Higher inflation, rising interest rates, and low unemployment at 2.7% has made hiring a challenge for 600 St. Louis area companies, according to a new St. Louis Community College study.
“Those factors are surfacing as a new set of challenges and issues rather than a year ago when most of the challenges were still viewed as being tied to the pandemic,” said Phyllis Ellison, associate vice chancellor for the college’s Workforce Solutions Group.
The 2023 State of the St. Louis Workforce report found that only 30% of local employers hired workers compared to 32.2% last year.
Part of the problem is a lack of skilled and trained talent, according to the report.
“The trained worker is being pursued,” Ellison told the St. Louis Record. “Companies are scrambling to find that talent and companies are being forced to either hire workers with a lower set of skills and training than what would be ideal or they're having to pay more to get that trained talent. So, if you're a worker, this is great for you. Workers are in the driver's seat right now.”
The study further found that 33% of the workforce in St. Louis has a high school diploma or less, 37% have a bachelor’s degree or more and 30% have some college or training, but less than a four-year degree.
To improve the region's economic future, Ellison advises being more cognizant of how St. Louis youths are being educated.
“We need to focus on educating them on what their career opportunities and industries could be,” she said. “When you have a big labor pool, you have the luxury of hoping that some people get it right and figure things out for themselves and find their way to an industry that's of interest to them.”
Another factor that’s impacting the employment market is a rise in aging workers who will be retiring in ten years.
The study determined that the largest share of the workforce is made up of 35-to-44 year olds at 22% with the 55 and older demographic increasing to 25% from 21% last year.
“We have fewer young workers coming into the workforce and it’s a long-term trend,” Ellison said. “There are just simply going to be fewer workers available so we're going to have a really tight labor force. We're not going to have enough workers 20 years from now, and if we don't rethink our processes and our technology, we won't be able to have the same output of goods and services that we have today.”
The spotlight of this year's report is on advanced manufacturing, which is the state's fourth largest employer of 118,000 workers in small and midsized businesses, not just Boeing or General Motors.
"The reality today is that manufacturing is a much higher tech industry and we need to help our youth understand that there is a really interesting future there given the technology, and that advanced manufacturing may just be a very different opportunity for them than what they've been expecting," Ellison added.