Main Street’s labor problem is weighing on business owners as summer hiring picks up

As summer arrives, Alison Schuch, owner of Fells Point Surf Co., is down about 10 workers at her two beach retail locations as a perfect storm of reasons drives a post-pandemic hiring crunch.

A lack of affordable summer housing, scant child-care availability, inflation and the rebalancing of work and life in recent years have combined to make the applicant pool different from what it once was.

“It’s just been hard to kind of balance the expectations of the team and the needs of the business and the needs on both sides,” Schuch said, “and then also the expectations of the customers — because, you know, having to close early because we don’t have enough people.”

“Customers want what they want. Convenience has become a huge important factor, because you can go online and get anything you want,” said Schuch, who has Fell’s Point Surf Co. stores in the Fells Point area of Baltimore, Maryland, and Dewey Beach, Delaware, as well as sister store Tangerine Goods in Bethany Beach, Delaware.

With summer hiring season in full swing, small business owners such as Schuch have lingering concerns about filling roles to meet consumer demand. Labor quality was the most important problem for nearly a quarter of National Federation of Independent Business, or NFIB, members surveyed in May, according to the small business advocacy organization.

Labor quality has fluctuated between being the No. 1 and the No. 2 most important issue for NFIB members in recent months. The sectors where businesses are feeling the labor shortage most acutely include construction, transportation and manufacturing, but retail and restaurant owners are also reporting challenges.

In May, 44% of owners reported job openings they couldn’t fill, while 38% said they were searching for skilled workers, the NFIB said. While owners have concerns about future business conditions and a potential recession, they’re still trying to hire and raise wages to entice workers.

Brendan McCluskey said he’s feeling the lack of talent available for hire in his Baltimore construction business, Trident Builders. Finding skilled workers is among the biggest issues he said he currently has in a competitive landscape, and the shortage is driving wages higher.

“We’re on the precipice of having some real opportunities for growth, and [the concern is] am I going to be able to staff it?” McCluskey said. “I’m trying to get to the next level and almost like the next weight class, and which would allow us to stabilize our revenues, grow, invest in people, invest in systems, frankly, just make more money.”

Comprehensive immigration reform would also help fill the gap, according to some industry advocates, such as the National Restaurant Association. The group has urged Congress to take action to strengthen visa policies and the Deferred Action for Childhood Arrivals program, shorten waiting periods for asylum seekers and create the Essential Workers for Economic Advancement program. EWEA, which was introduced in a House bill last month, would allow workers to come to the U.S. to fill “market-driven” roles on nonimmigrant three-year visas.

“There is no silver bullet to solving the industry’s recruitment challenge, but even incremental changes in immigration policy would be a significant step forward,” Sean Kennedy, executive vice president of public affairs at the National Restaurant Association, said in a statement.

“The restaurant industry is growing its workforce at a faster pace than the rest of the economy,” he added. “We expect to add another 500,000 jobs by the end of the year, but with one job seeker for every two open jobs, operators are fighting to fill positions. Growing the workforce with legal foreign workers would be a win-win for employers in desperate need of employees and individuals seeking training and opportunity.”

Back at the beach shops, Schuch said she’s noticed a slight pullback in consumer spending as shoppers seem to be watching spending more closely. But she hopes to continue to operate with a long-term mindset, even in the face of staffing challenges.

Keeping workers happy is top of mind.

“We’re only as strong as our weakest link, and I want us all to be strong and I want people to enjoy coming to work,” she said. “I think people is probably the No. 1 thing that keeps me up at night right now.”