With Covid-19 cases on the rise and more workers embarking on the "Great Vacation," many employers are bracing for "a season of staffing headaches," Lauren Weber and Chip Cutter write for the Wall Street Journal.

Employee expectations are rapidly evolving. Here’s how your organization can respond.

Companies struggle with staffing this summer

A continuing labor shortage has left many employers short-staffed throughout the pandemic—but many companies are faring even worse than usual this summer due to a rise in Covid-19 cases, as well as employees taking vacations they previously put off during the last two years.

Currently, the highly contagious BA.5 omicron subvariant is driving a significant increase in coronavirus infections. According to CDC data, the reported seven-day average for Covid-19 cases is now over 125,000, but the actual number of cases is likely much higher since at-home tests are not typically reported.

As these cases grow, more workers are calling out sick, either because they have been infected themselves or someone in their family was infected. For example, data from the U.S. Census Bureau found that between June 29 and July 11, 3.9 million Americans said they missed work because they had Covid-19 or had to care for someone who had Covid-19. In comparison, only 1.8 million people missed work for similar reasons during the same period last year.

Similarly, claims for paid leave related to Covid-19 have reached new highs. According to Byron Bass, who leads the workforce absence practice at Sedgwick, the insurer received more than 2,000 claims for paid leaves related to Covid-19 for the week ending July 3. "That's the highest it's ever been," Bass said, noting that these claims are 25% higher than the previous record, which occurred last year during the delta and omicron surges.

Many employees are also taking vacations they were not able to take during the previous years of the pandemic. According to data from the Labor Department, 4.8 million workers took vacation or personal days during the week of the Census Bureau's household survey in June—up from the 3.7 million workers during the same time last year.

"Now we are freed from our Zoom prisons, there is two years of pent-up demand to travel," said Henry Harteveldt, president of Atmosphere Research Group. According to Harteveldt, many workers are feeling a sense of urgency. "People are intent on taking advantage of the moment," he added.

Overall, "[t]his summer is proving to be a season of staffing headaches," Weber and Cutter write.

The size of the labor force remains smaller than it was pre-pandemic

According to Nela Richardson, chief economist at ADP, the surge of absences this summer is likely to be less disruptive to businesses than earlier Covid-19 waves—partly because employers have learned how to operate with fewer workers overall.

"That's some of the learning that's gone on," Richardson said, "almost the expectation that workers will be out because of Covid, and how do you adjust for that?" She also noted that some companies have automated more of their processes.

However, some processes cannot be automated, and with fewer workers, managers, particularly in the leisure and hospitality industry, have had to either take on more hourly work or bring in more contract workers to make up for staffing shortages.

In addition, the U.S. labor force remains smaller than it was before the pandemic. In June, the number of people in the labor force decreased by 353,000, and the labor force participation rate is still below pre-pandemic levels.

"The amount of water that's in the bucket is lower, and you've got a number of things that are punching holes in the bucket," said Peter Quigley, CEO of Kelly Services, a staffing and workforce services company. (Weber/Cutter, Wall Street Journal, 7/25)