Customers are returning to Colorado restaurants, bars, retail shops and other businesses, but they may not have anyone to take their order and serve them, help them find merchandise or take their payment.
That's because many businesses in the state's service sector are struggling to hire enough workers to handle the increased number of customers and sales now that many COVID-19 pandemic restrictions have been lifted. Business owners report they can't get anyone to respond to their job postings and help-wanted ads, let alone show up for an interview, accept a job and start working.
The Colorado Department of Labor and Employment adopted an emergency rule this week designed to push more people receiving unemployment benefits to return to the job market. The rule will cut off jobless benefits if applicants fail to show up for a scheduled interview or first day of work, which has become a growing problem.
“Of course, refusing to return to work because the claimant earns more on UI (unemployment insurance benefits) is NOT acceptable and could constitute fraud,” a department spokesperson said in an email.
Some states took it a step further: Montana and South Carolina floated plans this week to cut off federally funded pandemic unemployment assistance at the end of June, citing complaints by employers about severe labor shortages, according to the Washington Post.
That means jobless workers there will no longer get a $300-a-week federal supplement to state benefits, and the states will abandon the federal program called the Pandemic Unemployment Assistance Program (PUA) that helped so-called "gig" workers, contractors or self-employed workers.
Colorado Restaurants, hotels, bars and retailers were hit hard by the pandemic and restrictions on capacity — the sectors including those industries lost two-thirds of the nearly 360,000 jobs shed in the first months of the pandemic. While the number of job postings — many in the restaurant, hotel and retail industries — are the highest since the pandemic began, laid-off workers aren't returning to the old jobs in big numbers.
The Colorado Restaurant Association estimates that 70,000-100,000 restaurant jobs lost in 2020 have not be refilled.
“We’ve had hiring issues, it’s been incredibly hard,” said David Farahi, Chief Operating Officer of Monarch, operator of the newly opened Monarch Casino Resort Spa in Black Hawk. “We’ve been trying to hire hundreds of people since November. We’ve had job fairs every month. We have seen there’s a correlation between the number of people who come to the job fair and if people anticipate their unemployment benefits being extended or not.”
Monarch is trying to add 200 more workers to its existing employee base of 700.
The labor shortage is worsening even though Colorado's unemployment rate is more than double its level before the pandemic — more than 200,000 people are out of work and the unemployment rate is 6.4%.
“Consumer demand for goods and services has increased since February/March, and that can be tied back to multiple rounds of federal relief, improving weather, and wider rates of vaccinations among the adult population," Gedney said. "However, while older adults have had vaccination options for a while, vaccinations were not widely available to the 16+ Colorado population until the beginning of April. This could impact the labor supply of industries like restaurants, who rely on a relatively younger population of workers than most industries.”
Hesitant to find work
So why aren't those who don't have a job applying for the more than 150,000 jobs that are listed as open? Officials with the Pikes Peak Workforce Center cite several reasons:
• Some potential applicants for restaurant and retail jobs, especially younger people who haven't yet gotten both doses of the COVID vaccine, are worried about their health and safety around people who may not be wearing masks and staying at least six feet apart in a workplace that might not be well ventilated. Vaccines were restricted to those over 49 years old until early April.
• Applicants with small children may not be able to find child care since some child care centers have closed and most others have reduced capacities due to social distancing guidelines and reduced hours due to a lack of workers on their part.
• Those collecting unemployment benefits are receiving both traditional unemployment benefits, which have been extended several times, and an extra $300 a week included in the last stimulus package, both through Labor Day. Erica Romero, business relations team lead for the jobs center, estimated that can total about $15 an hour, or $2.68 an hour more than Colorado's minimum wage and more than some entry-level restaurant and retail jobs.
• Restaurants and small retailers are competing for employees with Amazon, which is hiring for all its distribution plants in Colorado, but especially in Colorado Springs where its massive fulfillment center that will open later this year. Other retailers, including Costco, Hobby Lobby, Target and Walmart, are paying wages that start at $15-17 an hour. Those employers also are offering bonuses and benefits many restaurants and small retailers can't afford.
