The Impact of Local Unemployment

More often than not, companies come to us when they are out of capacity.ย  Overtime is high and the workforce is becoming tired.ย  Absenteeism is leading to under-staffing and more overtime.ร‚ย  This is the type of death-spiral that does not right itself unassisted.

Improved shift scheduling can help.ย  However, one component is often to bring in more straight time hours – hiring more employees.

Given the currently high national unemployment rate, it can be hard to imagine that this would be one of the hardest parts of a schedule change.ย  Certainly, there are plenty of people out there looking for work, right?


Areas with high unemployment can be viewed as a “buyers market”; one in which a person is selling his time and the company is buying that time.ย  Since there are a lot of people willing to sell their time, the market is flooded and therefore, the buyer (the company) is in a stronger position when it comes to setting wages.

However, if manpower is scarce, this changes.ย  It becomes a “seller’s market”; one in which the person selling his time has more power and control over wages.

Where is the tipping point?

This is hard to precisely identify as it depends on the skill set you are looking for.ย  You may be in a high unemployment area but the skills you need are scarce so it will feel like a low unemployment situation.

However, most companies start to see the change when unemployment drops to about 6%. Above this number, it’s relatively easy to find labor.ย  Below this number,ย  labor starts to get scarce.

When unemployment drops below 5% companies really start to feel the pain.ย  Basically, everyone that wants a job already has one and those remaining are unemployable for some reason

Companies need to be prepared to sweeten the pot when this happens.ย  Wages alone will not attract and retain quality employees in a tight labor market.ย  Get creative with your schedules.ย  Have different schedules that offer appeal to different demographics.ย  We had one company actually place ads in the local newspaper touting the fact that they had several types of schedules to fit all different types of lifestyles.

Thinking outside of the box when it comes to work schedules is a low-cost way to attract and retain the people you want and need.

Call or text us today atย (415) 763-5005.