Businesses do not find workers but resignations are increasing. How come?
Because the job market risks breaking in two. Claudio Negro's analysis of the Kuliscioff Foundation
I believe that there is a link between a series of unprecedented phenomena concerning employment / unemployment: that of resignation (the great resignation), the growing lack of matching between demand and supply of work, in particular the progressive gap between supply and demand. of work in some sectors.
This is a set of phenomena that generates an unusual situation: in the first four months of 2022, the Ministry-Bank of Italy-ANPAL Observatory informs us, the positive trend of employment continued: since the beginning of the year, net of terminations, 260,000 jobs. 175,000 with permanent contracts (including new hires and transformations of fixed-term contracts); the tertiary sector took the lion's share, with the great majority of net activations between tourism, commerce and other services. Another highly positive figure is the reduction in the number of “administrative” unemployed, ie those who have signed a DID (the willingness to accept a job); these are the “correct” unemployed, that is, those who are actually looking for a job: we are talking about over 60,000 people less than 12 months ago. Equally positive and interesting is the data on the dynamic entry-exit from unemployment of workers with fixed-term contracts: a figure in sharp decline for the whole of 2021 and which continues for 2022, which indicates a growing trend towards the stabilization of temporary contracts (as seen above) and a longer average duration of forward contracts.
However, these fairly bright figures have a bad downside: the ANPAL Excelsior Observatory reports that companies need to hire 444,000 employees in May, and 1,530,000 by July. However, a difficulty in finding almost 40% has already been verified, with peaks of 52% for skilled workers, 45% for technical professions, 42% for plant operators. For the vast majority, this lack of matching of job supply and demand is not even due to insufficient skills, but precisely to a lack of candidates.
All this is not a complete novelty, but strangely coincides with a sort of "escape from work" (precisely the great resignation), or more precisely with a not epochal but still visible increase in voluntary resignations: in March 2022 they were higher not much compared to those of the last month before covid (approximately +15,000) and in any case in line with those recorded immediately after the conclusion of the lock down phase. The media love to emphasize this phenomenon (usually presenting it as a new deal) by comparing recent data to those of the lock down period, obtaining fabulous growth rates, of which obviously the reason is not explained …
Having said, therefore, that we are talking about a detectable phenomenon but of much more modest dimensions than the media magnify, it is appropriate to examine it a little more in detail. First of all, who are the workers who resign: a nice analysis is the one conducted by the Labor Consultants Study Foundation on the 2021 data. however, for the professions in the tertiary sector (70%): out of the total, 25% are qualified professional profiles and 17% are unskilled professions. Mostly (30%) these are young people between 25 and 34 years old, with low educational qualifications (max diploma not valid for access to university). However, if we look at the "tree" of professional skills, we see that within the different groups those in which the phenomenon of resignations affects the most are the lowest (unskilled professions, 23%) and the highest (scientific and high specialization, 22%), immediately followed (21.5%) by artisans and skilled workers. If we compare these data with those relating to job demand and mismatch (Excelsior ANPAL) we see that there is a significant coincidence: 30% are looking for qualified professional profiles in the tertiary sector, for 18% unskilled profiles always for the tertiary. If we then consider the mismatch within the professional brackets, we see that the value for the lower bracket is 28%; however, the mismatch is very high also for the highest professional level (45%) and for that of skilled artisans-workers (52%). There is therefore a certain relevant coincidence between the quantities and profiles of staff who resign and what companies are looking for without finding them.
The data on the relocation of resigning workers is also interesting: according to the research of Labor Consultants (data 2021) over 55% of resigning workers are relocated within a maximum of 9 months, with peaks of 70% for graduates, and with a large part placed within 1 month. The technical, scientific and intellectual professions are at 65%, skilled workers and artisans at 56%, but the unskilled and skilled professions in the service sector at 49% and 46% respectively. Basically, the highest percentage of non-relocation, or at least of delay, is in the sector in which the greatest number of resignations and the highest mismatch occur.
All this takes place in a context in which the stock of employment is in (modest) growth, unemployment is starting to decline again and the rate of activity tends to settle at levels above historical ones. The result is a labor market with faster internal dynamics (not necessarily a more dynamic labor market, especially as regards new entrants and mobility). Some data is very significant: According to research by Gartner, a typical company – which used to have around a fifth of its employees turnover before the pandemic – could now lose nearly a quarter every year. Not only that: in Italy, starting from May 2021 there has been a constant growth in the demand for work, with a peak increase of + 58% in March 2022. For every 100 pre-pandemic existing job opportunities, today there are 158.
Basically, a labor market in which demand grows much more than supply but which precisely for this reason stimulates a race to relocate those who are employed to obtain better conditions (and not only in terms of wages, but also of working methods, we think to home working, and to welfare). However, this race generates two distinct effects: for the higher professional profiles the resignation phenomenon and the mismatch produces competition between employers, while for the non-professional profiles and in general for the services sector, the resignation increases an existing offer. large, although penalized by the mismatch, but still insufficient to trigger a run-up in wages. In reality, this range is crowded with a disqualified offer, which is increased by the resignation of those in search of better wages which determines, despite the mismatch penalizing many companies, a propensity to compress wages: the UIL has estimated that wages hourly offers do not reach € 4 per hour, against a contractual minimum of € 7.
Ultimately the combined effect of resignation – mismatch determines a marked split in the labor market. In the upper range, from the scientific professions to specialized workers, it will produce on the one hand an increase in wages that could easily override the collective bargaining tools of the union (without prejudice to the serious phenomenon of the lack of manpower). In the low-skilled or unskilled brackets, especially in the service sector, the increase in supply will generate a crisis situation, with companies that will struggle to find labor but this will not trigger a phase of wage increases, relying on however, a huge reserve of manpower. And all this will not be governed by the unions, which are already overtaken by events.
A labor market that, as a whole, becomes more frenetic without supply adapting to demand, does not help growth or wage bargaining, and risks becoming explosive at the first hint of degrowth.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/le-imprese-non-trovano-i-lavoratori-ma-aumentano-le-dimissioni-come-mai/ on Mon, 06 Jun 2022 05:04:39 +0000.