Arizona’s Workforce Remains Strong but Small Businesses Struggle to Hire

by Daria Orozco

As a result of the COVID-19 pandemic, Arizona’s workforce has been in a state of transition. Despite the turbulence, the state has managed to maintain steady job growth with positive indicators in various sectors, including healthcare and education. In fact, the unemployment rate in Arizona is at an all-time low of 3.9%, which is lower than the national average of 4.6%. However, due to Arizona’s tight labor market, small businesses are finding it challenging to attract employees. According to a survey from The Harris Poll commissioned by Express Employment Professionals, 27% of hiring managers have reported high stress from an inability to fill open positions.

One of the main causes of this challenge is the pandemic’s disruption of the job market, resulting in more job openings than job seekers. Many workers are opting for remote or part-time work, with 22.1 million people choosing to work part-time voluntarily, and many others are choosing to take a break from the workforce altogether. Those who are on the job hunt have more options than ever, allowing them to be more selective about the jobs they take, ultimately creating a competitive atmosphere for employers. This results in an even larger obstacle for small businesses that tend to be perceived as less stable compared to large corporations and may not offer the same opportunities for career advancement. Thus, small businesses must adopt creative recruitment and retention strategies, such as flexible work options, competitive compensation and benefits packages, and unique company culture, to entice potential employees while navigating Arizona’s current landscape. Additionally, small businesses may want to consider alternative sources of recruitment, like outsourcing their hiring to a professional staffing firm.

The current job market in Arizona is diverse with healthcare, education, technology and manufacturing industries experiencing robust growth. However, other roles, such as cashiers and sales associates, are experiencing a decline due to the rise of e-commerce and automation technology. This trend is expected to continue as more and more companies adopt automation technology, resulting in administrative and support roles decreasing in demand.

For the remainder of 2023, skilled labor will continue to be in high demand for Arizona’s workforce while the tight labor market likely won’t ease up anytime soon. Many companies may adopt a wait-and-see approach due to the uncertainty in the overall global economy and will likely remain hesitant to add to their workforce. 

While Arizona’s workforce remains in a state of transition with small businesses struggling to attract employees, the state is still experiencing strong growth in various industries and the demand for skilled labor remains high. With creative recruitment and retention strategies, as well as continued growth in thriving industries, Arizona’s workforce is expected to remain strong for the foreseeable future.

Daria Orozco, CSP is franchise owner of Express Employment Professionals, the top staffing firm in the U.S.


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