Competing against unemployment: Businesses may struggle in luring workers back

Competing against unemployment: Businesses may struggle in luring workers back

In this April 30, 2020 photo, a barber shop shows closed and hiring sign during the COVID-19 in Chicago. The U.S. unemployment rate hit 14.7% in April, the highest rate since the Great Depression, as 20.5 million jobs vanished in the worst monthly loss on record. The figures are stark evidence of the damage the coronavirus has done to a now-shattered economy. (AP Photo/Nam Y. Huh, File)

Shanna Ward, 40, of Oklahoma City was furloughed and then laid off from her position at Hertz Corp. this month after nearly 22 years of employment with the company. Like many others, she spent the first week of unemployment worried about how she would make ends meet or how to find another job.

Then her unemployment benefits rolled in.

“I am getting 60% of my former salary, but also another $600 above that through the CARES stimulus,” she said. “I wasn’t even aware I was qualified to receive that. In my first week of unemployment, I got the unemployment check, and then two days later, I got another deposit. I called OESC. They told me that was part of the stimulus.”

That extra $600 per week means Ward is actually making more money collecting unemployment than she was at her full-time job. In fact, she’s making a couple of hundred dollars more a week than she was as an employee.

As of May 8,  33.5 million workers in the U.S. had filed jobless claims, according to the U.S. Department of Labor. On March 27, Congress signed the CARES Act into law, providing temporary economic relief during the pandemic.

Part of that stimulus package expanded unemployment benefits to include additional dollars. In short, everyone who qualified receives their normal unemployment benefits, plus an additional $600 per week.

For employers and companies looking to hire employees when restrictions ease, they may face a hard sell in luring workers back.

Thanks to the robust stimulus package for unemployed workers, employers who have laid off workers amid this downturn may soon find themselves bidding against the federal government to coax workers back into the job market, said Bob Funk Sr., founder and president of Express Employment Professionals.

As the company’s founder, vice chairman and president, Funk and Express Employment Professionals have weathered nine economic recessions since the company’s inception in 1983.

“My philosophy always has been that a company is only as strong as the employees that they have. So, we’re encouraging all of our clients to make sure that they keep the great employees that they have because once you lose them and they’re competing with the government to coax these workers back, it could be a difficult time,” Funk said.

“The job market could be tighter than it has been in the past,” he said. “I think it’s extremely important that they keep those core employees in particular.”

Businesses that have already laid off core employees now face an uphill battle in convincing workers to return, especially if pay isn’t the main motivation.

“The unemployment benefits have become so large that many people are not going to want to come back to work. It’s going to be our responsibility in the private sector to encourage the workers to return to the culture, if you will,” Funk said. “The X’s and the Y’s are really interested in the culture of the companies that they’re working for. To encourage them to come back to meaningful relationships within an organization is extremely important.”

Jeff Seymour, executive vice president for the Greater Oklahoma City Chamber, has a slightly more optimistic view, saying employees will want to return to work. He added that open communication will be the key.

“People will still want long-term security and benefits. I think we are now looking at a more scarce job market. Six weeks ago, the job market was very tight, so now there is going to be more of a fight for jobs,” Seymour said.

Under the CARES stimulus package, workers who qualify can receive 13 weeks of additional unemployment after their 26 weeks of regular state unemployment benefits are exhausted.

“So that’s 39 weeks. It’ll be a while before they’ll want to get off of the unemployment rolls,” Funk said. “If the government does continue the benefit packages that they have, it will be a long time before people will be forced off the unemployment rolls.”

The unemployment benefits awarded through the stimulus package will not last forever. The stimulus lasts through July 31, as it stands right now.

“The more assurance and understanding of the environment workers are coming back to, what the flow of the workload will be and what kind of flexibility workers can expect will be the conversations employers have to have,” Seymour said. “But, with the supply and demand in the labor market not being as tight, many people may not have a wide choice of jobs available.”

Despite making extra, many job seekers do continue to look for another position.

“I do want another job. I don’t want to take those benefits for granted, but I do feel more at ease now that I won’t be struggling to pay bills,” Ward said. “But I do need to find another job. The sooner I get started trying to find another position, the more ahead in the game I will be.”