Despite waning fears about the COVID-19 pandemic, three out of every four employers said they’ve struggled to find workers this past year, and many said they’re pessimistic about the year ahead, according to the New Jersey Business and Industry Association’s 63rd annual Business Outlook Survey.
The organization also found that 28% of respondents said they plan to sell their business or cease operations due to the pandemic restrictions and cuts to both revenue and staffing. Some were more optimistic: 37% said they did not plan to make any changes and another 31% has adopted a wait-and-see attitude.
“[T]here is no question that the continued challenges are wearing down some business owners,” despite “incredible resolve” many have shown since the pandemic started, NJBIA President and CEO Michele Siekerka said in a Nov. 29 statement.
The survey found that 73% of the 601 business owners interviewed faced problems finding new workers. Many prospective workers – 57% – simply did not show up for their interviews, while 49% opted to stay unemployed and 46% canceled their interviews.
Of those three out of four businesses, 57% reported higher burn-out among current staff, 51% noted a loss in revenue and 50% said they reluctantly had to raise wages to lure in workers.
Seventy-two percent of New Jersey businesses raised wages this year and 73% expected to do so in 2022. Just 24% of employers did not offer a raise this year and 25% did not expect to do so next year.
Just over half of New Jersey’s employers said given the prevalence of remote-work options, in-person-only job offerings were at a competitive disadvantage.
In response to labor shortages, the Murphy administration established a $10 million pilot program of subsidies for hiring bonuses and training wages for workers entering a new industry.
According to Gov. Phil Murphy, the state has so far awarded $500,000 to 60 separate employers under the program.
Supply chain issues and shipping delays have also taken a toll, with 79% of business owners saying they faced such problems in 2021.
A majority of businesses – 59% – said they had no plans to expand in the next year, while 25% said that if they did expand, such as opening a new location, they would do so in another state.
Many businesses cited a poor business climate in the Garden State. Groups like the NJBIA and the New Jersey Chamber of Commerce, as well as Republican former state Assemblyman and gubernatorial candidate Jack Ciattarelli this year have noted New Jersey’s high taxes, regulations and cost of doing business.
“Due to these continued obstacles, it should be a red flag for our policymakers who might consider more mandates or policies that make it more costly to do business in New Jersey,” Siekerka said.
NJBIA found that 57% of companies expect their staffing levels to stay “about the same,” in 2022, while 31% expect moderate increases
Although purchases and sales soared this year – 45% and 43% respectively – compared to 2020 when COVID-19 closures were in effect and purchasing power cratered, 42% of employers actually noted a drop in profits.
“Fewer businesses mean fewer jobs and less revenue for the state as it looks to make an economic recovery,” Siekerka said.
The NJBIA is scheduled to host its 2022 Public Policy Forum on Nov. 30 featuring a panel of legislative leaders including the outgoing Senate President Stephen Sweeney, D-3rd District, and the outgoing Senate Republican Leader Tom Kean, R-21st District. Lawmakers on both sides of the aisle have suggested that recent election losses by Democrats mean that state officials need to focus more economic issues like taxes and affordability.