With the labor force participation rate rising to 62.8% in September, WalletHub today released its report on 2023’s States Where Employers Are Struggling the Most in Hiring, as well as expert commentary.
In order to see where employers are struggling the most in hiring, WalletHub compared the 50 states and the District of Columbia based on the rate of job openings for both the latest month and the last 12 months.
New York Hiring Struggle Stats
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Job openings rate during the latest month: 4.80%
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Job openings rate in the past 12 months: 4.60%
- Overall rank: smallest hiring struggle in the country
Expert Commentary
Why do employers have difficulties in filling employment positions?
“It is simple supply and demand. After Covid, several people dropped out of the employment market. For whatever reason, they decided that they did not want to continue working, and if they had the means to exit, they did. This means that fewer workers are chasing the same number of jobs. That means employers, then, have to raise wages or provide other perks if they want to attract workers. In short, it is a buyer market for employees.”
Darin Gerdes – Professor, Charleston Southern University
“There are at least three factors at play: First is high previous turnover, such that managers are forced to spend too much time dealing with hiring, rather than getting things done. It has become a revolving door in some industries. A constant staffing need creates among job seekers a perception that because certain occupations are hard to staff, there must be something bad about the job, which then becomes a disincentive to apply. Second, there is just a significant mismatch between what job seekers currently want in a job/organization, and what organizations think prospective employees want (as well as what they can offer). I do not think companies do as good a job as they could in terms of gauging what is important to their employees. Often it is agreeing on base pay, but also understanding that providing growth opportunities, challenges, job autonomy, work-life flexibility, and benefits are very significant factors that determine job acceptance. And third, I have been reading a lot about companies not being upfront and honest about what the job entails and what it pays. I think companies need to be more transparent about the salary, instead of waiting until the last minute of the recruiting/interview process to show their cards. Should candidates self-select out at this point, that is a lot of unnecessary time and money wasted.”
Alex L. Rubenstein, Ph.D. – Associate Professor, University of Central Florida
What will be the economic impact, if any, of this trend?
“Even though wage growth is only a small contributor to overall inflation, a looser labor market should continue to decelerate wage growth and limit the labor market's contribution to the high rates of inflation going forward. At this point, it looks like the labor market is helping manifest the “soft landing” that economists hope for, but oil markets, political uncertainty, and global tensions are likely to be much larger drivers of our economic future.”
Joshua M. Congdon-Hohman – Associate Professor, College of the Holy Cross
“We are seeing it now, in the form of increased labor strikes. But even if that is not the case in all industries, it is a natural path in which labor shortages lead to more turnover due to overworked staff. Some companies might need to change their operating hours or pursue short-term fixes of hiring less-qualified individuals. Taken together, this results in frustrated customers who will start to frequent those establishments less. This is speculation now, but I could envision more stores closing and thus further concentrating business into fewer retailers, which predominately use an online model with outsourced customer service.”
Alex L. Rubenstein, Ph.D. – Associate Professor, University of Central Florida
In your opinion, will this imbalance in the labor market continue to be an issue throughout all of 2023 or will it get solved faster?
“I think it will persist. There needs to be some recognition that the pool of job seekers has fundamentally changed. There is a lot of untapped talent – one study estimates 16 million potential workers without college degrees, but possessing the relevant experience for high-wage work. Once more, eliminating outdated licensing requirements would also play a complementary role here.”
Edward J. Timmons – Director, Knee Center for the Study of Occupational Regulation; Service Associate Professor, West Virginia University
“I believe the tight labor market will continue to loosen through 2023 and possibly swing to a bearish labor market for workers at the end of the year as high-interest rates and a potential government shutdown have an impact on demand in the larger economy. The outlook for labor in 2024 may be very different than it was in 2022 and 2023 as the bargaining power may strongly shift back to employers.”
Joshua M. Congdon-Hohman – Associate Professor, College of the Holy Cross