3 reasons why companies are understaffed

RICHMOND, Virginia – Business owners in Central Virginia say they are on the verge of closing permanently because there aren’t enough workers. It’s been a problem since the pandemic started, but it’s only getting worse.

Many owners had hoped they would be fully hired again by now, marking the end of enhanced federal unemployment benefits. However, they discovered that this is not the case.

Chefs and servers work hard around the clock to serve breakfast to hungry customers at Eat 66 in Richmond.

“The people who work here, thank God, are very loyal and loyal,” said owner Brad Smallwood.

But these workers are tired.

“We usually have 12 to 13 full-time employees or as many as 17 full-time and part-time employees,” he said. “Now we’re down to about six.”

CBS6 first met Smallwood in April when he was The recruitment puzzle has begun. He believed that more people would eventually return to work in September when an additional $300 in federal unemployment benefits expires.

Related: Florida man spreads after applying to 60 entry-level jobs, getting one interview

“Actually to my surprise, it’s even worse than it was before,” Smallwood said.

In order to continue operations with a limited number of employees, he said he closed the restaurant on Monday and reduced operating hours. After months of running a project like this, he’s left wondering where all the workers have gone.

“If they don’t work, it sends a signal to future employers that they may not be interested in working,” said Leslie Stratton, professor of economics chair at Virginia Commonwealth University.

She said cutting the additional aid did not stimulate a significant increase in people looking for jobs, but she said the additional benefits had somewhat of an impact on the labor shortage.

However, Stratton said another type of government assistance is worrying economists. While the evidence isn’t clear yet, she said some experts believe tax credits for children may be disheartening.

“There is some concern about that [child tax credits] Maybe he’s encouraging some people to stay home because they’re now guaranteeing their paycheck every month to help feed their kids,” she said. So maybe going out and getting a job is less important to them. “

Stratton suggests some other reasons why people quit their jobs include:

  • Workers were unhappy with how their boss was responding to COVID-19
  • Low wages, especially in the hospitality sector
  • Shift in priorities.

“There are a lot of job opportunities out there, and some people decided to change careers,” she said.

CBS 6 has also heard from hundreds of Virginians who said they have applied for dozens of entry-level jobs, many of them in companies, but can’t get a callback. This is nothing new, Stratton said.

She said, “I think it’s been known for a long time that people apply to a lot of jobs, especially online. Yes, it looks like an entry-level job, but they often ask for experience anyway.”

Stratton learns of the misleading advertising that can frustrate those trying to enter the workforce.

At Eat 66, orders come in every now and then, but the managers said most people don’t even show up for interviews. Additionally, they said they would spend money and resources training new employees who end up quitting after a week or two.

If nothing changed, Smallwood said he would be in a very difficult situation.

“Honestly, I would probably be two people away from having to shut down if we lost anyone,” he said.

Going in depth:

CBS 6 also asked members of Congress representing Virginia to consider the labor shortage crisis.

In April, Republican Congressman Rob Whitman told CBS6 that he believed the enhanced unemployment benefits prevented people from returning to work at that time. He recognizes that recent unemployment numbers have been underperforming and is now pointing to requirements for small businesses that can discourage people from working, including mandates for vaccines.

Another reason Whitman suggested: Some people receive significant financial help from CARES and supply chain issues.

“We need to evaluate every dollar spent in the Care Act and make sure it is going to the people who really need it,” Whitman said. “And we have to bring the supply chain back to the United States. We have to create cutting-edge manufacturing jobs that we know we can do well.”

Meanwhile, Democratic Congressman Donald McEachine never suggested that boosted unemployment aid play a role in labor shortages when we asked for it in April. He still insists that these issues boil down to how bosses treat their employees.

“Employers have to come up with a better model, and they have to start paying people a fair wage,” he said. “It doesn’t make sense that people who work full time should barely be able to afford it.”

McEachin disagrees that other forms of assistance are causing people not to return to work.

“The idea that a $350 check for a child, depending on that child’s age, is to stop someone from going to work, is ridiculous,” he said, referring to the child tax credits.


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