Alabama workforce leaders trying to navigate state’s labor shortage

A job seeker's market challenges Alabama's employers

Talk to a hiring manager and you will probably get an earful about how hard it is to fill jobs these days.

That is because America’s labor market these days is tight due to factors such as low unemployment. The U.S. Bureau of Labor Statistics (BLS) reported a national unemployment rate in October 2022 of just 3.7%. For Alabama, the state Department of Labor’s preliminary seasonally adjusted unemployment rate was just 2.7% in October, up from 2.6% in September.

“Everybody’s always appreciative of low unemployment because it generally means that anyone who wants a job has a job,” says Tara Hutchison, communications director of the Alabama Department of Labor.

While that is good news, Alabama’s labor shortage is a concern. A U.S. Chamber of Commerce report from late October states that Alabama had 143,000 job openings but just 53 unemployed workers for every 100 open jobs. The report, in fact, placed Alabama’s labor shortage in the “More Severe” category among the states.

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Tara Hutchison, communications director of the Alabama Department of Labor.

“It’s definitely a job seeker’s market right now,” says Hutchison. “They’re at a definite advantage because the employers are all competing for the same limited number in the workforce.”

With more jobs than available workers, attracting skilled talent these days is challenging, says Loyd McIntosh, marketing manager for Automation Personnel Services (APS) Inc., a staffing agency based in Birmingham with offices across the Southeast. The agency serves industries such as light industrial, technical and manufacturing.

APS hires “associates” for jobs such as forklift driver or warehouse worker, as well as people in the skilled trades such as welders and electricians, and McIntosh says the demand for these workers is high.

“Like a lot of companies, we’re still having a hard time getting people to work. But it’s better than 2021 — 2021 was a tough year for our type of work,” McIntosh says.

“Overall, a lot of companies are still struggling, not just staffing agencies, but anybody that needs people to move stuff, to move products. Whether they’re in a big warehouse like Amazon like that or what we do, those are the kind of jobs that have been the trickiest to get filled,” he says.

The recent labor shortage is partly rooted in the COVID-19 pandemic, according to a July 2022 BLS Monthly Labor Review. Attempts to stop the spread of the disease included the lockdown of many businesses for a period.

But starting in 2021, economists began noticing a rise in the nation’s quit rate, the BLS Monthly Labor Review says.

In fact, it says the BLS Job Openings and Labor Turnover Survey (JOLTS) recorded a quit rate of 2.5% in March of 2021 before it rose to 2.8% by that April.

Alabama’s quit rate reached 3.5% in 2022, according to the U.S. Chamber of Commerce report.

Economists dubbed the phenomena as “The Great Resignation,” as Americans started reassessing what they wanted their work lives to be and quit jobs in search of better wages and benefits, more flexible hours and even opportunities to work remotely. Others exited the labor force all together.

As a matter of fact, a study by Pew Research reported that 63% of workers polled in the United States who left jobs in 2021 cited low pay as their reason for quitting. Another 63% also cited no opportunity for advancement. Among people living with children under the age of 18, 48% blamed child-care issues.

And in Alabama, these days, the labor participation rate — the percentage of the civilian population ages 16 and above that is either working or actively looking for employment — is low. In October it was just 57.4%. The national rate was 62.3% the same month.

Leisure and hospitality are among the hardest hit sectors for labor shortages since the pandemic. This includes restaurants and bars. But the retail industry is struggling, too, Hutchison says.

As a consequence, salaries are going up in multiple industries, and some employers have even resorted to offering hiring bonuses to attract job candidates, she says.

“We’ve even seen companies giving away cars as incentive packages. So, they’re definitely stepping up their game and improving those recruiting efforts in order to get those available workers,” she says.

Meanwhile, Hutchison says the state of Alabama is partnering with various school systems, community colleges and organizations to help address the state’s labor shortage.

“There’s lots of different agencies in the workforce development community here in the state, and we’re all trying to work together to target kids in high school, target college kids in the two-year system and four-year system to try to train them and prepare them for the jobs that we have in Alabama now and the jobs that we know we’re going to have in the future,” she says.

One key workforce organization is AIDT, an agency that provides services to companies that expand or move to Alabama. AIDT is a division of the Alabama Department of Commerce.

Among AIDT’s services are trainee recruitment and screening, as well as training and assessment. Moreover, the services are tailored to a company’s specific needs.

“We’ll work very closely with the company and provide them with customized training based on their needs and what they’re looking for as far as a typical worker for the jobs that they have available,” AIDT Communications Manager Chris Roquemore says.

AIDT organizes training in areas such as welding, manufacturing fundamentals and information technology.

He says some jobs are more difficult to recruit for such as industrial maintenance and facilities maintenance.

“They’re typically harder to find because they do require so much more experience than say, an introductory production job where you’re working on an assembly line,” he says. “That’s something that we can train and bring people up to speed fairly quickly.”

But to help attract more workers, AIDT, for the first time, has begun offering stipends to the trainees for some select companies to pay for gas and childcare as they attend classes.

AIDT also partners with a number of agencies and groups like Operation Next, a national organization that provides advanced manufacturing skills training opportunities for military veterans. 

“We’re getting out in front of members of the military as they’re separating from the military and making ourselves and our services and training available to them to continue their education or to funnel them into jobs and get them to move to Alabama,” Roquemore says.

Meanwhile, McIntosh has this advice for companies seeking workers:

Conduct a pay or salary analysis. You want to make sure you are offering a competitive salary or wage.

When posting a job, make sure the job title and the job description match what you really need. “Sometimes there’s a disconnect where a company will say they need some fancier type of title when what they need is more of an entry-level kind of person,” he says. Taking this step also will help you conduct your salary analysis.

Culture matters, McIntosh says. With so many jobs open, applicants have more options for choosing where they want to work. So, it’s a good idea to take an honest look at your company culture from top to bottom. Does your company have a healthy, nurturing culture? “If you’ve got a lot of turnover, you need to ask why.” 

Gail Allyn Short is a Birmingham-based freelance contributor to Business Alabama.

This article appears in the January 2023 issue of Business Alabama.

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