Even as businesses struggle to hire, many job seekers struggle to find work

The three Somali-American job seekers who recently came into the employment agency where Sahur Hussein works faced multiple barriers to employment.

The men didn’t own computers and weren’t proficient in English, so they only learned about job openings through word of mouth within their immigrant community, she said. They also didn’t have transportation, so they were limited to jobs in town, she said.

Unfortunately, they are common examples of the kinds of clients she works with regularly as a career planner at Career Solutions in St. Cloud, Minnesota.

Thousands of other Minnesotans are, like them, still struggling to find work despite a tight labor market with unemployment at record lows. Among those struggling the most are immigrants, disabled people, those with less education, single parents, and older workers (Chart 1), according to employment agency staff members surveyed by the Minneapolis Fed and the Minnesota Association of Workforce Boards in January.

The survey and the struggle it quantified were discussed at a webinar the Reserve Bank hosted recently. Speakers included Hussein, along with Tammy Biery, executive director of Career Solutions, and Jinny Rietmann, executive director of Workforce Development Inc. in southeast Minnesota.

It's part of an ongoing effort by the Minneapolis Fed to better understand the labor market from the labor point of view, according to Ron Wirtz, regional outreach director for the Bank and webinar host. Labor availability is critical to long-term economic growth, and it’s important to understand how workers are finding jobs and what challenges they face getting the jobs they want, he said.

“If you look just on paper at the number of jobs available, it’s really easy to just deduce that there’s enough jobs for everybody,” Rietmann said. But the survey shows that there are many reasons for the mismatch between available workers and available jobs, she said.

These mismatches represent a labor pool that, for now, have not been well utilized by employers as they compete for scarce workers. And, with the labor force expected to continue to grow slowly, the competition is likely to continue for many more years.

Challenges for job seekers

The reasons for the labor mismatch range from job seekers not meeting employers’ requirements, such as a minimum level of education, to employers not meeting job seekers’ requirements, such as inflexible schedules, according to survey respondents. But the toughest challenges are affordable care for children and adults as well as affordable housing (Chart 2).

Respondents reported that the temporary closure of schools and child care centers due to COVID-19 outbreaks have made it hard for single parents to keep jobs they have or to accept new jobs if schedules are inflexible. But even without such disruptions, the lack of child care in the evenings and on weekends makes it impossible for single parents to accept jobs with shifts at those times or to keep jobs where overtime is required. Ironically, the overtime may just be caused by their employers’ inability to hire enough workers.

“Unless you have a child and you’re trying to find day care right now, you don’t understand the magnitude of that challenge,” Biery said. “People will make a hundred phone calls to day care providers to see if they have an opening when they’re pregnant.”

Many challenges faced by job seekers are interrelated; one challenge can cause or affect another.

For example, personal motivation was cited by survey respondents as a big challenge for job seekers. But the root cause might not be a character flaw, as could be assumed, but something else entirely, such as the employers’ lack of response to job applications. Respondents said their clients often felt dejected after submitting many online applications and never receiving any acknowledgement, not even a rejection letter. Anecdotes in the January survey and in prior surveys suggest this non-response is pervasive among employers.

Low wages, cited as another challenge to finding preferred work, are related to the lack of affordable housing and child care. Respondents reported that some clients are working multiple jobs to afford both.

Hussein said a good number of her clients already have jobs. “They are working full time, but they're still not meeting the basic needs.”

And job seekers often face more than one challenge, compounding the difficulty of their search.

Rietmann said a single mom who quits her job after her child care provider closed multiple times will now have a gap in her employment history, making it harder to secure an interview when she re-enters the workforce. In addition, if this job seeker decides to change to a career with a more flexible schedule, she may have trouble convincing an employer that skills in one career are relevant in another.

How employers can help

Still, the survey suggests there are changes employers can make to tap into the mismatched workforce. They can, for example, offer more flexible schedules, pay workers more to make housing and child care more affordable, allow workers to apply for jobs using pen and paper, and reduce job requirements. For example, respondents reported employers requiring higher education than needed for low-wage jobs.

The good news is employers do want to change, according to Rietmann. “More employers than ever” are reaching out to her organization “wanting to be part of the solution,” she said.

But change is hard.

Employers reaching out to populations that normally don’t apply for their jobs have found that it requires a different way of thinking, according to Biery. “It’s almost to the point where your [human resources] team needs to have their own strategic plan, and that there’s someone with marketing skills on that team.”

As an example, she said, employers have not reported much success with job ads on the radio, but the Somali-language radio could be much more effective, because Somalis have an oral culture.

Rietmann said employers are changing hiring practices but it takes time, because without enough workers, they are struggling too. “They’re just trying to stay above water right now.”