No, dear readers, this will not be a blog about international politics. I’ll leave that expansive subject to better educated and better prepared writers. The Mexican standoff to which I refer is the current US job market.
For those to whom the phrase is unclear, Wikipedia defines a Mexican standoff as follows:
“ . . .(it is) a confrontation in which no strategy exists that allows any party to achieve victory.”
But why describe the current US job market as a Mexican standoff? Because it resembles one. The US has a near record number of job openings, yet companies are struggling to hire workers to fill them. If one is to believe sites like ZipRecruiter, LinkedIn, Indeed and others, workers are applying. Many are being rejected, others are turning down offers received. The disconnect appears to be that workers are seeking higher pay, more job flexibility and remote working options while employers are (still) seeking candidates at lower pay rates, while insisting that hirees work on-site and/or be willing to work overtime/weekends.
Who will blink first?
My local pharmacy seems to believe it will be the workers. This national chain location has failed to hire enough workers to staff its pharmacy counter on weekends. The solution? Offer no prescription services on Saturdays and Sundays. I had mistakenly thought that providing customers with their doctor-prescribed medications would be the primary objective of a “pharmacy.” Not so. For this very profitable firm, discommodating local customers appears to be preferred to the alternative of paying more to fully staff this location.
In fairness, changing one’s set assumptions is difficult. Particularly for a publicly traded firm attempting to meet analyst expectations. Nonetheless, a great many pre-Covid “givens” are no longer valid. New cars are fewer and more expensive. Order lead times are longer. Product delivery shortfalls are frequent. I could go on.
For small businesses, with their limited leverage and resources, the options are few. Many of my clients are also finding it difficult to fill job openings. Even when offering increased wages, more extensive benefits, and flexible work options. At a time of year when FY 2022 budgets are being prepared, most are planning to pay more to get work done next year. I cannot say that they are pleased by this development, but “staying the course” will not help them achieve their goals. They have no choice but to end this Mexican standoff. Clinging to the hope that everything will return to “normal” is not a viable plan for small business success.
That reminds me . . . it’s time I planned to switch pharmacies.
Mr. Dragone has spent the past twenty years as an acting/consulting CFO for a number of start-ups in a wide range of industries. Peter’s prior experience is that of a serial entrepreneur, managing various start-up and turnaround projects. He was a co-founder of Keurig.