Tight labor market keeps employers in some states struggling to hire

The labor force participation rate is at 62.3 percent, one of the lowest in decades.

WalletHub released data on 2022’s States Where Employers are Struggling the Most in Hiring.

The personal finance website compared the 50 states and Washington, D.C. based on the rate of job openings for the latest month and the last 12 months.

Alaska’s employers are struggling the most to find new hires, as well as Wyoming, Montana, Kentucky and West Virginia.

Struggling the least are New York, Washington, D.C., Washington, Kansas and Michigan.

So, why are employers in these states finding it so difficult to fill positions? WalletHub provided expert comments.

“They aren’t meeting their employees’ needs, which in a tight labor market means it is hard to attract and keep workers,” Dr. Steve Striffler, Director of the Labor Resource Center at College of Liberal Arts at the University of Massachusetts, Boston, said in a press release. “It isn’t simply that employers are not paying enough, though that is certainly part of it. What happened during the pandemic is that people had time on their hands to re-evaluate their work-life balance, career paths, and professional goals – and really began to prioritize the quality of their work environment. People became less tolerant of poor working conditions, low pay, and lack of flexibility – and found that they had other job opportunities and weren’t afraid to switch jobs. And some employers have been unwilling to keep up with the changing times.”

Dr. Scott Behson, a professor at Fairleigh Dickinson University, author of The Whole-Person Workplace: Building Better Workplaces Through Work-Life, Wellness, and Employee Support, said that the United States has been operating in a tight labor market for a long time. Part of the problem is that many employees have retired or just dropped out of the workforce during the height of the pandemic.

“The U.S. has also seen a significant drop in legal immigration over the past several years. Demographic trends have also contributed. There are jobs to be had, but fewer people to fill them. Pretty much anyone who wants to work can find a job, and those with valuable skills could likely get multiple job offers. Because of this, employers are ‘one-upping’ each other in terms of pay, flexibility, or benefits…Further, with remote and work-from-home much more possible, many employees are leaving ‘in-office’ jobs for other opportunities, often outside of their local labor market,” Behson said in the press release.

Alan Benson, an associate professor at the University of Montana offered comments on what employers can do to attract and retain employees during this difficult time.

“One of the ways employers can attract and retain workers during this period is to be very clear about the kind of person they want to attract and retain, understand how their demands are differentiated from those of their labor market competitors, and offer the types of pay and work experience specifically tailored to that kind of person,” Benson said. “Employers will sometimes take too narrow a view — for instance, the desire to hire the best person cheaply doesn’t leave much room for strategy. Employers might decide that their business model allows them to offer a high degree of autonomy and work-life flexibility, and so they can custom tailor their pay, work flow, and culture around that amenity.”

Dr. Michael L. Bognanno is Department Chair and professor of economics at Temple University.

“Employers can offer higher compensation and better non-wage conditions of employment. Allowing workers to work remotely is a benefit that can help retain workers who might want to quit in order to relocate. Flexible hours of employment might entice potential workers with small children into employment,” he said.

What do experts think about the imbalance in the U.S. labor market continuing to be an issue throughout the rest of 2022? Will it get resolved sooner?

“The labor market has been tight for a long time now and there will inevitably be some softening. The Fed has been raising interest rates aggressively to fight inflation and these actions are likely to cool the job market somewhat. However, I think it will continue to be a good time for employees and potential employees well into next year. Employers need to adjust to this medium-term reality by better-recognizing employee needs and valuing the whole person,” Behson said.

According to Executive Director of the ’68 Center for Career Exploration at Williams College Don Kjelleren, hiring struggles will continue through this year and further.

“The United States is not the only country facing labor shortages, an inflationary impact on wages, and a lack of skilled workers. These market dynamics aren’t going to go away anytime soon, and skilled workers, wherever they are from, will remain in high demand,” Kjelleren said.