The Lack of Services Workers: A Case for Retraining

It is not your imagination that wait times are longer at many restaurants. That waiting rooms at hospital emergency rooms are crowded beyond anyone’s memory.  And other services we rely on, including education, leisure, and hospitality, are all failing to meet user’s expectations.

The issue is not necessarily a labor shortage.  Here in the U.S., there are 9.5 million people classified as unemployed and looking for work, and 9.2 million job openings, according to an August 2021 study by SHRM, a U.S.-based human resources association.

The concern for employers and others, workers are not returning to jobs they lost during COVID.  David Autor, an economics professor at M.I.T. says continental Europe and the UK are experiencing much the same.

The COVID pandemic might have just laid bare how service economy jobs have changed.

There are a few theories for workers’ reluctance, unwillingness, or inability to get rehired. Many economists have settled on low wages as the chief reason.  The situation is not likely to improve within the next year, according to SHRM’s study.  Some in the media are reporting that workers are seeking retraining for a career shift, with some employers stepping in to provide just that.

While there are a few theories as to why so many in the service industries remain unemployed, no one really has an answer to what’s happening, Autor says. “We don’t know what’s going on,” he writes in The New York Times, Sept. 4, 2021.

Three theories are not proving valid.

  1. Unemployment benefits are too generous so many workers prefer to put their feet up at home.
  2. Many potential workers fear the risk of exposure to COVID and are waiting for the pandemic to subside.
  3. One or both parents are staying home to provide child care or elderly care in the absence of pre-COVID person-care arrangements.

Meantime, I have friends and family who proffer a reason that service workers are unwilling to return because of the poor treatment they receive by employers, shoppers, customers, and users.  To them, I retort: people still need jobs.

Upon deeper analysis, labor economists say when each of these conditions is resolved, workers are still not at work.  “Research on this question is unambiguous,” Autor adds,

But as some employers in Europe begin to pay higher wages, there is a noticeable difference in the pace of hiring, demonstrating to some that the central issue is around the low pay of non-professional jobs. In other words, service workers who lost their jobs during COVID are looking for higher wages when they reenter the job market.

Some employers balk at raising wages, telling researchers that staying competitive means keeping consumer prices low.  They also say it is hard to justify paying someone more who has no college education and lacks technology skills.  Nowadays, jobs require levels of technology, notably computer communications and operating automation.

One noticeable trend is workers who seek training for a career shift to earn more.

The New York Times, August 18, 2021, Workers, in Demand, Have a New Demand of Their Own: A Career Path

“Mark Wray was working at the concession stand of a movie theater when the pandemic lockdowns hit last year. The movie theater shut down, and he lost his job.

But instead of looking for another low-wage job, Mr. Wray sought a different path. He found a program teaching basic technology and business skills, completed it, and landed a job at a fast-growing online mortgage lender. He started in March, working in customer service and tech support. He makes about $55,000 a year, compared with $17,000 at the movie theater.”

Employers, too, are providing skills they need after hiring employees. Employees at Walmart get to experience the crush of customers during Black Friday using virtual reality in their training centers. The retail giant isn’t alone. From hotels to fast-food chains, employers in service industries are setting up training programs or revamping the ones they have.

When the labor situation in the services industry settles, the likelihood is some will remain left behind.  Those who land will likely be those who are proactive with their careers and seek new skills to meet employers’ needs.

Author Steven J. Slater is co-founder and president of the International Service Design Institute, an organization for the professional development of service designers.  ISDI offers self-paced online courses and certifications, reference books, workshops-in-a-box, survey data, and more.