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Hiring Hiring

Restaurants are hoarding unruly employees (Photo by Farrah Skeiky for The Washington Post via Getty Images)

By Tyler Hummel Leaders Staff

Tyler Hummel

Tyler Hummel

Tyler Hummel is a news writer for Leaders Media. He was the Fall 2021 College Fix Fellow and Health Care...

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Oct 31, 2022

Companies Are Reluctant to Fire 

Ongoing staffing shortages are forcing employers to hoard unruly employees. 

Key Details

  • “Corporate America has been so eager to retain staff amid the pandemic that companies have become increasingly reluctant to fire staff—even if they are flagrantly breaking the rules,” says LinkedIn News.  
  • Two restaurants in Provo, Utah—Fat Daddy’s Pizzeria and Bistro Provenance–-are among the businesses being affected by staffing issues. 
  • The owner Chad Pritchard has been forced to avoid firing or seriously disciplining his employees to meet the demands of his businesses. 
  • “Consistent transportation issues have ceased to be a deal breaker. Workers who show up drunk these days are sent home to sober up. Employers in Provo, a college town at the base of the Rocky Mountains where unemployment is near the lowest in the nation at 1.9%, have no room to lose workers,” reports the New York Times. 
  • “Provo’s desperation for workers is an intense version of the labor crunch that has plagued employers nationwide over the past two years—one that has prompted changes in hiring and layoff practices that could have big implications for the U.S. economy,” the New York Times continues.

Why it’s important

Various economic factors have created a paradox where only 3.5% of people are unemployed but businesses are struggling with ongoing staffing shortages and inflation continues to skyrocket. 

As we previously reported, employees are beginning to discover they have the power to demand greater flexibility and opportunity. They are seeking greener pastures with more opportunities for growth, flexibility, remote options, or higher wages. 

This has left large sectors of the workforce struggling to meet labor demands, although the possibility of an upcoming recession within the next 12 to 18 months could raise unemployment. Policymakers are expecting short-term economic and employment issues as high interest rates slow down the economy. 

Retaining troublesome employees may be the best short-term solution until the economy stabilizes. 

“Labor hoarding offers a glimmer of hope that could help the Fed’s more benign unemployment forecast to become reality: Employers who are loath to jettison workers may help the labor market to slow down and wage growth to moderate without a spike in joblessness,” says the New York Times.

Notable quote

“The reasons for hope extend beyond labor hoarding. Because job openings are so unusually high right now, policymakers hope that workers can move into available positions even if some firms do begin layoffs as the labor market slows. Companies that have been desperate to hire for months may swoop in to pick up anyone who is displaced,” says the New York Times.

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