This article was written by Jessica Nelson and is reposted with permission from the State of Oregon Employment Department.
Oregon’s most recent economic expansion lasted a decade, ending in the first months of 2020. The rapid onset of the COVID-19 pandemic changed the economic trend virtually overnight. While the pandemic recession was deep and the job losses remarkably fast as they took hold over two months last spring, the state has since regained more than half the lost jobs. The unemployment rate has been back below its long-term average since the fall. The easing of pandemic-related restrictions on specific dates across large areas has introduced a lot of short-term competition as employers all recruit at the same time in order to serve customers with increased capacity.
What can employers do to find the workers they need? We looked for signals from our Oregon Job Vacancy Survey, which is designed to identify employers’ vacancies, which ones they have a difficult time filling, and to get a business perspective on why these jobs may be going unfilled. The Employment Department surveyed 14,000 private-sector employers with two or more employees over the course of 2020 and received responses from 4,900, a slightly lower response than the 5,000 businesses who told us about their hiring in 2019.
Private employers in Oregon reported 44,400 job vacancies at any given time in 2020, a drop of 22% compared with 2019. Starting wages averaged $18.05. Businesses reported difficulty filling 22,800 of their job vacancies, which accounted for 51% of the total. Looking back, the share of difficult-to-fill vacancies peaked at 64% in 2016 and 2017 as Oregon’s economic expansion heated up and unemployment rates fell to record lows by the end of 2017.
Many characteristics of vacancies in 2020 were very similar to past findings. Four out of five job vacancies were for full-time positions, and nine out of 10 openings were for permanent positions, regardless of whether or not the vacancy was difficult to fill. Similarly, relatively few hard-to-fill job vacancies (37%) and vacancies filled without difficulty (28%) required education beyond high school.
Difficult-to-fill vacancies had two high-level differences in 2020. First, they paid a starting wage that averaged $2.50 more per hour than vacancies filled without difficulty. In many cases in 2020, employers were offering higher wages for difficult-to-fill job openings than others in the same occupation. Difficult-to-fill vacancies were also far more likely to require previous work experience (67%) than job openings filled without difficulty. With the constantly evolving business restrictions in 2020, along with worker availability that was limited by concerns over the virus and school and child care closures, employers may have
needed to offer higher wages or other benefits to find the experienced candidates they were seeking.
Employers reported difficulty in hiring for 80% of openings that required more than five years of experience, and two-thirds of those requiring one to five years of experience. If unemployment rates by age were any sign, the pandemic recession was hardest on the workers with the least experience. Unemployment rates for workers ages 16 to 24 shot up 6.2 percentage points in 2020, a much larger change than the 3.3 percentage point increase among workers ages 25 to 54, considered the prime working age group and also a group more likely to have the work experience employers were seeking, because they’ve been in the labor force longer.
Why Are Job Vacancies Difficult to Fill?
For each difficult-to-fill vacancy, employers offered open-ended responses to identify the primary challenge for the unfilled opening. Their responses were then sorted into 12 categories. Employers indicated that a lack of qualified candidates or a lack of applicants in general was the primary factor in two out of five challenging openings.
As the economy grew and unemployment rates were low in recent years, employers had the most difficulty getting any applications for their job openings at all, as well as filling jobs with unfavorable working conditions – like part-time jobs, short hours, nontraditional shifts, and demanding physical labor. The struggle to find candidates with specific qualifications has been either the second or third most prevalent challenge in recent years. Among the smaller group of vacancies in 2020, finding qualified candidates became employers’ top concern.
Among 2020 job vacancies where employers reported a lack of qualified candidates, the most common occupations included:
- Heavy and tractor-trailer truck drivers
- Dental hygienists
- Bus and truck mechanics
- Construction and maintenance painters
- Registered nurses
- Nursing assistants
Vacancies that lacked applicants included jobs like:
- Production workers
- Landscaping and groundskeeping workers
- Laborers and freight, stock, and material movers
- Personal care aides
Overall, employers reported difficult-to-fill job vacancies in 285 different occupations. The top 15 occupations shown in the table reflect about one-third of the difficult-to-fill openings in 2020. Jobs with the largest number of hard-to-fill vacancies included heavy and tractor-trailer truck drivers (1,400), nursing assistants (1,000), personal care aides (800), construction laborers (600), and landscaping and groundskeeping workers (600).
In general, more remote areas of the state had more difficulty filling job vacancies than metro-dominated regions in 2020. Eastern Oregon had the highest share of difficult-to-fill vacancies at 70%. Employers in several regions reported difficulty filling more than six out of 10 job openings, including Southwestern Oregon (68%), Northwest Oregon (67%), the Rogue Valley (65%), and Lane County (62%). Portland-Metro had the smallest share of difficult-to-fill openings at 33%, followed by Clackamas County at 49%.
The pandemic affected each area of the state differently, with restrictions implemented county by county and changing over the course of the year. Some areas of the state, particularly along the coast and in the East Cascades, have economies that are more concentrated in leisure and hospitality, which lost the most jobs in spring 2020. Metro areas have tended to have longer periods of restricted business activity. Employers in the Portland-Metro region, Clackamas County, and Eastern Oregon were the most likely to mention the virus or its effects specifically in their responses, though the range between regions wasn’t large. Across the state, employers referenced COVID-19 or the pandemic specifically in responses representing about 8% of difficult-to-fill vacancies. Of course, we know effects of the pandemic were pervasive and affected all jobs and people to varying degrees.
Some regions also dealt with catastrophic wildfires, and much of the state was blanketed in hazardous smoke last September. The Rogue Valley, Mid-Valley and Clackamas County all endured major losses and disruptions from wildfires in 2020.
There wasn’t as much variation in average starting wages across the state as one might expect. Average starting wage for hard-to-fill jobs ranged from less than $18 per hour in Northwest Oregon, the Rogue Valley, and the East Cascades to $20 or more in the Portland-Metro and Clackamas County. Regions with higher average starting wages were more often recruiting for jobs that required education beyond high school and previous work experience.
As the economic rebound from the pandemic recession continues, it’s likely that many characteristics of job vacancies will remain similar to what we’ve seen in the past. A typical job vacancy tends to be for a full-time, permanent position. The majority tend to require previous work experience, and about one-third tend to require education beyond high school. Employers have seen slightly less difficulty filling jobs since 2018, but with the swiftly falling unemployment rate and some workers and jobs still sidelined by pandemic-related factors, the labor market is tightening quickly in recovery. Employers may need to consider adjusting their experience and education requirements where possible and providing more training on the job, or they may need to raise the wages (or some combination of pay and perks like benefits or other work flexibility) they offer in order to reach the experienced applicants and qualified candidates they’re seeking.