Area staffing agencies: Market faces ‘tremendous wage pressure’

“In the last few years, especially in Northern Nevada, there have been more jobs than there are people to fill them because we’ve had so much industry come to this area,” notes Celeste Johnson.
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By Kaleb Roedel

Sunday, August 1, 2021

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A year ago, employers were furloughing and cutting staff. Now, many are desperately looking for more.

The rapid recovery in some pockets of the labor market — especially in the food and hospitality sectors — has been good news for jobseekers angling for higher wages.

But many people out of work have chosen, at least for now, to stay at home while millions of new jobs are created across the country, and that’s creating challenges for not only short-staffed businesses, but also staffing agencies, which work to match firms with potential hires.

In Reno-Sparks, even before the pandemic, finding enough qualified people to place into open jobs was an issue, said Celeste Johnson, CEO of The Applied Companies.

“In the last few years, especially in Northern Nevada, there have been more jobs than there are people to fill them because we’ve had so much industry come to this area,” Johnson told the NNBW in early July. “As best we can tell, here in Reno-Sparks, we have 25,000 job openings. And we have 9,000 people on unemployment. The numbers don’t add up. Gone are the days when a company can call us and say, ‘Hey, I need 20 people,’ and we say, ‘Sure, there’s a bench of 20 people.’”

As a result of the mismatch, there is “tremendous wage pressure” in the labor market, Johnson said.

As an example, just two years ago, many entry-level wages in warehousing hovered at $13-$14 per hour, with background checks and drug screens included in the hiring process, Johnson said.
Now, many employers in that sector are not only offering $17-$18 an hour, but they’ve removed background checks and drug screens “just to get people,” said Johnson, adding: “And we still couldn’t get enough people.”

That problem was compounded during the pandemic. Waves of layoffs last spring led to record-setting unemployment rates, which at one point climbed to 30% statewide, and 20% in Reno-Sparks.

When the economy reopened and jobs became available, some of those people opted to stay — and have continued to stay — on unemployment benefits.

Under relief bills passed by Congress, those receiving jobless benefits get an additional $300 a week on top of regular state benefits. In Nevada, the maximum benefit is set at $469 per week. At that rate, an unemployment recipient would earn better than the equivalent of working full time at $19 an hour.

Johnson pointed to other reasons why many can’t or won’t go back to work.

Some people with children have found it difficult to work outside the home, a lingering effect from school closures and child-care centers reducing capacities or going under.

Some who are out of work don’t have the skills needed for jobs available or are unwilling to switch to a new career. Others say they aren’t working for fear of getting or spreading COVID-19.

“There is a workforce sector out there that just went, ‘I’m out for awhile,’” Johnson said. “It could be fear — there was a lot of COVID fear — or it could just be a matter of they’re only going to work when they absolutely have to.

“And all of that has obviously impacted staffing companies and a contingent workforce. And I think it’s going to continue to be a real problem.”

Since expanding to Reno in 2011, IntelliSource has provided more than 12,000 jobs to the area’s workforce as of June 2021, says Kadee Holt.

‘A CANDIDATE MARKET’

The worker shortage is leaving especially wide gaps in the restaurant and hospitality markets, said Kadee Holt, VP of marketing and innovation at IntelliSource, a Denver-based outsourcing agency with a branch in Reno.

“We saw a decrease in interest in the hospitality jobs that are interacting face-to-face with people and more hands-on,” Holt told the NNBW. “But then there was an increase in interest in remote work. There was a paradigm shift that’s occurred in the last 12 months in the types of jobs that people were looking for.”

Since expanding to Reno in 2011, IntelliSource has provided more than 12,000 jobs to the area’s workforce as of June 2021. The firm places candidates in a wide range of industries, but it has a focus on hiring for manufacturing and warehousing companies in fast-growing Reno-Sparks.

Holt said that, in the last five months, there’s been a 28% increase in unique competitive job postings in the Reno market, and an 8% increase in the median salary.

“Those two things have made it more of a candidate market — more people just have the choice of jobs right now,” Holt said. “The demand for jobs and the supply of candidates has taken a shift in the last five months. All of a sudden you had more jobs available than candidates available. Historically, across the last five years, you’ve always had more candidates than there were jobs available.

“That’s creating a lot of pressure that the job market is seeing right now.”

Meanwhile, for candidates looking for work, they’ve seen the hiring process transformed by the pandemic. Virtual interviews and orientations cut down the time it takes to interview and hire and could broaden the applicant pool to out-of-state candidates.

In other words, recruiting became simpler and quicker.

“I think the long-term effects of that will be that it changed the dynamics of the recruiting process, the hiring process and the onboarding process for a lot of companies,” Holt said. “It forced everybody to explore the virtual environment. I think some of those processes will stick.”

C-SUITE SEARCH SURGES

Another pandemic-related trend that The Applied Companies has seen: an increase in companies calling in need of filling executive-level managers.

“Executive search has really, really, really gone up,” Johnson said. “A psychological impact of the pandemic is a lot of people are ready to make a career change. It shook up the way people think and their willingness to make a leap and do something different. I’ve seen lawyers want to be something else.

“I’ve seen very high VPs say, ‘I’m done with corporate world; I want to work in a small company where I can make a difference.’ And they’re willing to take a different wage for that. It’s really a fascinating time.”

Area staffing agencies: Market faces ‘tremendous wage pressure’

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