Top hiring challenges for 2022: why it's so hard to fill jobs right now (2023)

As we move past disruptive Covid-19-related restrictions, new hiring challenges have emerged. With a record number of job openings and a large pool of qualified candidates who are, or should be, eager to accept job offers, many employers are struggling to fill positions. Why?

An Unprecedented U.S. Labor Market

Demand for labor is historically high. The U.S. had 11.3 million job openings in January 2022, slightly down from a record 11.5 million in December 2021, the U.S. Bureau of Labor Statistics (BLS) reported. A whopping 678,000 jobs were created in February.

So far, the economy has recovered 18.8 million of the 22.4 million jobs lost during the early days of the pandemic, when temporary closures and stay-at-home orders forced companies to lay off or furlough millions of workers. Service industries, such as retail, hotels, restaurants, healthcare and professional services, which were the hardest hit at the beginning of the pandemic, have posted the most gains.

The result is a very tight job market in which job openings outnumber job seekers. For every 100 job openings in January, there were only 60 unemployed workers available, significantly tighter than 84 per 100 job openings in 2019. At the start of the pandemic, in April 2020, there were 490 unemployed people for every 100 jobs.

Although expanded federal unemployment programs expired Sep. 6, there has been no rush of workers into the labor force. Covid-19 concerns, childcare issues (even after schools re-opened), and larger-than-usual financial cushions have dampened job seeker interest. In addition, wages are rising but not enough to offset inflation and temp passive job seekers.

6 TOUGHEST HIRING CHALLENGES FOR 2022

As employers strive to rebuild capacity lost during the pandemic lockdowns, they’re running into some new hiring challenges.

1. The Great Resignation

The Great Resignation, a trend that took off in 2020 and continued throughout 2021, is still in full swing, with 4.3 million people quitting their jobs in January 2022, according BLS data. Last year, almost 48 million workers quit their jobs, an annual record. The hiring rate is higher than the quits rate, indicating that most workers are moving to other jobs rather than quitting the labor force.

2. A Growing Divide

Despite a record number of job openings and shortage of workers, employers continue to favor candidates with several years of experience and those who are available to work odd hours and willing to work on-site.

Workers, on the other hand, are seeking higher salaries, more flexibility (including flexible schedules and remote work options) and safe work environments. About 55% of job seekers on ZipRecruiter are seeking jobs that allow them to work from home, citing workplace safety concerns and childcare or family care needs.

This mismatch in priorities has created yet another post-Covid hiring challenge. Employers can’t fill their open positions, and job seekers can’t find jobs despite applying to numerous positions online.

So while the unemployment rate has gradually dropped to 3.8% in February 2022 from a 72-year high of 14.8% in April 2020, the number of long-term unemployed people (out of work more than six months) stands at about 2 million, BLS reported.

3. Great Changes and Great Expectations

Job duties and work procedures in certain jobs and industries have changed considerably since pre-pandemic times. For example, to cope with staff shortages, some bars and night clubs have resorted to pre-mixing cocktails in batches to save time. This trend works against experienced bartenders.

Ironically, however desperate employers are to find workers, many are unwilling to adjust their ways and expectations, refusing to raise wages to competitive levels and placing additional demands on employees, such as new on-call schedules.

Nevertheless, the tables have turned. Before the labor market shifted, employers would ask job candidates, “What makes you a good fit for this company?” Now, it’s the other way around: “Let me tell you why our company is a good fit for you.”

4. Robots Snub Promising Candidates

In spite of it being a job seeker’s labor market, many candidates cannot find a job. Blame the robots.

Seeking to streamline their job application processes, more companies are using automated screening systems that exclude candidates who are not a near perfect fit “on paper.” According to a Harvard Business School study, nearly half of employers say they automatically reject candidates who have not worked in more than six months, regardless of the circumstances.

Job seekers apply to job postings assuming that a human being will read their applications and resumes. That’s usually not the case these days. More than 90% of major employers are using automated screening systems to process job applications, Harvard Business School reported.

These systems use algorithms that can weed out unqualified and qualified candidates. Even using a wrong word or not using the exact right ones can eliminate a promising candidate. Consequently, despite having college degrees and decades of experience in suitable roles, many candidates are getting rejected within hours of filling out online job applications.

5. Retaining Top Performers

At a time when hiring has become so difficult, employers should focus a bit more on retaining their good employees. This requires examining their corporate culture, compensation packages, perks and company policies from the perspective of retaining, rather than just attracting, employees.

One popular retention effort is to conduct “stay” interviews as a preventative step to stop their best talent from quitting. These informal check-in conversations take place every few months to discuss anything that could prevent employees from thriving at work.

6. Low Wages Turn Off Job Seekers

The No. 1 reason businesses struggle to fill open jobs is that wages are too low, according to a survey of more than 3,000 hourly workers conducted by employer payment platform Branch. Fear of exposure to Covid-19 at work came in second with 46% of the vote.

Sixty-eight percent of the employees surveyed agreed that people can earn more from unemployment benefits and stimulus checks than from working for the retailers, hotels and restaurants that are desperate for workers.

Workers Likely to Have Upper Hand in 2022

How long can this superheated job market last? The short-term outlook for the labor market suggests that workers are likely to continue to have considerable bargaining power in 2022. Even when more job candidates enter the labor market as Covid-19 concerns subside and childcare options increase, demand for workers seems likely to continue to outpace supply for the rest of the year, Indeed Hiring Lab reported.

Sources: U.S. Bureau of Labor Statistics, Center on Budget and Policy Priorities, Bloomberg, Forbes, Reuters, Washington Post, Harvard Business School, Trading Economics, Indeed Hiring Lab, CNN, US News & World Report, GoBankingRates.

Autor: Franco Mondo