Demand still high for workers, especially in these industries

The demand for labor and the ability to fill vacancies remains high. A new report from OnlineU shows that job vacancies stood at more than 11.5 million in March 2022 compared with 6.2 million two years earlier (prior to the pandemic).

The accommodation and food services subsector, and the health care and social assistance subsectors have the highest job vacancy rates right now, at 9.9% and 9%, respectively. The Great Resignation has something to do with the high rates as employees are leaving their jobs at a rate of 3% in March 2022 versus 1.8% two years ago.

On the last business day of March 2022, the job vacancy rate was 7.1%, a historical peak, the Bureau of Labor Statistics (BLS) said in its most recent Job Openings and Labor Turnover report, published in May. Quits were also at a historical high of 4.5 million in March, with a “quits rate” of 3%.

Compare that with the same BLS report from two years earlier. On the last business day of March 2020, the number of job openings declined by 813,000 to 6.2 million vacancies – a vacancy rate of 3.9%. Meanwhile, the number of quits dropped by 654,000 to 2.8 million. Workers that had jobs wanted to hold onto them, resulting in a quits rate of 1.8%, the first report says.

Besides the people looking (or not) for work, vacancy rates have changed as well. Just prior to the pandemic in March 2020, overall job openings were declining compare to February of that same year. This past March, vacancies were up 200,000 from February.

The sectors with the most ground to make up in terms of getting vacancy rates to pre-pandemic levels are in the leisure and hospitality, mining and logging, manufacturing, and education/health and social assistance industries. Average private sector vacancy rates across the board were 3.9% in March 2020 and were 7.5% in March 2022.

With a 5.8-percentage point increase in its vacancy rate since March 2020, the leisure and hospitality industry remains the sector with most ground to gain if it’s to close the gap between a current vacancy rate approaching 10% and its pre-pandemic rate of fewer than 4%. It’s no secret that with lockdowns, limited travel options and country vaccination rules, the hospitality sector was hardest hit and still finds itself in a slow recovery mode (although travel has picked up greatly since mandates have been lifted).

Connected to travel and hospitality are the arts and entertainment sectors, which still have a very high vacancy rate. It’s the accommodation and food services part of this sector that took the biggest losses, and has the farthest to go to return to “normal.” This is a subsector that was hit hard by the sharp slowdown in dining and travel in the first year of the pandemic.

Mining and logging had the second-highest gap between its vacancy rates in March 2020 and March 2022. That leaves the sector with 40,000 jobs to fill as of this March. Lumber companies, in particular, slowed their activities at the beginning of the pandemic, anticipating decreased demand for their products and being wary of having to sit on piles of unwanted inventory.

Even though many Americans began using savings to do home renovations and improvements, many lumber companies had already let go of employees and had trouble rehiring them for the rush of lumber demand that followed.

It’s fair to say that the 11.5 million unfilled jobs are a positive for students, recent graduates, or anyone looking for a job. It means that every industry is looking for people to join. For some companies in certain industries, failing to attract enough people to meet hiring goals would make it difficult for them to operate or survive – hotel workers, restaurants etc.

What this ultimately means is that workers’ negotiating power has greatly improved. Companies are working hard to hang on to their talent, so one doesn’t even need to switch jobs to extract some concessions from an employer. With so many employers all but desperate to fill positions, now is an excellent time to be actively looking for a job and aggressively negotiating for the best possible compensation, benefits, and perks.