CEOs from Urban Outfitters to Chewy can't stop talking about the labor shortages that they see both nationally and internationally.According to Sentieo transcripts, which are financial research companies, the number of corporate calls that include at least one mention about labor shortage is on the rise. There had been less than 60 mentions of labor shortage per quarter up to 2021. This was according to transcripts collected by Sentieo, a financial research company. The second quarter of 2021 saw 136 instances of labor shortage.On a May 20 analyst conference, Marie Robinson, executive vice-president and chief supply chain officer at Sysco, a food-distributing company, stated that it is impossible to have a conversation across America with any businessperson.Morgan Stanley Research Note, June 28, mentioned this trend. It suggested that increasing labor market tightness in a growing number of industries was raising the possibility of wage increases.Deficiencies in labor at restaurants, hotels, and building sitesCEOs and other executives who spoke on corporate calls discussed how labor shortages had impacted their operations. Delays in construction approvals and delays in building residential homes. Which part of the meat is being consumed (deboning dark meat requires greater labor). Simplified menus were created to alleviate the strain on already overloaded restaurant kitchens.Patrick Pacious, CEO of Choice Hotels Internationals (which owns Comfort and Quality Inn hotels), stated that staff shortages have led to many hotel owners folding their sheets and towels and making beds in our hotels.Covid-19 still plays a role in bringing back workersMany CEOs reminded investors of the ongoing pandemics impact. Trifast's CEO Mark R. Belton stated that its factory in Malaysia is currently only allowing 30% of its workforce to enter due to extended lockdowns.The return of migrant workers has also been slowed by the pandemic. According to Tikkavarapu Sandeep Kumar Reddy (executive director of Gayatri Projects Limited), approximately 40% of Indian laborers had returned to their homes when Covid-19 struck.Automation and wage pressuresCompanies from FedEx to Chewy are having to raise their wages because of labor shortages. On the company's quarterly earnings call, Sumit Singh, CEO at Chewy (a retailer of pet supplies), stated that they invested in wages and short-term incentive, which helped to some extent overcome [fulfillment centre] staffing constraints.Many CEOs stated that their companies are using robotics and automation to offset labor shortages. FedEx President Raj Subramaniam stated that they are doing all we can to improve our services, including wages and technology. He spoke on June 21 during the company's fiscal fourth quarter earnings call.In some cases, however, even higher wages are not sufficient. On a June 16 conference phone call, Mark Schiller, CEO of Hain Celestial Group (a food and personal care company), stated that while wages have been raised in some areas, in other places there is still a labor shortage. We are doing our best with what we have been given. While we have fared fairly well so far, it is putting pressure on our P&L.Anthony Capuano (CEO of Marriott International) suggested that hourly labor competition is more intense than ever before. We are not only competing with other hospitality businesses for labor. Perhaps more than any other recovery, we were also competing for labor with companies outside of our sector, such as retail.The end of unemployment benefits and hiringThe topic of unemployment benefits continues to be discussed in the US. 26 states have already ended extended unemployment benefits by July.Steven Spinner, CEO of United Natural Foods (a large distributor natural foods and other health products), stated that he does not believe the trucking industry's driver shortage is due to unemployment benefits. Our drivers are highly skilled. Spinner said that they are skilled and knowledgeable. He believes that the temporary mismatch between the demand for workers and the pent-up demand will be temporary.However, business leaders, from Capuano at Marriott and the CEO of Dave & Busters, acknowledged that extended unemployment benefits were a factor. Capuano said that some labor will be available if the emergency unemployment benefits are ended and in-person education is resumed to ease the burden on parents who would otherwise work.
