- The US unemployment rate fell to 3.7%, a 48-year low, in September.
- While low unemployment is a sign of a healthy economy, it is worrisome news for companies scrambling to hire and retain workers. The restaurant and retail industries are trying to fill hundreds of thousands of job openings.
- Companies are giving workers higher pay and better benefits to compete — and trying to figure out how to cut labor hours by replacing employees with robots.
The US unemployment rate fell to 3.7%, a 48-year low, in September. According to the monthly jobs report released by the Bureau of Labor Statistics on Friday, the last time unemployment was so low was December 1969.
While low unemployment is a sign of a healthy economy, it is worrisome news for companies scrambling to hire workers.
There were 757,000 retail-job openings across the United States in July, which is about 100,000 more than a year ago, according to the Bureau of Labor Statistics. The food industry had 909,000 job openings in July, an increase of 161,000 from a year ago.
„You’ve got an environment where, really, the economy is strong,“ BTIG analyst Peter Saleh recently told Business Insider. „People are trading up into better jobs. There aren’t as many employees or capable employees to do the jobs these companies need.“
Restaurant and retail executives are getting anxious about filling the necessary positions.
„For some brands, it’s actually capping their sales potential,“ said John Hamburger, the founder of industry trade publication Franchise Times Corp.
„If you can’t find enough people to fill a shift, you just can’t possibly do the potential volume of what some of these restaurants are supposed to be doing,“ Hamburger continued. „There’s a lot of brands that are having a lot of trouble trying to find workers.“
Workers are getting raises — or being replaced by robots
As a result, workers are seeing increased wages and new benefits.
In an attempt to hire seasonal workers for the holidays, retailers are also pushing new perks.
JCPenney is offering workers paid time off and even making some eligible for 401(k) benefits. Kohl’s announced that seasonal workers will receive an „unprecedented“ 35% discount during certain shopping periods. Walmart even reportedly sent out a survey to employees, asking them which benefits would be most „meaningful to new hires.“
While some fast-food chains are also increasing pay to compete, the restaurant industry is increasingly relying on automation to cut labor costs.
Shake Shack, Taco Bell, and McDonald’s are all rolling out ordering kiosks across the country. Arby’s has installed ovens that automatically roast beef, while Dunkin‘ Donuts has roasters that independently grind coffee, the Wall Street Journal reports. And, mobile ordering has become the norm across the industry, with chains from Chick-fil-A to Starbucks incentivizing customers to download the apps.
„The only way to truly deal with this is to reduce the number of labor hours that are required to run your concept,“ Saleh said. „And, I feel like the only way to really do that is to implement technology.“
Source: Business insider