Employer, hiring

Employers are not recruiting staff at the pace they need to reach pre-COVID staff numbers.

Now that pandemic-related federal unemployment benefits expired on Sept. 4, Puerto Rico is expected to gradually improve its current labor market participation rate, although employers are still marred with challenges.

According to the most recent employment/unemployment report by the Department of Labor and Human Resources (DTRH by its Spanish initials), corresponding to July 2021, seasonally adjusted figures on the employment and unemployment situation for that month show a decrease in the level of employment and an increase in the number of unemployed workers, as well as the unemployment rate when compared to June 2021.

Specifically, the seasonally adjusted employment estimate in July 2021 was 979,000 individuals. When comparing this figure with the data for June 2021 (980,000), a decrease of 1,000 people was observed. Compared to July 2020 (973,000), there is an increase of 6,000 people employed.

Meanwhile, Puerto Rico Labor Secretary Carlos Rivera Santiago noted that the DTRH has seen upticks in how many people attend its various job fairs. But while he is confident that the people who received federal benefits such as the Pandemic Unemployment Assistance (PUA) will immerse themselves in the workplace, the official observed that this process will occur in a staggered manner.

PUA

PUA benefits ended on Sept. 4.

“I know that in the last recruitment fairs that we began to do on June 3, we have seen little by little how the number of people entering the labor market has increased [since the pandemic began]. Perhaps it has not happened at the speed that one would like or that the market needs, but yes, it has been happening and we should see at least an increase in that labor participation,” he told THE WEEKLY JOURNAL.

However, “it does not reach the levels of need that the employers may have and that at this moment it is urgent for them to start working in these areas so that their businesses are not so affected," he added.

Asked if Puerto Rico needs another round of benefits, Rivera said that it was “quite the opposite,” and that instead of unemployment assistance there should be a focus on incentivizing a return to work.

“We are trying to find other alternatives precisely so that people can see the labor market as a real alternative and at the moment the social benefits that are received are also being analyzed, in what way people can start working and do not lose some of the benefits, aids such as Nutritional Assistance or those who have a health card - those types of services that they receive, but when they generate a certain income they lose it,” he stated, adding that the island’s labor participation rate has historically ranged between 40 and 41 percent.

Among the initiatives that he expects will prompt residents to seek jobs is the recently approved rise in Puerto Rico’s minimum wage. House Bill 338, approved by the Legislature in late August, will increase the current hourly minimum wage of $7.25 an hour to $8.50 starting Jan. 2022, as well as another staggered increase to 9.50 by July 2023, and a third raise to $10.50 by July 1, 2024. “To say that this is going to solve all the problems that Puerto Rico has, no, but we have to move towards that direction, little by little directing that route that we want,” the secretary said.

“There is also a work credit approval, in which people who start working or are working and file an income tax return and have a child or two children - depending on their family composition and salary - also receive tax credits when they file that 2021 payroll. All we are doing with this is precisely that, seeking to encourage and that whoever is working also receives the benefit,” Rivera added.

New Attitudes Toward Work

However, Edna Guzmán, president of the Society of Human Resources Management - Puerto Rico Chapter (SHRM-PR), affirmed that beyond financial remuneration, workers seek flexible spaces, a sense of fulfillment, and work-life balance.

“Now comes the pandemic and it brings us another model where it is proven that it is possible to work in a hybrid model and that there are other ways of doing it that force us to move toward technology, and there is little tolerance toward employers or organizations where that vision is not shared. It’s even incentivizing people to leave, and I’ve seen it among my clients,” Guzmán said.

On another hand, she observed that employees - especially those from younger generations - are straying away from the mindset of corporate affiliation if the organizational structure or mission of that employer or business does not align with their own.

Carlos Rivera Santiago

Labor Secretary Carlos Rivera Santiago says there should be a focus on incentivizing a return to work.

Speaking on Generation Z and younger millennials, she said that “it is a generation that has had quick access to information and for them, it is important to know the jobs that are in and connect with the mission of the organization - what we are here for. If it doesn’t resonate with them, it’s very easy for them to go to another job, which an older generation didn’t.”

Guzmán explained “that has some reasons for being - social and political structures have changed, social rather. They don’t necessarily work to get married and have a family and so on, but it’s more of a connection. They like to connect and that what they are doing has a reason or purpose. To the extent that this does not exist, mobility is more agile and quicker.”

Alas, the Human Resources expert clarified that this phenomenon is not unique to the youngest workers either. “There is an element of organizational health that we should not neglect and has been neglected, organizational health in every sense. And when we talk about organizational health, it is how we are taking care of this talent, how we are sharing the results of the organization and how we are promoting its development," she said.

THE WEEKLY JOURNAL asked how businesses can bolster their corporate mission to retain their staff.

“I believe that some kind of dynamism has to be created so that the task they perform is not mechanical in the sense that it is repetitive and can make that worker feel bored in some way or that they are not being productive,” Secretary Rivera said. “Here the key is going to be the employer, in how they achieve that motivation, creating either employee service programs, programs that maintain some type of unity in the work area, and another type of service that can be given to these workers so that stay motivated and that they feel that they are part of a work group that is like a family, so to speak.”

Self-Employment on the Rise

While multiple professionals are estimated to seek jobs for other businesses or organizations, others have already established their own, further affecting companies’ chances at regaining their staff numbers.

The president of the Economic Development Bank (EDB), Luis Alemañy González, along with the institution’s economist, Gladys Medina, revealed that 15.8 percent of Puerto Rico’s labor market consists of self-employed individuals. The U.S. Internal Revenue Service describes these workers as business owners or independent contractors who provide services to other businesses, members of a society that operates a trade or business, or individuals who make business on their own in some other way.

“Gov. Pedro Pierluisi, along with our economic team, is ready to deliver strategies to boost and protect employment in this new stage, which we can foresee will be beneficial for the island’s recovery before the pandemic,” Alemañy said. The official specified that the DTRH reported that 169,500 people were self-employed in July of this year, which represents a reduction of 11,000 self-employed workers, or 5.8 percent when compared to the same month last year.

However, he underscored that “in accumulated terms, there as in increase in self-employment. Fiscal Year 2021 ended with an average of 173,200 self-employed workers, 5.5 percent less than the 164,300 than during the same period in 2020.”

Alemañy said that this employment modality was heightened by the emergence of niche opportunities like the creation, sale, and manufacturing of personal protective gear - such as face masks and plastic face shields -, as well as the manufacture, installation, and maintenance of acrylic, glass, or plexiglass shields for commercial establishments and offices.

In addition, he said that employees from other industries like construction, gardening, and decoration decided to work on their own because the high demand for this type of specialized worker made it more lucrative for a self-employed person to set their own rates and hours versus earning a certain salary within a traditional public or private worker-employer structure.

Meanwhile, Guzmán pointed out that the reluctance of some businesses to embrace new organizational schemes was also a factor that drove professionals to seek flexible work opportunities, such as self-employment.

“What do they seek? They are looking for this place that provides them that freedom, that autonomy, that flexibility and they are moving to be their own business owners. If you take a good look at food trucks, many are run by young and well-prepared people,” she asserted.

Despite the end in federal aid, Guzmán said that I don’t think that, even though there are people who are going to look for work, I don’t think it will be matched to pre-pandemic levels. When I say match, I don’t think that if 100 left, 100 will go looking for work. They searched for a way of life that resonated more with well-being.”

- Brenda A. Vázquez contributed to this story.

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