SNOHOMISH — When Lionel Madriz bought the Double Barrel Wine Bar & Lounge in November, the restaurant came fully stocked — but not fully staffed.
With opening day set for Dec. 4, Madriz advertised on social media and online job boards for servers and kitchen help.
But there were few inquiries. When people did respond, he said they had only one question: How much does the job pay?
Before the current labor shortage, “that wasn’t a question people asked right off the bat, when they applied for a job. They would first try to sell themselves. But now everything is switched,” said Madriz, whose family also owns a restaurant in Livermore, California.
By mid-November, Madriz still had four positions to fill. “I’ve hired one person so far,” he said. His back-up plan? Call in family members to mind the kitchen.
Like other Snohomish County employers, including retailers, manufacturers and school districts, Madriz is facing a staff shortage.
“Now hiring” and “Help Wanted” signs are everywhere you look — in shop and restaurant windows, on virtual job boards and on sandwich boards. It’s gotten to the point the signs themselves are sold out at some local stores.
With more job openings than job-seekers, it’s an employee’s market.
Today, the state and the nation’s unemployment rate is 5% or below, which is considered full employment.
Washington’s unemployment rate dipped slightly lower in October to 5% from 5.1% the previous month. The number of new state jobless claims declined 13% in mid-November from earlier in the month.
Now experts worry the labor scarcity could tap the brakes on economic growth and burden consumers with higher prices and shipping delays.
The crisis has hit home.
Pizza parlors and restaurants around Snohomish County and beyond have scaled back the hours and days they’re open. Wait times for passengers at the ferry docks have gotten longer because of staff shortages. In the Mukilteo School District, a scarcity of substitute teachers has teachers feeling burnt-out and stressed, according to a National Public Radio report. The list goes on.
The old ads don’t work
Innovative Salon Products, a Monroe company that makes salon-only hair care products, discovered that the company’s old help-wanted ads weren’t pulling in the numbers.
Until recently, the firm didn’t post hourly wages in help-wanted ads, said owner David Hanen. But with few applicants, Hanen changed tack. The pay range is now front and center, along with a notice that the manufacturer doesn’t have a COVID-19 vaccine requirement and weekends are free.
By adding that there was no vaccine mandate and weekends off, the company started getting more hits, Hanen said.
“If you’re putting out the same ads that you did a year ago, you’re not going to get applicants,” Hanen said.
Innovative Salon offers health care benefits, a matching 401k retirement plan and cash bonuses. Employees who refer a new hire are also eligible for bonuses.
But new hires and promising job candidates aren’t a sure thing.
“We’re getting ‘ghosted,’” Hanen said. New hires don’t show up for work about 40% of the time, he said.
Keeping employees on the job is yet another challenge, despite the manufacturer’s high score as a good place to work.
“When we ask people what drew them to the company, a lot of them say, ‘Your Indeed rating is one of the highest around,’” Hanen said.
Despite high marks, some employees are only interested in chasing the dollar, Hanen said.
“We had four people quit in the last 45 days because they could get more money elsewhere — an extra $3 to $5 an hour,” Hanen said.
The number of employees who quit their jobs rose to a record high of 4.4 million in September, according to the most recent data from the U.S. Bureau of Labor Statistics.
For Innovative Salon and other manufacturers, it’s a perfect storm. Worker shortage, higher labor costs, supply chain bottlenecks and the rising cost of transportation and raw materials are driving up production costs.
Two key ingredients that Innovative Salon uses to manufacture hair products have doubled in price. Shipping costs are also up. “We’re now paying $3,500 for a 50-foot trailer that used to cost $2,500.” Hanen said.
“Consumers do not realize that 2022 could be a very expensive year,” Hanen said. “Everything is going to be more expensive. It’s going to trickle down.”
Integrative Rehabilitation Group provides hand therapy, post-op physical therapy and athletic training to schools and sports teams, among other services. Based in Mill Creek, IRG operates 38 clinics in Puget Sound, including 10 in Snohomish County.
Lori Stephenson, IRG’s talent acquisition manager, has a similar story to tell about no-shows — new hires and job candidates who don’t show up for the first day of work or an interview.
“Some are accepting positions and not coming to work,” Stephenson said. “Or they’re agreeing to positions, and then we never hear from them.”
According to Stephenson, ghosting and a lower number of applicants is a bigger problem at IRG’s Snohomish County clinics than its King County locations.
“There’s no lack of candidates at our Seattle clinics,” Stephenson said. “We have tons of applicants in Seattle. Maybe because there’s more population or people there don’t want to leave the city or don’t want to drive,” she speculated.
Entry-level jobs pay about $16 to $18 an hour and include benefits, a matching 401k and in-house training programs. “You can move up in the organization and go from entry-level to a certified physical therapist making $80,000 a year,” Stephenson said.
