The End of Federal COVID-19 Unemployment Benefits: What Employers Need to Know

If you’re among the 73.9% of U.S. employers struggling to find qualified applicants, the recent expiration of COVID-19 federal unemployment benefits could offer some solace for your talent shortage woes. However, it may take some time to see a noticeable impact.

Since March 2020, unemployed Americans have received an additional $300 in Pandemic Unemployment Assistance under the CARES Act and extended by the American Rescue Plan Act. On Sept. 6, those expanded benefits came to a halt, impacting more than 7.5 million people.

Whether or not the extra $300 hindered workers from returning to the labor force – as many earned more through unemployment than through on-the-job wages – employers have been optimistic that the end of federal benefits would elicit a wave of applicants to fill their long-open positions.

Yet, iHire saw no magic spike in job applications after the cutoff. In fact, candidate responses to job postings on iHire remained steady the past two months, averaging about 6,500 per week across our 57 industry-specific talent communities.

That’s not to say an influx of candidates isn’t happening or on the horizon. It may just take longer than expected to see the effect – and that could vary by sector, geographic region, and even employer size.  

Prepping for a Potential Application Overload

Nevertheless, some fortunate companies are seeing an increase in job candidates.

Mike James, HR Manager at Coffeeble, noticed an uptick in interest in the company’s job postings started in mid-August, right before federal unemployment benefits ended.

“We've had several open positions for a while now and have really been struggling to maintain productivity while understaffed,” James said.

Although it’s a good problem to have when understaffed, an inpouring of candidates inadvertently can lead to more productivity issues.

“I wish job searchers would have started looking earlier, as it's nearly impossible to sift through this many applications, vet resumes, conduct multiple interviews, and onboard candidates within two weeks,” James added.

Our advice for hiring managers? If you’re in over your head with applicants, narrow your talent search to a specific industry and use pre-screening questions in your applications to weed out unqualified candidates. Be as specific as possible in your job descriptions (for example, do you need someone with 10 years of experience? Must the candidate possess a bachelor’s degree?). Similarly, “spell out” the application requirements explicitly (for instance, is a cover letter required?), so you receive candidates who are genuinely interested in your role.

HIRING TIP:

It’s not uncommon to receive qualified applicants who have spent several of the last few months unemployed, whether due to COVID-related layoffs, family and health issues, or consideration of complete career change. During interviews, ask these candidates how they spent their time unemployed. Did they volunteer, take an online course, or explore a new industry? Their answer to this interview question can provide insights into their “downtime” and show they continued to further their professional and personal growth – a great quality of any candidate.

If you don’t have the bandwidth to tackle a proliferation of applications, think about how you can source candidates from your talent pipeline. Reach out to previous applicants who may still be interested in a position with your company, ask your staff for referrals, or promote from within. The latter is a strategy that Jessica Lipton, Founder of Elevate Delta 8, is embracing, especially when filling more skilled roles.

“With fewer high-quality candidates that lacked the necessary skills that we needed, we started hiring more internally for positions that were important and needed higher qualifications,” Lipton said. “The less-critical jobs were much easier to fill externally, as they did not have lofty requirements. Internal hiring saved us a lot of time, effort, and costs associated with training.”

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Upping the Ante

The expired COVID unemployment benefits may also mean more competition, as job seekers are likely applying for roles with multiple companies. As a result, employers are vying for talent from the same pool – and, if your competitor is offering the same position at a higher price point, that “A-list” job seeker is probably going to opt for their offer over yours.

Now is a good time to up the ante for your positions – whether that means increasing your wages, offering incentives (like a sign-on bonus), or introducing more generous benefits and perks.

Mark Suprenant, General Manager at Bennett Packaging, said his packaging company is increasing its hiring efforts now that benefits have expired. The company is offering more flexible hours in an effort to entice applicants, especially as it foresees business picking up steam.

“In order to reduce the burden that our employees will feel with increased demand, working hours will become more flexible once we increase our hiring,” Suprenant said.  

Hiring Tip: Before making an offer, get a snapshot of average wages for your industry and your location with iHire’s free Salary Research Tool.

Grow Your Brand

Growing your employer brand and promoting your company culture can lure applicants from a deep talent pool to apply for your jobs and accept your offers.

“The extension of federal unemployment benefits has significantly increased the labor force bottleneck. Finding applicants for open positions has challenged us to increase our brand awareness and provide a seamless hiring process for our candidates,” noted Lisandra Armenta, Corporate Recruiter with Elite Insurance Partners.

“To attract top talent within this tight labor market, it is crucial that we differentiate ourselves from our competition. Finding creative ways to highlight our company culture and provide our candidates with a seamless hiring process has significantly helped us during this time.”

However, growing your employer brand shouldn’t be a one-time effort reserved for when hiring is “down.” Continuously and proactively evolving your brand ensures you’re a step ahead in attracting candidates no matter what the employment market throws at you.

One simple piece advice for hiring managers: Highlight your company culture (including your mission, values, benefits, and perks) right in your job postings. Moreover, commit to providing a positive candidate experience, especially by maintaining contact with applicants throughout the hiring process.

Moving Forward

As we learned in the past year and a half, the labor market can change at the speed of light, and hiring is bound to experience ebbs and flows, especially given the myriad avariables in today’s employment climate.  

Todd Ramlin, Manager of Cable Compare, aptly summed it up: “While the extended unemployment benefits may have been a factor in [recent] hiring difficulties, I don’t think it is the only or even the most important thing driving people’s decisions not to work,” he said.

“I expect that our hiring experience will remain the same until the threat of COVID has passed and business gets back to either pre-pandemic ways or settles into a new normal,” Ramlin continued. “There’s just too much turbulence right now, and until it settles, people will be making decisions about their careers that might make it difficult for employers to find the people they need.”

Prepare your organization to recruiting effectively and efficiently – no matter whatever lies ahead – with unique, qualified talent on iHire’s 57 industry-specific communities. Or, check out our Resource Center of hiring advice for more tips and tricks.