that many employees are unhappy having to pick up the slack. With that in mind, after hearing from the various companies, the Federal Reserve Bank of Philadelphia plans to release another report reflecting the feelings of the employees.
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