But here’s the rub: The competition among employers to fill entry-level jobs paying $16 to $24 hour is particularly fierce. Local manufacturers and distribution centers are brimming with open positions that offer similar compensation, according to a Snohomish County staffing firm.
“We’ve definitely had to increase our compensation to be market competitive,” Stephenson said.
Even so, IRG, which is opening a new Everett office, is having a tough time filling the clinic’s entry-level positions. “We have an ad on our website. Where we used to get 20 applicants we now get two,” Stephenson said.
Teens to the rescue
Shubert Ho, the owner of seven restaurants — six in Snohomish County, including Salt and Iron, the Market and Fire and the Feast in Edmonds — helped ease this summer’s hiring woes by turning to younger workers.
This summer Ho hired a “record number of high school applicants,” for the first time in decade, he said.
It worked out great, he said. Ho also saw it as an opportunity to introduce a new generation to the hospitality industry.
Also, he began seeing some familiar faces: people who’d migrated back to the restaurant industry from stints as delivery drivers or grocery and warehouse workers — jobs that were especially plentiful during the pandemic.
“There was a mass exodus from the hospitality industry to grocery stores and distribution centers,” Ho said. “They told me those jobs paid well at the time but said it was soul-crushing work.”
At the start of the COVID-19 pandemic, Ho laid off all but 10 of 210 employees.
“We have now grown back to 340 employees,” Ho said.
Ho said the lifting of the state’s eviction moratorium and the end of additional federal unemployment benefits in September helped beef up the applicant pool, Ho said.
“If you’d talked to me earlier this year, I still needed 100 people. Now we could hire another 20 or 30,” Ho said.
Still, his operations are not yet profitable. “I don’t see turning a profit until late 2022,” Ho said. “The restaurant and hospitality industry is still recovering from the massive losses.”
Bonuses — a ‘complete waste’?
Are you in the market for a new job?
If so, it’s a great time to be hunting for one, said Jenifer Lambert, chief strategy officer at Terra Staffing, an Everett-based business that serves Washington, Oregon, Arizona and Colorado.
While the economy has rebounded “quite nicely” from COVID, employers are desperate, Lambert said. That’s good news for job-seekers as many firms are upping the ante.
“We’ve seen significant pay increases at all levels, including entry-level jobs,” Lambert said.
Locally, manufacturers and distribution centers have the greatest number of open positions. Starting pay in those industries typically ranges from $16 to $24 an hour, she said.
Hiring bonuses have become a staple at some firms.
A Monroe cabinet maker is advertising $1,000 hiring bonuses, and the Frito Lay Distribution Center on Merrill Creek Parkway in Everett is offering $3,000 signing bonuses.
“Once upon a time those hiring bonuses were for high level positions. Now they’re being offered to entry-level employees,” Lambert said. “Employers are pulling out all the stops to compete.”
But there’s a catch to offering extra cash, she cautioned.
Bonuses are a “complete waste” unless the pay is competitive, Lambert said.
“A bonus gets want ad views, but that’s about it, Lambert tells employers.
Wages are usually a job seeker’s first concern if the position pays less than $75,000 a year, she said. “You have to post the pay rate or people won’t respond,” Lambert said. “It’s not that $75,000 is a magic number — it’s about being able to support your family or pay the rent.” (A living wage for one adult and one child in Snohomish County is $36.33 an hour, or $75,566 a year, according to MIT’s Living Wage Calculator.)
In October, the number of job openings in the U.S. was pegged at 9.4 million, a historic high.
Meanwhile, workforce participation rates — the number of adults who are working or actively looking for work — is 61.6%, near an historic low. By comparison, the labor participation rate in 2001 was nearly 67%, and it was 64% 10 years ago, according to government data.
A estimated 5 million left the labor force during the pandemic — half of whom may never return, Goldman Sachs Research recently reported.
A big chunk, 3.4 million, were 55 or over. Nearly half of those workers took early retirement or retired and aren’t expected to rejoin the labor force.
Others have abandoned their job searches because of the high cost of child care or the need to care for aging parents, economists say. Still others launched their own ventures. New business starts soared during the pandemic.
Goldman Sachs now predicts that hiring could pick up in January, Lambert said.
There have been some surprises this past year.
Employers expected to see more job applications when special federal unemployment payments — an extra $300 a week on top of state jobless benefits — ended in September, Lambert said.
The surge “lasted about a week, and then it returned to the same as before,” Lambert said.
Lambert is advising employers to pretend they’re job-seekers. “Log onto the job boards and search for the type of job you’re offering,” she said. Then draw a 15-mile radius and note what the competition is paying. That’s what you should be offering, she said.
“I don’t have a single client that doesn’t want to hear about available talent,” Lambert said. “We are placing people as soon as they’re available.”