Hiring in 2022 is no easy task.
Wisconsin’s unemployment rate is at a record low of 2.8%. Wages climbed more than 6% year-over-year for three straight months to start the year. The state has seen more than 200,000 job openings every month since June, and nearly 80,000 people in Wisconsin quit their jobs on average each month in 2021.
“It’s incredibly challenging. It’s the most challenging I’ve seen in my career,” said Clarke Sinclair, director of talent acquisition at Milwaukee-based blood health solutions organization Versiti Inc.
Labor shortages show up in all kinds of ways in the economy, from manufacturers producing less to day care centers closing classrooms. From restaurants closing early – or even altogether – to burned out nursing staffs stretched beyond their limit.
The job market was already tight before the COVID-19 pandemic. Back then it wasn’t uncommon to hear employers say they could grow more, sell more and generally do more if only they could find the people. The skills gap complaints of the early 2010s gave way to a body gap: There just were not enough people.
Wisconsin’s current labor force has around 20,600 more people than it did at its highest point in 2019, but at 3.14 million it has grown just 0.04% in 13 years.
“Demographic trends decades in the making are challenging businesses in their pursuit of more workers,” said Jennifer Sereno, communications director at the state Department of Workforce Development, highlighting issues like low birth rates, net zero to negative immigration and migration and the retirement of baby boomers.
The trends may be decades in the making, but a global pandemic, several weeks of shutdowns and proof that remote work was not the end of all productivity also mean the post-COVID labor force has new ideas about what matters in life and what they want in a job.
“I think human beings have just reprioritized what’s important in life,” said Ryan Festerling, president of Brookfield-based QPS Employment Group. “As a human, I don’t think it’s a bad thing. As an employer and as someone that’s in the staffing business, it makes it challenging.”
The good news is Wisconsin’s real GDP exceeded pre-pandemic levels in the fourth quarter of 2021 at $306.7 billion, the highest level on record, even as total nonfarm employment is still down by 68,000 from February 2020, meaning productivity is up about 3.5%.
“This is a clear sign of a more modern production sector that is supplementing operations with increased technological efficiency to overcome the impact of a flat workforce,” Sereno said.
Wisconsin’s labor force participation rate is also consistently among the highest in the country and has rebounded to above pre-pandemic levels.
The bad news is Wisconsin’s economy may have recovered, but other states are doing better. Wisconsin’s GDP growth ranks 41st since the end of 2019 and the productivity gains rank 34th.
Making matters worse, the outlook for Wisconsin’s workforce is not promising. By 2040, nearly the same number of state residents will be over the age of 55 as will be 25 to 54, according to estimates from the University of Wisconsin-Madison Applied Population Laboratory. The state’s population grew at less than half the rate of the U.S. in the last decade, and growth has gotten off to a slow start in the 2020s. In metro Milwaukee, the population dropped 7,100 last year after growing just 1.2% in the previous decade.
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