Skip to main content

Besides higher wages, what else can businesses do to address labor shortages?

Last week, COVID-19 cases in the U.S. hit their lowest rate since September. Deaths were also at the lowest point since April last year. Moreover, close to 60% of adults in the U.S. have already received at least one dose of a vaccine. The Centers for Disease Control and Prevention (CDC) announced on May 13 that:

  • People who are fully vaccinated no longer need to wear face covers or maintain a social distance in any setting unless they are required to do so by laws or specific guidelines.
  • Fully vaccinated people can also refrain from testing following a known exposure (with a few exceptions).

Some businesses, such as Starbucks, Costco, Trader Joe’s, Walmart, Sam’s Clubs, Universal Studios, and Disney parks in Florida, have decided to follow CDC’s new guidelines. Fully vaccinated people are no longer mandated to wear a mask in their establishments.

The U.S. economy is recovering, with highest job gains in the leisure sector

Under a much-improved situation, people are ready to travel and go out again, signaling the recovery of the U.S. economy. The U.S. economy is now operating at 89% of its pre-pandemic level.

Out of all industries, the leisure sector recorded the highest percentage growth of jobs in the 12-month period between March 2020 and March 2021 at 61.9%, significantly higher than retail, with the second-highest gain at 14.9%. Within the leisure sector, the noteworthy gains include:

  • Gambling & Amusements: 81%
  • Restaurants & Bars: 68%
  • Performing Arts & Spectator Sports: 31.9%
  • Accommodation: 29.2%
  • Museums: 6.7%

Job postings in the recreation and travel industry exceeded the February 2020 level

Using job postings on LinkedIn in February 2020 as a reference point, the recreation and travel industry reported the biggest decline in openings in June, at negative 60%. March 2021 was the turning point when the industry recorded a positive percent change in postings. There were 15-19% more postings in April/May of this year than in February 2020.

Businesses are struggling to find workers to meet the growing demand

When everyone is hiring to meet growing demand and prepare for the summer, many are struggling to fill job openings. How bad is the current labor shortage situation?

restaurant owner in New York City, for instance, posted a job listing for a host/hostess position at $30 an hour but received no response for two weeks. A year ago, the same restaurant would have received “hundreds and hundreds of resumes” already for the same position paying $20 an hour.

McDonald’s aims to hire 10,000 new employees in three months and plans to increase wages by 10% for over 36,500 employees in its 650 company-owned restaurants. The restaurant chain also encourages the owners and operators of its franchises to do the same.

McDonald’s was just one of the many businesses that recently boosted wages for their associates. Some also offer sign-on bonuses for new hires.

Besides higher wages, what else can be done?

When every company is offering a higher wage and even sign-on bonuses to new hires, businesses must do more to respond to the labor shortage challenge. In the short-term, I recommend businesses:

  • Call previous workers and offer them a raise if they return to work.
  • Ensure employees that they will work in a safe environment.
  • Offer paid internships to high-school and college students.
  • Present career advancement opportunities to the interns, new hires, and current employees, convincing them they have a future in the company.
  • Highlight training opportunities to the candidates striving to grow.
  • Redesign existing jobs with flexible schedules and part-timers.
  • Restructure the service process by introducing more easy-to-implement, self-service components.
  • Communicate with the customers clearly about the labor shortage issue, allowing them to appreciate the service they receive and feel more tolerant of slower service.
  • Use dynamic pricing strategies to smooth uneven demand.

For the long-term, I suggest businesses:

I am sure there are more remedies and creative ideas that can help businesses solve the labor shortage challenge. What other recommendations will you make? Please share your suggestions with us.

Note: This post was first published on; The picture was downloaded from The Wall Street Journal website. 


Popular posts from this blog

Yammer: A Social Networking Site Exclusively for the Workplace

Effective internal communications among employees are related to some desirable organizational outcomes, such as robust morale, a clear vision, low turnover, and high employee engagement. The question is what platform can serve the purpose. This ABC News video introduces “ Yammer ,” an exclusive internal communication tool for companies. A user must use a valid company e-mail address to sign up for an account. Once an account is validated, the user will be led to the company page that is pretty much like a Facebook page. The difference is that only the users whose e-mail addresses share the same domain can see the wall and communicate with each other. I have no question about whether Yammer could be a useful internal communication tool for companies, but I just wonder: how many social networking sites do people need for communication? Why people have to “create” so many platforms or channels for “effective communications”? To many people, Facebook is only for “friends,” whe

Can leisure and work-from-home demand stimulate extended-stay hotel growth beyond COVID-19?

The lodging industry is   struggling   to fill the empty rooms in 2020. For months, U.S. hotels are running at an occupancy of 50% or lower.     Not every segment   suffers the same impact from the pandemic, however. Demand for   home-sharing  facilities had already bounced back over the summer. Airbnb reported a higher booking than last year. Marriott’s home-sharing arm is also doing well, seeing a sevenfold increase in booking over last summer.     Similar to what a residential rental or home-sharing facility   offers , guestrooms in extended-stay hotels also feature a full-size kitchen or a kitchenette. Extended-stay hotels are designed for travelers who want to stay at a “home” when away from home. A guestroom at the Residence Inn Miami Sunny Isles Beach   Extended-stay hotels vs. home-sharing facilities     Because COVID-19 is primarily transmitted through direct or indirect human contacts, people are highly encouraged to avoid unnecessary human interactions, leading to more   con

Will restaurants of the future still need a dining room?

It does not seem the coronavirus is leaving us soon, although we have seen good   progress in developing the vaccine . In recent weeks, many places reported   a surge of new infected COVID-19 cases . Some even resumed   lockdowns   and the mask-mandate order, forcing restaurants to   shut down indoor dining   services again.     As a short-term remedy, restaurants immediately shifted their offering to   curbside pickup and delivery  services. Meanwhile, restaurants are testing new concepts to embrace the   contactless self-service  trend for the future. Here are some examples,     Chipotle opened its first digital-only restaurant     The new prototype, known as the   Chipotle Digital Kitchen , debut in Highland Falls, NY, earlier this month. Different from the traditional Chipotle restaurant, the Chipotle Digital Kitchen features:     A lobby designated for pickup services through off-premise orders.   A see-through kitchen, allowing customers to see, smell, and hear what is going on b