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Suddenly, Hourly Workers Aren’t So Hard to Find
Companies are pulling back on hiring for roles—such as retail workers and airport cleaners—that were once in demand
By Chip Cutter and Lauren Weber, WSJ
Aug. 11, 2024 5:30 am ET
In the bowels of Boston Logan International Airport, a sign on the door of ABM Industries recently warned would-be job seekers: “WE ARE CURRENTLY NOT HIRING,” it said. “PLEASE KEEP CHECKING.”
The company employs people to clean the airport terminals—exactly the sort of hourly role that, for years, has been among the toughest to fill in a booming job market.
Now, employers and workers say, the hourly labor market is beginning to show some of the same signs of strain as the white-collar economy, a shift that could have broad consequences for the U.S. economy and millions of American workers. There are plenty of jobs but the hiring frenzy is over.
At 4.3% in July, unemployment remains low by historical standards. The rise in the rate—up from 4.1% in June—was from more people looking for jobs, rather than people losing their jobs. Still, many economists fear recent trends, such as lower job creation and weaker wage growth, portend a troubling downturn rather than simply a rebalancing of the labor market.
For months, hiring has been a bright spot for lower-wage workers. Even as companies from tech to banking pulled back on corporate recruiting, executives regularly bemoaned that they couldn’t find enough retail clerks, warehouse workers, cooks, housekeepers and others. That trend is shifting, one of the key factors weighing on the labor market.
Manufacturer John Deere has shed about 15% of its hourly workforce since November, or roughly 2,100 production workers.
Spirit Airlines has stopped recruiting flight attendants, and is offering some of them voluntary unpaid leaves of absence as it looks to cut costs. The airline will also furlough about 240 pilots and downgrade about 100 captains in a move to cut costs.
Others say hiring is now less difficult. Daycare giant Bright Horizons Family Solutions is finding it easier to staff its child-care facilities. Defense contractor General Dynamics is having little problem recruiting people to build naval vessels. D.R. Horton says it has enough workers to build new homes.
A spokesman for ABM, which employs roughly 123,000 people, including those who push wheelchairs, service planes and clean hospitals, said the company had open positions in Boston earlier this summer, but recently held a successful job fair, prompting staffers to post the “not hiring” sign.
After The Wall Street Journal reached out, inquiring about the sign, the company said it had been removed. ABM continues to accept applications on a rolling basis, and its number of job openings has been stable, the spokesman said.
Some industries continue to add workers, many of them in hourly roles. July’s job gains were concentrated in the healthcare sector, which added 55,000 jobs; construction, which added 25,000; and leisure and hospitality, which added 23,000. In an indication that white-collar hiring remains depressed, the information sector shed 20,000 jobs.
D.R. Horton says it has enough workers to build new homes. Photo: Jeff Lautenberger for WSJ
Restaurant relief
The casual-dining chain BJ’s Restaurants is finding there is less need for its recruiters to attend job fairs or similar events to help staff its more than 200 restaurants—a shift from the pandemic, when the company had to think up creative ways to find people. While BJ’s is still hiring, it is finding that referrals from existing employees and more traditional word-of-mouth about job openings can draw people to its locations.
“It’s, dare to say, feeling normal,” said Thomas Houdek, the company’s chief financial officer.
Like many employers, BJ’s is noticing that its restaurant workers are staying on the job longer, with turnover rates now lower than even 2019 levels. Pay is up year-over-year, though increases are slowing. Execution in its restaurants is improving as longer-tenured employees understand the job better.
Houdek said he didn’t see a glut of restaurant-industry employees looking for jobs, and plenty of openings still exist. The dynamics, though, are now “feeling balanced,” he said.
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Workers are feeling the change. Matt Newell has decades of experience as a restaurant server and manager, along with an associate degree from the Culinary Institute of America. So when he decided to leave his job at a New York City eatery in June, he didn’t think he needed to have a new role lined up. In the past, job opportunities came up quickly.
But this time, “I’m now looking at two months of constantly pushing out résumés,” he said. From what he can see, “there are not as many roles out there and a lot of people applying.”
Newell, 50 years old, hoped to get hired as a floor manager or assistant general manager, but he has expanded his search to other possibilities that would use his customer-service skills, including waiting tables and working in hotels.
“I wish I’d known the market was going to be as bad as it is before I left my last job,” he said. “I thought I’d have no trouble finding work. It’s been pulling teeth even getting a response for an interview.”
‘Big silent layoff’
Employers have started to pull back on hourly seasonal and permanent hires. Photo: Joe Raedle/Getty Images
The first signs of a slowdown started showing up over a year ago, said Fred Goff, chief executive of Jobcase, a job board and networking community for hourly workers. Employers such as retailers and warehouse operators use the platform to access a large pool of job candidates for high-volume hiring. As far back as January 2023, Goff said, employers were starting to pull back on seasonal and permanent hires.
The pullback lines up with a shifting focus on profitability that may change companies’ long-term calculus on head count, he said. “You’re going to have all these public companies that get rewarded by growing their profits, not by embracing generative AI or innovating but by cutting their costs, which means labor,” he said.
The result, he said, is a “big silent layoff,” whereby companies shrink their workforces through attrition and by hiring fewer workers.
Thermon, a manufacturing and services firm in Austin, Texas, has cut its U.S. manufacturing workforce by about 5% in the past two years, to 230 people, as revenue has increased by 34%. The company, which helps industrial customers heat and electrify their operations, said investments in efficiency and worker retention has led to a reduced need for new hires.
“We’ve done a lot to improve processes to save time, so as we’ve had attrition, we haven’t had to replace labor at the same rate, nor have we had to do any reductions in force,” said Candace Harris-Peterson, senior vice president of human resources.
At the same time, Thermon sweetened the job itself to improve retention. It added benefits such as an on-site medical clinic, gave production workers the chance to earn higher bonuses, and created a clear pay-progression plan that allows an entry-level worker to get a 10% pay increase for hitting certain milestones after four to six months on the job.
Trucker troubles
Some hourly positions, including those for truck drivers and tradespeople, remain difficult to fill. The U.S. has faced a driver shortage for 30 years, said Jon Vander Ark, CEO of trash-hauler Republic Services, and he expects the issue to continue.
“I can guarantee you there’s going to be a driver shortage for the next 30 years,” he said. “That’s one of these evergreen problems.”
Republic has had success luring drivers with a quality-of-life proposition: Its employees might start their shifts early in the day, but they sleep in their own beds every night.
Hiring maintenance staffers has proven to be more complicated. The company started an academy to develop technicians because it is still tough to hire enough of them; about 40% of its technicians are now hired through that internal program. “Technicians I worry about,” Vander Ark said.
Despite a broad slowdown in the market for hourly labor, trucking-driving positions remain difficult to fill. Photo: Sam Morris/Las Vegas Review-Journal/AP
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