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Labor Shortages On the Horizon?


Even before the Great Recession, the American labor market was tilted in favor of employers with stagnant wage growth and workers hanging on to their jobs, rather than trading up. That woe-is-the-worker narrative is now being replaced with talk of labor shortages in a broad range of American industries, many relevant to franchisees and franchisors. 

The Bureau of Labor Statistics (BLS) just reported that the economy added 321,000 jobs in November. Housing starts and manufacturing output are still on the rise. Even more, U.S. job openings were at 4.83 million in October, the highest level since 2001.

A quick Google News search for “labor shortage” turns up countless stories in diverse industries: oil and gas, restaurants, construction, trucking, manufacturing, logging, high tech—even cowboys in Canada. Here in Minneapolis, home to Franchise Times, restaurants of all stripes are having a hard time finding servers, cooks and dishwashers.

As a reporter with an ear to the ground, it’s not just high-value, long-term employees or workers in top tier markets who have become harder to lure. Auto repair franchises, light manufacturers, restaurants and retailers in certain markets are finding it increasingly difficult to find quality workers to fill their open positions.

What does this mean for employers in the franchise world? Higher wages and more exhaustive job searches.

According to the Federal Reserve’s December Beige Book, “a number of districts report slight to moderate increases in labor costs” and that “New York, Chicago and San Francisco reported that employers were adjusting compensation to win well-qualified job candidates or to retain or give raises to high-value, long-term existing employees.”

The BLS says that a normal rate of unemployment is somewhere between 5.2 and 5.5 percent. While states like Michigan, Nevada, California and persistent laggard Mississippi still have unemployment rates above 7 percent, there are now 15 states with unemployment rates below 5 percent. The Dakotas, Nebraska, Utah and Minnesota are particular standouts, as members of the 3-percent club.

As the labor pool shrinks, we’ve heard of employers writing more appealing job descriptions, managers partnering with local schools and job centers, and all grooming internal candidates rather than casting out their human fishing pole.

Is your business facing a hiring shortage? And, if so, how are you getting around this hurdle? Hit up the comments section below to share your ideas, and fish on.

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About This Blog

The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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