Record 10.9M Job Openings for July as Labor Shortage Worsens
Total job openings across the U.S. posted a new record of 10.9 million in July. The economy has set yet another record for job openings, but labor shortages prevent businesses from filling open roles.
Worker Retention and Hiring a Key to Continued Recovery
Hiring remained steady at 6.7 million, while 4 million people quit their jobs in July. Employers continue to face the simultaneous challenges of staffing open roles and filling roles vacated by employees seeking new opportunities.
Through July of 2021, there were nearly 43 million hires on a year-to-date basis. If the U.S. economy keeps the hiring pace of around 6 million jobs per month, it will be on target to hit or exceed LaborIQ®’s forecast of 73 million total hires in 2021.
LaborIQ predictions suggest the U.S. economy is on track for a full recovery by late 2022 or early 2023.
Labor Shortages and Delta Variant May Hinder Recovery in Key Industries
Record trends in job openings, combined with quits and other separations, can signal that workers are ready to return to the labor market and have confidence to voluntarily switch jobs for better opportunities. However, labor shortages created by record job openings may be exacerbated by the continued resurgence of the Delta variant and hinder business’ productivity and consumer confidence. This is especially important in industries disproportionately impacted by the virus.
Leisure and Hospitality: Despite increased spending and summer travel plans, labor shortages persist. Leisure and hospitality experienced significant turnover in July, as evidenced by high numbers of hires, quits, job openings, and layoffs, as compared to other industries. With the spread of the pandemic, workers may continue to leave jobs in the industry in favor of industries where potential virus exposure is lower. And as we enter the cooler months of late summer and early fall in some parts of the country, consumers may become more wary of spending time inside, further complicating matters for business owners in leisure and hospitality.
Healthcare and Social Assistance: With continued spread of the Delta variant, healthcare providers will remain as one of the most in-demand occupations. In July, job openings and quits reached new highs, while hiring leveled off. Healthcare workers face burnout and the associated health risks of caring for new COVID-19 patients.
Labor Force Outlook
ThinkWhy’s talent intelligence software, LaborIQ, projects the U.S. will reach 73 million hires for 2021, from a combination of filling current job openings, backfilling jobs and adding new jobs. Despite strong job gains over the last three months, infections from the Delta variant appear to have slowed increases in hiring for July and could continue to affect hiring in the coming weeks and months. Such a slowdown would impact the pace of the labor market recovery.
LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.