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Labor shortage is keeping the job market recovery in 'first gear': ManpowerGroup CEO

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Hiring is picking up with employers reporting the strongest outlook since 2000, according to Manpower Group’s latest Employment Outlook survey.

But there’s a big challenge facing businesses — the talent supply remains tight— and that’s keeping the labor market recovery in "first gear."

“The labor markets are still struggling to get out of first gear as it relates to the supply of the workforce,” ManpowerGroup CEO Jonas Prising told Yahoo Finance Live. “There are childcare concerns, there are still lingering health care concerns, and then there are support mechanisms.”

Overall, one in three employers surveyed reported trouble finding talent, with nearly half of employers reporting difficulty filling job openings in operations and logistics, while 23% reported similar issues for manufacturing and production.

FILE—In this file photo from May 5, 2021, a vehicle speeds by a hiring sign offering a $500 bonus outside a McDonalds restaurant, in Cranberry Township, Butler County, Pa. Pennsylvania will resume work search requirements in July for hundreds of thousands of people receiving unemployment compensation, a top Wolf administration official said Monday, May 24, 2021. (AP Photo/Keith Srakocic, File)
FILE—In this file photo from May 5, 2021, a vehicle speeds by a hiring sign offering a $500 bonus outside a McDonalds restaurant, in Cranberry Township, Butler County, Pa. (AP Photo/Keith Srakocic, File)

While the labor shortage is putting stress on companies of all sizes, small businesses in particular are at a disadvantage, according to Prising.

“Small businesses tend to have greater difficulty finding people right now because they can't afford the significant increases or bonuses to incite workers to come off the sidelines and join their business,” Prising said. “That is a big disadvantage.”

U.S. small-business confidence fell in May for the first time in four months, in part because of the labor shortage, according to a survey released this week. The findings come on the heels of a recent report by the National Federation of Independent Business (NFIB) which found that a record-high 48% of small business owners reported unfilled job openings in May, more than double the historical reading of 22%.

“Very much in the same way that we are seeing an imbalance between demand for workers and supply of workers in the U.S., many other countries are dealing with the same issue,” Prising added. “I think that's just the aftermath of working its way through the pandemic and coming to a place where we can see a normalization of normal labor market dynamics, as we would expect in a recovery coming back from a recession.”

Seana Smith anchors Yahoo Finance Live’s 3-5 p.m. ET program. Follow her on Twitter @SeanaNSmith

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