Staff Shortage, Omicron Fed, Growth Sluggish in Q4
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indicates HR pressure caused by recruitment challenges and increase in Covid-19 cases stunted growth or cut activity in the fourth quarter. But many companies have seen those pressures ease, indicating a diminishing impact from the Omicron variant.
CEO Christopher Kempczinski said at a conference call with analysts in mid-December, staffing challenges at McDonald’s had become so acute that its restaurants had to cut hours by about ten%. As of the end of January, only 1% of McDonald’s restaurants were still reducing working hours, he said.
“What we’ve seen throughout the pandemic is an economic slowdown from each successive wave of smaller and smaller cases,” said Nick Bunker, an economist at the job site. , an economist at the job site. “While Omicron has disrupted daily life, it does not appear to have had much of an impact on the labor market in terms of hiring. It looks like we are poised for continued strong progress into 2022.”
Job growth stronger than expected also showed that the effects of variation can be adjusted as Omicron peaks in multiple regions. US employers added 467,000 jobs in January, beating economists’ expectations.
However, the rapid increase in Covid-19 cases has disrupted operations for some manufacturers and some companies continue to experience staff shortages. According to census data, nearly 8.8 million workers, or about 6% of the U.S. payroll, were out of work in the first 10 days of January because they were sick or caring for the sick. The absence, since that period and earlier in the Omicron boom, has affected companies’ ability to fill orders, maintain regular business hours and meet growing demand.
PPG Industries Inc.,
A Pittsburgh-based maker of paints, coatings and specialty materials, some of the company’s plants have employed 40 percent of workers in recent weeks, CEO Michael H. McGarry said. on an earnings call last month.
The company has four times as many employees absent from work because of Covid-19 in December and January, compared with October and November, Mr. McGarry said.
Mr. McGarry said: “The hardest job at PPG right now is the factory manager. “They wake up in the morning, check their phones to see how many people have called out sick, then they go to work.”
Mr. McGarry said in a statement that PPG’s absenteeism rate dropped significantly in the second half of January, adding that he was optimistic that the trend would continue.
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The company’s earnings overall beat expectations during the holiday quarter. About half of the S&P 500 components have now reported results, and analysts estimate that profits from the index’s constituent divisions rose 29% in the fourth quarter from a year earlier, according to FactSet. This is up from the 21% growth forecast at the end of September.
suspension of some air transport services in the airline’s Express network, which transports goods on board, as the virus has sickened many crew members and operations staff. The carrier, which incurred an additional $470 million in costs last quarter because of labor shortages, said last week it had resumed all suspended services.
Domino’s Pizza Inc.
says they will give customers a $3 credit if they take orders — part of the pizza chain’s move to address labor shortages.
Millions of workers retired in recent months, in many cases attracted by better opportunities or higher wages in a vulnerable labor market. In December, job openings and labor turnover hovered near an all-time high, according to federal data.
CEO Ryan R. Marshall said PulteGroup intentionally slowed sales, in part due to labor shortages in the construction and supply sectors. The latest increase in Covid-19 cases has made it difficult for contractors to find field crews, and even more difficult to scale their teams to follow, said Marshall. timely demand. He said he doesn’t expect the challenges to go away anytime soon.
said higher revenue has affected its operations. CEO Devin Stockfish said less experienced employees may need more training to develop their expertise to work in a sawmill or similar environment.
The company is focusing on ways to help people get up to speed faster, he said. But staff shortages because of Covid-19 or quarantine make it harder to find shift workers, Mr. Stockfish said. He said he did not expect labor challenges to ease immediately in the first half of the year.
“There is a real challenge in finding labor, and that is system-wide. Not only our industry but our industry is definitely affected: find truck drivers, logging contractors, find employees to work in factories, really across the entire supply chain,” he said. Stockfish said. “I think that makes it a lot harder to actually ramp up that production.”
Executives have struggled for months to cope with HR challenges. Some have raised their salariesdangling higher signing bonussweet interests or introspection, trying to make their company attractive workplaces that will attract more applicants.
Scott Keller, senior partner at McKinsey & Co, who advises CEOs.
Those workers may not be the most senior in the organization’s hierarchy, but could be the sales manager overseeing the company’s three largest accounts or the person in charge of digitizing operations, Mr. Keller said.
“CEOs have started to think very clearly about which roles are most important,” said Keller. “I think they are discovering roles that the CEO should pay attention to, those roles below and within the organization.”
That concern extends to supply chains. At the defense contractor
Raytheon Technologies Corp.
Chief Executive Officer Greg Hayes pointed to a shortage of skilled workers at suppliers, calling the shortage of metal casting welders the most important shortage right now.
Raytheon is working with its suppliers to find the materials they need, but “that’s not going to happen here in the first quarter,” Mr. Hayes said on the company’s earnings call. “We see that we will have a slow Q1.”
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https://www.wsj.com/articles/staff-shortages-fed-by-omicron-curbed-growth-in-fourth-quarter-11644143402?mod=pls_whats_news_us_business_f Staff Shortage, Omicron Fed, Growth Sluggish in Q4