Last year, it is estimated that the United States lost 10 million jobs during the height of the pandemic, according to the U.S. Department of Labor. However, as the economy began to rebound from the effects of social distancing and state and local stay-at-home orders that were enacted to avoid the spread of the coronavirus, “Help wanted” signs began decorating a spectrum of businesses across the country, including recyclers and waste haulers.
While life seems to be returning to normal with the availability of the vaccines, a labor shortage is in full force in many places. Recyclers and waste haulers are now competing among themselves and other industries to hire candidates to fill open positions.
“Hiring has grown and changed during the pandemic,” says Patrick Hudson, vice president of customer experience for Phoenix-based Leadpoint Business Services, a provider of work teams and operations support services to the recycling industry. “Due to several reasons, we’ve seen a reduced interest in applying for these kinds of jobs for both passive and active applicants.”
This has disrupted the collection of waste and recyclables and scrap processing, creating cash flow issues and slowing processing times.
To understand how to solve the hiring problem, it is important to understand how it began and its impacts.
A viral start
Hudson says several factors contributed to the initial slowdown in hiring and the labor shortage that persists today.
Before the pandemic began, companies such as Houston-based Waste Management (WM) had felt hiring pressures related to the aging workforce. WM’s COO John Morris says because of the increased number of retirements and a shrinking pool of younger applicants, the company was struggling.
In March of 2020, when the country began to shut down because of the pandemic, companies halted hiring and reduced staffing to save money. This led to a historic unemployment rate of 13 percent during the height of the pandemic, according to the U.S. Bureau of Labor Statistics.
The rising rate of unemployment led the federal government to launch enhanced benefits, which some industry leaders say they believe led to a decrease in interested applicants. Bill Keegan, president of Dem-Con Cos., a waste and recycling company based in Shakopee, Minnesota, says the increased unemployment benefits demotivated the labor force from seeking jobs.
“I can really only speculate on this, but I think the enhanced unemployment packages that we have federally could be contributing to the crisis based on what I’m hearing from some people,” he says.
Now that the country is opening back up, Hudson says the biggest factor contributing to the ongoing labor issues in the waste and recycling industry is outside competition for the same labor force. Hudson describes it as the “Amazon effect,” in which companies in other industries, such as technology and retail, are offering more competitive salaries as well as benefits. This means potential workers are switching industries for better opportunities.
“It’s really a hypercompetitive market to get workers right now,” Hudson says. “Our industry is losing out to companies in other industries like Amazon because there has been a failure to meet the growing demands of this post-pandemic labor force,” he adds.
As a result of the competitive landscape for hiring, Keegan says turnover rates also have increased dramatically. This is because municipalities and companies in the waste and recycling industry are speeding up their hiring processes to ensure that certain positions are filled only to have new hires leave shortly afterward for different jobs.
“I think the enhanced unemployment packages that we have federally could be contributing to the crisis based on what I’m hearing from some people.” –Bill Keegan, President, Dem-Con Cos.
The impacts of the crisis
Hudson says it is hard to pinpoint one specific region of the country that has been most affected.
“Every time we put a fire out in one region, a fire brushes up in a different area,” he says. “It’s not necessarily been one area that has been hit the hardest. It kind of jumps around.”
Hudson says recyclers and waste haulers in the South have not been as hurt by the situation. He says this is because a majority of the industry in the South adapted quickly to the pandemic by improving hiring practices.
Morris says WM’s operating costs have increased because when the country opened up earlier this year, processing volumes spiked, and fewer workers were available to handle it. However, he says the company overcame this issue by offsetting a portion of its workforce using new route optimization tools for trucks and artificial intelligence to help with sorting at material recovery facilities.
Still, Morris says this is the first time he has seen a crisis like this during his time at WM.
“Never in history have we seen massive demographic shifts combined with social change and ongoing generational transitions,” Morris says.
The crisis isn’t just affecting private waste haulers. In Portage County, Ohio, the Portage County Solid Waste District, which provides service to 16 communities, has reduced collection services from weekly to every other week. It also has considered closing drop-off sites.
“It’s come down to a safety concern for our drivers,” says Bill Steiner, director of the Portage County Solid Waste District. “We have five workers, and they’d be driving 70 hours a week each. You can’t have that happen.”
As a result, some of the cities the district serves, such as Streetsboro, Ohio, have hired private collection companies to handle waste management.
Other communities, such as Chattanooga, Tennessee, temporarily shut down recycling collection services. The city’s curbside recycling program was halted for one month because it struggled to fill 32 open positions in its collections program. The program was plagued by a mix of sudden resignations, high turnover and poor pay that contributed to the decline in workers, New York-based Business Insider reports.
According to Business Insider, drivers working for the city were being paid $29,865, which is 118 percent less than what drivers in the private sector are paid. Chattanooga Mayor Tim Kelly says the city will increase pay by 45 percent to attract more drivers.
Giving it a shot
While there isn’t a definitive way to overcome the current crisis, that hasn’t stopped companies from trying. Dem-Con and WM have been working to improve the work experience for new and current employees.
Keegan says his company is trying to find a solution to labor shortages by placing a heavier focus on employees. Dem-Con has raised wages for its workers by 7 percent and also has improved its benefits package. The company is spending about three times more on recruitment efforts, as well.
“What’s really been important to us is that we put our people first,” he says. “What that means to us is offering competitive wages and extremely competitive benefits packages so that our employees know they matter to us.”
WM also has placed a heavier focus on overcoming the reduced labor pool. Morris says the company has been hosting events throughout the country to attract more workers. Additionally, WM is offering signing bonuses for essential positions, such as drivers and technicians. The company is considering increasing wages for certain full-time frontline workers, as well.
“In April, we launched ‘WM Your Tomorrow,’ an education and upskilling program for team members,” Morris says. “This program provides an opportunity for benefit-eligible team members to earn a GED or college degree at no cost to them,” he adds.
Morris says that the hardest part about the pandemic and the crisis has been making sure his workers are safe and taken care of.
“Never in history have we seen massive demographic shifts combined with social change and ongoing generational transitions.” – John Morris, Chief Operating Officer, WM
An industry changed
Morris says it is unclear when the industry will bounce back from the hiring crisis. However, companies are finding new ways to keep up with outside competition and attract a labor force dedicated to working in the industry.
Hudson says the waste and recycling sector never will return to what it was before the pandemic.
“One of the things that I keep hearing is that there’s a belief that things will return to normal after a while,” Hudson says. “We are going to come out of this with a new normal. Nobody really knows what that is going to be. We need to be as nimble as we can and focus on adapting quickly and creating a workplace that folks want to work for.”
Some sources say the current hiring crisis permanently will change the ways the private and public waste and recycling sector hires employees and the ways the industry manages its turnover rates. Steiner suggests that the crisis also will change organizational work environments and how employees interact with employers.
Industry leaders do not have clear answers to what needs to change for the hiring difficulty to end. Until definitive answers can be found, industry leaders such as Hudson, Keegan and Morris say they will continue to find ways to understand and meet the labor shortage head-on.