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Housing costs and remote work contribute to applicant shortage in Oregon, report finds

Hundreds of applications have landed in the mailbox of Woodlark, a luxury hotel in downtown Portland, since it began recruiting after the COVID-19 closures. Convincing these candidates to accept the position is more difficult.

A common reason, said hotel manager Aria Walker, is the commute of service workers who have moved further and further from the city center.

Like businesses nationwide, employers in Oregon are struggling to find qualified candidates for their open positions. But a new study finds that high housing costs in Oregon are a major factor, and the rise of remote work may put some Oregon businesses at an even greater disadvantage.

The Workforce Study is conducted by economic consulting firm ECONorthwest every two years for the Oregon State Workforce, Talent Development Council and Coordinating Commission of higher education. This year is the third, and the first since the pandemic completely transformed the employment landscape.

It is based on a survey of over 300 employers in 11 sectors and interviews with 31.

The hospitality and healthcare sectors are having the hardest time filling jobs cut during the peak of the COVID-19 pandemic, according to the study.

It’s no coincidence that these are two industries that rely on in-person workers, said John Tapogna, the study’s lead researcher.

The hospitality industry, in particular, significantly reduced its workforce at the start of the pandemic, as hotels, bars and restaurants closed or transformed their businesses for normal operations. But as service industries began to reopen and consumer demand grew, businesses rushed to recruit staff in response.

“When the light was green, we wanted to go out – as long as it was safe – to travel, to stay, to eat out, that sort of thing. So the leisure and hospitality sectors were trying to keep up,” Tapogna said. “He was growing faster than people were willing to join him.”

In trying to fill active positions, companies at all levels have increased salaries to attract new employees. Wages have increased across all sectors by an average of 17% from pre-pandemic levels.

But inflation has eroded purchasing power over the past two years. After factoring in higher costs, the actual increase in wages is closer to 5%, according to ECONorthwest, giving job seekers less incentive to enter fields where wages are rising the fastest.

Fuel and rent are among the major contributors to the inflation spike of the past two years.

Travel is one of the biggest costs of working in Woodlark for those who work at the downtown hotel, Walker said. Located at the corner of Southwest Alder Street and Park Avenue, the area is packed with attractions and shopping destinations, as well as plenty of other hotels.

But it’s hard to get there day in and day out, at least by car — and expensive.

“Either you pay for parking or you’re going to pay for gas to have someone drop you off,” Walker said. “It’s certainly been a huge problem for most of my staff, and I can say that for myself as well.”

Other industries are in a better position to adapt to remote work. Most office work shifted to working from home at the start of the pandemic, and few companies dared to impose a full return to the office.

“Remote work is a pretty big disruption,” Tapogna said. “I don’t believe we’re going to go back to anything like the more traditional five-day wait in the office from 9 a.m. to 5 p.m. in a way that people practiced before the pandemic.”

For companies that can accommodate workers telecommuting from home, it’s suddenly less of a stretch to consider that a worker could telecommute from anywhere, including cheaper states.

Oregon companies that have embraced remote work are suddenly inundated with applications from everywhere and everywhere, and their local candidates are facing a lot more competition.

CEO Susan Robinson of Tech Talent Link, a Lake Oswego-based recruiting firm, estimated that 80% of their recruits for positions at Oregon tech companies come from out of state. Before, most were locals.

“Before, the number one question people asked was ‘Well, what does the position pay?’ The number one question we get asked now is “Is it 100% remote?” And if it’s not 100% remote, we can’t even reach them on the phone to screen them. »

Tom O’Keefe, the CEO of Portland-based Syntrio Inc., which had offices in Portland before moving away almost entirely, believes attracting candidates from out-of-states is good for his business. By adjusting salary offers based on the cost of living in the applicant’s home state, the compliance training company is able to save money.

“There’s this issue of pay equity, ‘Well, work should pay what it gets, no matter where I live,'” O’Keefe said. “We certainly don’t buy into that.”

Some companies, Robinson said, will pay a candidate from outside Oregon the same amount they would have offered if the candidate lived in Oregon — an added incentive for employees living in less expensive locations.

That puts Oregon at a long-term disadvantage if it fails to rein in housing costs, Tapogna said.

“What could be holding us back from realizing the full benefits of this shift to remote working is housing underproduction and high prices,” Tapogna said. “It would be more beneficial if Oregon could get its (housing) production moving and could ease the upward pressure on prices.”

–Adriana Gutierrez;

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