• Laid-off restaurant, bar and other hospitality workers have found jobs in other industries and aren't interested in returning to their previous careers. Some are worried that they could face another layoff if the pandemic worsens again, triggering more restrictions on restaurants, retailers and other businesses.
Looking for applicants
Christopher Howes, president of the Colorado Retail Council, said member retailers aren't getting many applicants for openings, making it difficult for them to keep with strong sales growth.
“Some members are definitely experiencing very low job applicant rates here in Colorado,” Howes said in an email. “It has made it difficult to keep up with staffing needs in a growing consumer market such as Colorado as people continue to move to the Mountain West.”
Brenda Studly, vice president of recruiting for Allied Universal security and facilities services company, said the company is trying to onboard 250 employees for hospital security positions in Fort Collins and Aurora.
“A lot of it is due to growth, as security is really growing,” Studly said via video conference. “These were essential jobs, so we actually never slowed down last year. We’ve got new clients, and our existing clients are growing. And we’ve had to add positions like temperature checkers and greeters.”
The number of applicants for those positions “has decreased in the last 30 days, as has the number of people searching online and our job boards traffic,” she said. “We’ve got more jobs than people as the state opens up. It’s a big challenge for all employers, this low applicant flow.”
Allied has more than 3,000 employees statewide, and branch offices in Lakewood and Colorado Springs – a great location for recruiting former military, Studly said.
The company is holding two job fairs this month at Poudre Valley Hospital in Fort Collins, and two in coming weeks at the Hyatt Regency in Aurora.
“We’ve had to go for people who aren’t looking for a job,” Studly said, ramping up the bonus to existing employees who make referrals and combing the CDLE unemployment data base of resumes.
Where are the homebuilders?
Construction workers were hard to find before the pandemic, and the problem just got worse last year. The Colorado Association of Home Builders cites CDLE stats that show there are 175,000 construction workers in Colorado, but by 2027 that workforce will need to grow to 220,000 workers. That’s 60,000 more workers needed in the next six years.
Damon DiFabio, director of the Colorado Homebuilding Academy, said the school has been around since 2017 to help address the shortage, especially targeting under-employed or unemployed.
“Our classes have been full,” DiFabio said.
The Academy has graduated 984 students since its inception, 76 in Q1. Of those Q1 graduates, 35 got construction jobs, he said.
“We’ve really ramped up and hope to expand more,” DiFabio said. “Our demographic is those with all different learning levels, and education levels and who have different issues. While so many are motivated and want trade jobs, sometimes they have something else in their lives they’re dealing with” like homelessness, child care, mental issues and/or addiction.
The Academy offers resources, and partners with many organizations that do as well, he said.
Graduates not only get a certificate, but also a tool bag with $200 worth of tools.
“Our fee is waived for anyone who wants to purse a job in the industry,” DiFabio said.
Not all industries impacted
Some companies have not had issues filling roles, but for higher-paying financial services jobs.
“We’re confident we will continue to able to find talent here in Colorado for our 375 open positions we’re hiring over the next 5 months,” said Janelle O’Haugherty, Fidelity Investments spokeswoman in an email. “This effort is part of an established growth pattern we’ve been in over the last year at Fidelity Investments. In fact, we were able to successfully grow our customer-facing teams by 77% in 2020. We met our hiring goals for 2020, bringing on more than 5,000 new employees across the country and 525 in Colorado.”
Fidelity has operations in Greenwood Village, and more than 1,000 Colorado employees.
“Industries with the strongest recovery across the state are Finance and Insurance, Transportation, Warehousing, and Utilities (includes things like delivery services, warehousing centers, and the postal service), Management of Companies (corporate offices), and Retail (home improvement stores, grocery stores) - all of these industries have gained back over 100% of the jobs lost during the pandemic,” according to CDLE.
Gedney said this recovery is different from that of the Great Recession 2008-10.
“The relationship between unemployment and filling job vacancies is very different now than in prior recessions, because we are still in the middle of a global pandemic,” Gedney said. “Structurally, this is a vastly different recession and road to recovery that Colorado and the nation experienced during the Great Recession and early 2000s recession.”
As of Wednesday, there was 79,740 jobs posted on the state’s job database ConnectingColorado.com.