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Utah Business

Record-low unemployment rates in Utah is good news for workers but is causing headaches for employers.

Low unemployment rates in Utah are causing a headache for employers

Walk into any retailer, and you’ll likely see a sign on the front door that reads, “We’re Hiring.” Throughout the Covid pandemic, retail workers have been departing the industry in droves—searching for better opportunities and higher wages, leaving business owners and managers scrambling to hire replacements.

According to a Bureau of Labor Statistics report, some 722,000 retail workers gave notice across the United States during December. That’s a sharp increase compared to the 549,000 workers who quit during the same month the year prior. It also happens to be one of the highest totals on record.

Economists say this trend appears most prevalent amongst workers living in states in the West—including here in Utah—which saw some of the most significant upticks in employees quitting across the job market.

For example, in the most recent data broken down by state, 55,000 Utah workers across all sectors quit their jobs in November—an increase from 48,000 workers during October. Though not the pinnacle of this trend, Q1 of 2022 posted similar numbers with 1.8 available jobs for every American job seeker. Economists fear that those numbers will stand pat, especially amongst retail workers who have cited everything from burnout to low pay to better opportunities elsewhere as some of the critical reasons they left.

To help lessen the loss of talent, retailers like Amazon, Best Buy, Costco, Target, and Walmart are heeding the call by raising the hourly wages of their employees, a move that is particularly critical now that the $15 minimum wage portion of President Joe Biden’s Covid relief bill was repelled by Congress. The minimum wage in Utah has stayed at $7.25, which amounts to a little more than $15,000 per year for full-time employees—not precisely a livable wage, especially in a state where the cost of living and inflation continues to increase alongside rents and mortgages.

“​​Retailers are faced with providing higher pay and other benefits to employees considering joining the retail team,” says Anjee Solanki, US Director of Retail Services at Colliers. “[This includes things like] better company discounts, signing bonuses or providing employees with the opportunity to select working hours on a specific day within a month.”

But is that enough to stop the hemorrhaging of talent and keep current and potential employees satisfied? What more can employers do to help retain workers and ensure they don’t continue to leave for greener pastures?

Solanki points to “The Happiness Report,” a survey conducted by Traitify, a talent management platform that helps companies “attract, select, and engage” job applicants using quick, 90- second assessments. Based on the more than 1,000 respondents, workers mentioned several factors in having a good work-life balance, including “wages to support and feed their families, respect, consistency, stability, communication, paid sick leave, and job safety.”

In the report, Traitify’s Chief Psychology Officer Heather Myers writes, “Psychological research shows us that happy people at work are more engaged, stay longer, and perform better. Common practices such as minimum wage pay, only part-time work, no paid time off, or no benefits at all are the things that lead to lower productivity and higher turnover rates.”

This might explain why one in four respondents admitted they were less happy with their job than before. In addition, two out of every three respondents say that job security was one of the top factors determining their happiness with a job. A similar amount also confirmed that salary was another component for keeping them satisfied. Other perks like maintaining happy employees fall under “psychological safety,” including flexible scheduling, access to sick days, reliable income, and talking to a supervisor when a problem arises (and being heard).

“As retailers face lower margins, it’s important that they evaluate a long-term strategy to hiring and retention versus a reactionary approach,” Solanki says. “Most people interested in working for a retailer or brand have an affinity with the brand. If retailers can expose that passion, they have a better chance of retaining the individual. This can be done through motivating employees, increased communication, and engaging in an idea exchange to keep them engaged.”

Unfortunately, employers repeatedly fall short of providing these basic needs for many retail workers. Couple that with retailers cutting back store hours nationwide or shuttering entirely due to the pandemic, having to deal with demanding customers, and in the thick of the pandemic having health concerns about contracting the virus on the front lines. It’s no surprise that many workers are leaving retail in droves to join other non-public-facing industries—including construction and working in warehouses.

“It’s quite competitive, not just in retail, but in all industries,” Solanki says. “Providing critical training and establishing work programs or paying for employee tuition for college or apprenticeship programs is another way retailers attract talent. For example, Amazon will pay for employees’ college courses and certifications.”

Yet, even despite this mass exodus from occupations in retail, unemployment rates remain at a record low in Utah. The state recently reported its lowest unemployment rate ever—falling to a record 2.2 percent, leaving approximately 37,400 Utahns unemployed (In comparison, the US employment rate holds steady at 4 percent according to the Bureau of Labor Statistics).

 While those numbers are good news for workers, they’re causing headaches for employers who continue to have trouble filling vacant positions. But until companies are willing to satisfy employees’ wants and needs in the form of better salaries and more desirable working conditions, their “We’re Hiring” signs will continue to be ignored.

Jennifer Nalewicki is a Salt Lake City-based journalist. Her work has also been featured in Smithsonian Magazine, Fast Company, and more.