Maryland businesses offering bonuses as worker shortage persists

The most recent crunch has prompted business owners to resort to signing and retention bonuses to attract workers — with varying degrees of effectiveness. (AP Photo/Keith Srakocic)

Maryland businesses are offering bonuses to prospective employees — an effort to lure them to jobs as a worker shortage continues nationwide.

The shortage comes as states continue to loosen coronavirus-related restrictions. Last week, the U.S. Bureau of Labor Statistics reported there were a record-high 9.3 million job openings on the last business day of April.

“There is a crisis happening for businesses. It is pervasive across every industry, and employers cannot find enough people to work,” said Cailey Locklair, the president of the Maryland Retailers Association.

Some business owners and professionals in Maryland attribute the shortage to several factors: Maryland continues to allow people to receive unemployment benefits without actively searching for work and the weekly $300 federal unemployment benefits remain in place. Maryland Gov. Larry Hogan has announced that those programs will end in early July.

Economists have also noted that other factors, such as a lack of child care and concerns about contracting COVID-19, have made people hesitant to enter the workforce.

The labor shortage has prompted business owners to resort to using signing and retention bonuses to attract workers to their companies — to varying degrees of effectiveness.

“It is businesses’ response to the lack of workforce returning,”  said James Rzepkowski, the assistant secretary of the Division of Workforce Development and Adult Learning at the Maryland Department of Labor. “They’re doing what they can to be competitive for a limited number of job seekers.”

The Live! Casino & Hotel in Hanover, Maryland, currently has around 125 job openings, mostly in entry-level positions, said Nancy Myshko, the company’s human resources vice president.

The company has held two job fairs to attract workers, and anyone who the company hired as a result of attending the fairs would be eligible for a $750 bonus, Myshko said. The bonuses are paid in halves — one after the first 90 days of employment and the other six months after employment.

The business has rarely offered bonuses in the past, only doing so for jobs related to table games, Myshko said.

“We’ve really needed to make sure that we’re drawing the best candidates, so we were willing to make that investment,” Myshko said. “It was helpful.”

Transit Group Inc. is a company in Gaithersburg that oversees two transportation businesses: Regency Taxi and Challenger Transportation.

David Mohebbi, the company president, said both businesses are currently short about 100 drivers — about 30 percent of the entire staff. The company is offering a $500 bonus upon hiring and an additional $1,000 after 90 days.

Newly hired drivers had said the bonuses incentivized them to come back to work earlier, Mohebbi said. But he added the bonuses alone may not be enough to hire the 200 total workers.

“It’s a goal that I don’t know if we can reach because of the labor conditions right now, but we’re doing our best,” Mohebbi said.

Marshall Klein, the chief operating officer at Maryland grocery store chain Klein’s ShopRite, also said incentives can only do so much to attract workers. Since last fall, the company has offered hiring and retention bonuses and “significantly” increased starting salaries.

But the company still has between 100 and 150 openings across its nine stores — something Klein attributed in part to the hesitancy to return to work and unemployment benefits.

“[The incentives] seemingly had very minimal impact on the ability to recruit and retain associates,” Klein said.

Mike O’Halloran, the Maryland state director of the National Federation of Independent Businesses, said these hiring tactics have been around for a “long time,” but “we’re hearing about it more and more right now because of this intensified labor shortage.

In terms of when the shortage may subside, Rzekpowski said “July is going to be the big month to watch” because of the expiring unemployment benefits.

Others say it is hard to predict when workers will return in full force.

“Anyone who says they know is guessing,” Klein said.