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Economics - 29.10.2021 klo 10.00

Labour market position of service sector workers has strengthened, but understaffing is common

According to PAM's economic survey, a majority of respondents feel there is understaffing at their work location.

Respondents to PAM’s economic survey report that their labour market position has strengthened as their employers’ finances improve, but at the same time the majority feel their workplace is understaffed given the workload. Workers in the hospitality sector are more confident about the future.

In the third economic survey in 2021 by Service Union United PAM, respondents in the hospitality sector had more confidence in their employers’ financial position than ever before in the survey’s history. 62.8 per cent of respondents in the sector thought their employer’s finances would improve in the year ahead. Respondents working in the hospitality sector also think their labour market position has strengthened, and 24.6 per cent of them think that if necessary they can find a new job within a month. The corresponding share in the first study of the year was just 6.4 per cent.

“Although the situation with the epidemic hasn’t improved as expected, hospitality sector workers are clearly more optimistic about the future. As things stand, the Covid passport gives companies and employees the predictability that they have definitely earned”, says PAM’s economist, Olli Toivanen.

In the property services sector, respondents’ opinions of their labour market position have strengthened similarly. 26.1 per cent of respondents in the sector think they could find a new job within a month, as against 16.0 per cent in the previous survey. Also, 56.8 per cent say they are not threatened by unemployment at all.

“The property services sector recovered rapidly from the Covid shock and has grown rapidly over the last year. Right now there is a huge shortage of skilled workers in the sector. In a recent study by the Confederation of Finnish Industries, a full nine out of ten companies in the sector see skilled labour shortages as a barrier to growth”, Toivanen points out.

Majority of respondents think their workplace is understaffed

Exceptionally, survey respondents were also asked about their views on staffing levels at their own operating location relative to the workload. The situation is worst in the hospitality sector, where 65.3 of respondents think their operating location is understaffed. Well over half of respondents in the property services sector and the commerce sector also think that staffing levels are too low for the workload.

According to Toivanen, understaffing is both a cause and an effect of recent recruitment problems for service sector companies.

”Excessive workloads further add to the under-resourcing problem, with more absences due to sickness and some workers starting to look for new jobs. And then reports of poor working conditions damage a company’s reputation, which makes it harder to recruit more staff”, he explains.

“For employers, the most important thing would be to get ahead of the curve and nip problems around working conditions in the bud before they get out of hand.”

Broad-based growth in the commerce and private security sectors

In the commerce sector, the share reporting higher sales has declined somewhat since the last survey, but 47.9 per cent of respondents still think their employer has increased sales over a year ago. Despite this, just 8.9 per cent of respondents in the sector say their own financial situation is better now than three months earlier.

Broad-based sales growth is also being seen in the private security sector, where 34.2 per cent of respondents say their employer has increased sales compared to a year ago. The corresponding share in the previous survey was 17.9 per cent. Just 10.5 per cent of respondents in the security sector say their employer’s sales have deteriorated.

Data based on survey conducted by PAM carried out between 1.−17.10.2021. 668 PAM members responded to the survey. PAM publishes its economic survey (in Finnish) quarterly.