What is the Future of the Labor Market?

The number of job openings in the U.S. reached a record high of 9.3 million in April, yet unemployment is also bordering at an estimated 5.9%. As businesses head towards a new normal with more Covid-19 vaccinations rolled out, and new measures in place, the labor market is expected to fluctuate and change yet again. The pandemic has also created a significant impact in frontline jobs which involve close proximity and physical contact, with many organizations scrambling to find digital alternatives to reduce contact. 

With drastically changing demands and economic situations, what exactly is the future of the labor market? Let’s delve into the current trends, and how Covid-19 has impacted the labor market. By understanding how these trends work, you may be able to take preemptive measures and navigate these uncharted seas. 

Number of Job Searchers will Increase

The $300 unemployment boosts are coming to an end, and most will occur before the expiration date of September 6. As more workers are looking to replace these benefits with a new stream of income, many will be searching for jobs. Some of these workers are likely to start their job hunting during this season, to prevent a last-minute scramble for jobs only when their unemployment benefits come to an end. 

Preference for Remote Work

With new work from home arrangements in most organizations, many employees are getting used to working longer hours, yet also becoming more productive with their time. This trend is likely primarily reflected in higher wage jobs, with 60% of high earning workers being able to do their jobs effectively from home compared to 34% of low-earning workers.   

However, work from home arrangements are not set to take over job routines completely, as plenty of jobs will still require workers to be physically present. This is especially so in the QSR sector, where customer service is crucial and of the priority, an experience that cannot be replicated online. 

Organizations will need to be flexible, while planning for and offering hybrid remote work opportunities after the pandemic to cater for this new preference. Additionally, many processes have also shifted online, including recruitment - with contactless hiring through virtual interviews and even video resumes. 

Rise of Digitalization

Many companies are going digital and adopting technology with online menus and self-checkout options, while simultaneously outsourcing their work to robots and artificial intelligence applications. These implementations are likely to displace workers (especially low wage workers) on a much larger scale. The largest impact will be in food services, retail and hospitality. 

Workers will be expected to upskill, and training will be necessary to ensure that their skills are not made irrelevant with technological advancement.

QSRs will also have to look into how to adapt and pivot their businesses digitally, to remain competitive, especially because these implementations help meet changing demands as a result of Covid-19. 

Eventual Increase in Job Openings 

Covid-19 vaccinations, alongside pandemic aid from government, has facilitated the reopening of the economy. U.S. job openings have risen to a two-year high in February, and we can expect these figures to continue increasing as the world returns to a new normal. This hiring boom is led by the hospitality and food services industries, with an increase of 220,000 jobs. 

Competition within the labor market is high, due to the high unemployment rate. This means that organizations may have the upper hand in choosing candidates, while candidates will possibly have less bargaining power than they used to. However, the opposite is true too, due to the hiring sprees going on in the QSR industry as they prepare for reopening. Organizations will likely have to compete with one another to attract the candidates they desire. 

Fierce Competition for New Hires

Given the increased demand for new hires in the QSR sector, many QSRs are raising wages and increasing incentives to appeal to applicants. This may be attributed to labor shortage, especially since less people are willing to work in the frontlines in a pandemic situation. There is also a gravitation towards jobs which allow more flexibility, and working from home, which are perceived to be safer. 

With changing expectations, there is a desire for higher pay and better working conditions, as workers have to take on additional expenses such as child or elder care given the current situation. McDonald’s has been raising its wages, and plans to reach an average of $15 an hour by 2024, while Chipotle is also dishing out referral bonuses of up to $750 for apprentices or general managers. QSRs have been passing down these additional costs in the form of menu price increases to customers. 

It is therefore crucial to understand what employees want, to be able to meet these changing expectations and successfully attract desired applicants. 

The Need to Hire More Creatively 

To stand out from competitors, it is essential to look into creative and unique hiring processes. We’ve previously summarized some tips on creative job postings, such as through hiring parties, recruitment webinars and fresh recruitment videos, which you may consider for your QSR. 

Leverage the benefits of the various social media platforms, to maximize the applicant pool, especially since different platforms attract different demographics. To effectively reach out to Gen Zs, explore Tik Tok for job postings; whereas Millennials and Generation X can be found primarily through platforms such as Twitter. 

Finally, consider the use of hiring tools while experimenting with digitalization. Features such as mobile training, video resumes and virtual interviews will be more relevant as organizations begin a gradual transition online. Automated recruitment processes including smart screening and integrated calendars will also be effective in saving time and making the hiring process more convenient for both the applicants and hiring managers. 

To Sum Up

There is a need to constantly monitor the labor market as demands and expectations are always evolving, and organizations will have to stay above the trends in order to remain competitive. 

Although the future of the labor market is unpredictable, understand and apply what these workers are looking for when they’re applying for a job and you’ll be able to successfully win them over. 

Looking for ways to transform your recruiting processes? Schedule a call with us for personalized tips catered for your QSR!