🔒Talent recruitment firms see boom in business as they battle their own labor shortages

Aquinas Consulting, a Milford-based recruitment firm that focuses on staffing IT and engineering positions, is getting more business because of a nationwide labor shortage.

But the company is also having trouble absorbing the work, because it’s short-staffed.

“In the last six months, companies have been trying to get work done and they are having real difficulty in finding workers,” said Aquinas President Thomas Mercaldo.

According to an August study by the Society for Human Resource Management (SHRM), nearly 90% of the 1,200 U.S. employers surveyed said they were struggling to fill open positions last summer. Seventy-three percent said they were also seeing fewer applications for hard-to-fill positions.

The upheaval in the labor market amid the COVID-19 pandemic has been colloquially dubbed “The Great Resignation.” Right now recruitment and staffing firms in Connecticut say they are seeing both opportunity and trouble. They’re experiencing a significant boom in business, while, in some cases, they also struggle to meet that new demand due to their own staffing issues.

Aquinas Consulting, for example, saw only three of its 72 call center workers return to work when the company reopened earlier this year. (The call center wasn’t deemed essential during the pandemic’s peak and closed for a period of time.

Aquinas currently has about 200 employees, and call center shortages have stymied business in recent months, Mercaldo said.

Despite that challenge, 2021 is proving to be a banner year for the company. Revenues are up about 62% compared to last year to $26 million. In 2019, Aquinas generated $11 million, Mercaldo said.

“We do have a small number of new clients coming in… [but] revenue growth is primarily among our existing customer base,” Mercaldo said.

For example, Aquinas has helped a major international hospitality industry client find 35 employees; pre-pandemic that company only had three workers from Aquinas.

Talent recruitment strategies

As recruiting firms see more business they’re advising clients to take numerous steps to woo talent. The challenge in Connecticut is significant.

There are 79,500 fewer people working now compared to February of last year, despite around 70,000 job openings, according to the Connecticut Business & Industry Association.

Laura Dale Pedersen, president and CEO of Middletown full-service staffing firm A. R. Mazzotta Employment Specialists, said many of her company’s manufacturer clients are boosting wages, while clients looking to hire office workers seem to be focusing more on expanding perks like allowing employees to work from home.

The dynamics in Connecticut’s labor market are unlike anything Pedersen has seen in her nearly four decades of working in the staffing industry, she said.

“Through the years, it’s really been more of an employers’ job market, and that has really changed; it’s now a job-seekers’ market,” Pedersen said. “There are many more jobs than there are people who are willing or able to work them.”

With the tables turned on employers, the ones taking steps to sweeten the pot for prospective workers seem to be having less difficulty staffing up than the ones sticking to the status quo, Pedersen said. But hiring new employees isn’t the only staffing problem companies face.

The U.S. Bureau of Labor Statistics reported that 4.4 million people in the country quit their jobs in September, a record high that amounts to 3% of the nation’s workforce. Pedersen said employers are feeling pressure from this trend, as finding and training new workers costs money, time and productivity.

“Retention is a big thing right now,” Pedersen said. “A lot of people are moving from one job to another, and that’s expensive for employers.”

Amid the reshuffle, A. R. Mazzotta is growing, Pedersen said. In addition to increasing its services with existing clients, the company’s customer base has grown by about 20% in the past year.

Bonuses and flexibility

Patrick McHale, a partner at Hartford labor and employment law firm Kainen, Escalera & McHale PC, said he’s seeing employers offer different kinds of incentives to woo new employees and keep existing ones. Restaurants, retail outlets and other service industry employers are offering signing bonuses and pay raises, while managers at office jobs are allowing greater flexibility, in terms of what hours people work and how much they have to come into the office.

“There are two different themes that come out of this: the consumer-facing businesses like restaurants and retail stores, they’re having a very hard time attracting enough people to run their businesses,” McHale said. “[White collar] employers are increasingly having to compromise on how much time they need [workers] to be in the office, if at all.”

Many people thought that once expanded federal unemployment benefits expired in September, employers would have fewer problems finding workers, McHale said, but that hasn’t been the case.

While companies are fretting about the current labor market, McHale said it’s incumbent on them to think outside the box for ways to attract and retain employees. The signing bonuses for restaurant and retail jobs, for example, are new and seem to be working for some companies, McHale said. Additionally, a my-way-or-the-highway attitude toward office employees who want to work remotely may not be feasible for many businesses.

“I think this is going to be an ongoing modification in the way businesses do business,” McHale said. “I think employees are going to demand it.”

Darren Varano, president of Bloomfield-based headhunting firm Grayling Associates Inc., said demand for his company’s services has increased about 50%, but he’s been unable to hire three additional people to take on many more clients.

Varano said he’s thinking about moving his company to states like Florida, Virginia and Texas, where he believes people are seeking work in greater numbers.

“The kids in this state are not looking to work,” Varano said. “[Prospective employees] will demand higher salaries, higher guaranteed money. … I think people in general demand more.”