Lack of skilled applicants hinders job growth in Missouri

The Missouri Division of Employment Security  building in Jefferson City is depicted in this May 2019 News Tribune file photo.
The Missouri Division of Employment Security building in Jefferson City is depicted in this May 2019 News Tribune file photo.


Missouri employers are facing a shortage of skilled workers and are still feeling the effects of the COVID-19 pandemic, a state survey found.

More than a year after the COVID-19 pandemic caused businesses to shut down, employers across the state are seeing fewer applicants and a tight labor market.

The Missouri Economic Research and Information Center released results from the third annual employer survey Dec. 15.

The statewide survey polled more than 800 Missouri employers between June and July to better understand employer needs, job growth, hiring trends, barriers to employment growth, skill shortages and applicant shortcomings.

The survey included only companies with at least five employees, including 541 employers in the state's metro areas and 293 employers from non-metro areas.

Missouri has more than 200,000 employers and about 2.6 million people employed.

During the past 12 months, employment levels stayed the same for 47 percent of the businesses surveyed, and increased slightly or significantly for 25 percent and decreased slightly or significantly for 27 percent.

Of the employers who responded that had significant employment increases or decreases in 2021, 64 percent said it was because of the pandemic.

The biggest factor preventing businesses from expanding employment is a lack of workers with skills and knowledge, the survey found.

Sixty percent -- or almost two-thirds -- of employers responded a lack of skilled workers was the top barrier for growing employment. It's an increase of more than 10 percent from the past two years, in which only 47 percent of employers responded a lack of skilled, knowledgeable workers was a barrier to employment growth.

The lack of workers with skills and knowledge has been the leading barrier to employment growth among Missouri businesses for the past three years.

Additional barriers include economic conditions, general COVID-19 related issues and government policies and regulations -- all of which at least 30 percent of the surveyed employers cited as a hindrance.

While not always a barrier to employment growth, a total of 68 percent of surveyed employers said they were facing a skilled applicant shortage.

It's a dramatic increase from the last time employers were asked about skilled applicant shortages, when only 28 percent of businesses said they had a shortage in 2019.

In skilled trades, for example, skilled applicant shortages have been becoming more common among employers each year. Seventy- two percent of skilled trade employers reported a shortage of skilled applicants in 2021, which is up 23 percent compared to 2019.

Customer service has seen similar shortages during the past few years, jumping from 25 percent in 2019 to 47 percent in 2021.

Poor work habits, a lack of critical thinking, lack of general business or industry knowledge and a lack of communication or interpersonal skills were the top shortcomings among applicants, the surveyed employers reported.

Patient care employers, manufacturing and maintenance employers, and skilled trades employers found the skilled applicant shortages to be most important to their business.

But employers remain optimistic, the survey notes.

Fifty-five percent of the employers surveyed said they planned on expanding employment during the next 12 months, which is more than the previous two years the survey was conducted.

To address the shortages, 81 percent of the surveyed employers said they hired people with less experience than they would have preferred and offered training after hiring.

Additionally, the survey found employers were more likely to hire from outside their local area and offer higher wages to combat skilled applicant shortages this year. Sixty-four percent said they would offer higher wages this year, an increase from the 49 percent who said they would in 2019.

Employers are also looking at more workforce initiatives, according to the survey, including cross-training, increased employee care and engagement, and increased hiring to accommodate demand.

"This could be attributed to a tightening labor market and more difficulty finding employees than last year," the survey notes.

Throughout the survey responses, there was a particular focus on how the COVID-19 pandemic has continued to affect Missouri's workforce.

Roughly 20 percent of the surveyed businesses said they have staff working remotely in 2021, which is less than half of what it was in 2020 when 56 percent of surveyed employers said they had remote staff.

Looking ahead, employers are most concerned about attracting and retaining employees, the survey found.

The tight labor market has replaced COVID-19 troubles as the top concern among employers. Consumer concerns about COVID-19 and employee concerns about the virus were the top two concerns for employers last year.

"In 2021, attracting/retaining talent was more of a concern, showing the effects of a tighter labor market this year," the report states.

Veronica Gielazauskas, assistant commissioner with the Missouri Department of Higher Education and Workforce Development, said the state's civilian labor force has decreased by 38,921 since February 2020.

Fewer individuals are counted as employed and fewer are counted as unemployed, she said.

A smaller labor force means it's more difficult for employers to find employees, Gielazauskas said, which leads to more available job openings around the state.