RALEIGH — Half of North Carolina employers reported having difficulty hiring, up from 2016 when 40 percent of employers had hiring difficulties, according to a report by the North Carolina Department of Commerce.

Almost 60 percent of North Carolina STEM-related and manufacturers reported hiring difficulty, the highest of any industry in the state.

Employers found that employability, a low number of applicants and soft skills were the top reasons for hiring difficulties. However, STEM-related businesses stated that hiring difficulties were mostly due to work experience and technical skills.

The survey interviewed over 2,000 business establishments about their hiring practices to understand hiring difficulties and workforce needs. The report provided a different survey for STEM-related businesses and manufacturing companies across the state.

It also noted that the hiring difficulty could mean that even if an employer had difficulty with filling just one of their vacancies, it would fulfill the definition. The survey aimed to capture any level of difficulty experienced by an employer, and intentionally set a low threshold to capture the maximum level of difficulty.

Tightening market, trends

The Employer Needs Survey shows the challenges of North Carolina’s increasingly tightened labor market, said Andrew Beal, information and communications specialist at the Department of Commerce.

North Carolina also has a low unemployment rate, which also contributes to the tightening labor market. Beal said that both of these factors could help provide context for why employers are having increasing hiring difficulties since the Employer Needs Survey in 2016.

Beal also said North Carolina’s low unemployment rate, at 3.6 percent in October, could be a factor explaining why employers are listing a low number of applicants as a reason for hiring difficulties.

The Employer Needs Survey is report conducted every two years by the Commerce Department since 2014, and it is used as a tool for business leaders, policymakers, educators and anyone who is interested in North Carolina’s labor market.

The 2016 and 2014 reports found that a lack of work experience, technical skills, soft skills and education were frequently listed as reasons for hiring difficulty. Beal said he’s noticed a trend from employers directly stating that soft skills and employability as the reasons for hiring difficulty.

Employability is defined as a lack of work ethic, reliability, professionalism and motivation. Soft skills are defined as skills in communication, teamwork, critical thinking and creativity.

STEM-employers hiring difficulty

STEM and manufacturing employers reported the most difficulty hiring — STEM employers reported an 81 percent increase in hiring difficulty since 2016 report.

Work experience and technical skills were the top reasons STEM employers chose for hiring difficulty, at 67 percent and 61.4 percent, respectively.

North Carolina State University Distinguished Professor and Extension Economist William Neal Reynolds said that nationwide there is robust job growth in STEM fields, and a supply and demand employment issue. Many of STEM-related jobs require higher rigorous education and highly technical skills, he said.

“(These are) majors that are challenging, it’s understandable there’s a gap because we have strong growth in those areas and those are not areas where you produce people on a short-term basis,” he said. “North Carolina is not unusual for this.”

Colleagues at the Department of Commerce’s Labor & Economic Analysis Division (LEAD) stated that the report is not a “skills-gap” assessment and that it only looks at issues through the employer’s perspective.

“Employers could say they are having difficulties finding people with a particular technical skill but the cost of acquiring certain skills is high,” LEAD stated. “Typically, economists point out, in an efficient market, if there is a “shortage,” prices will rise to the point where supply (worker) and demand (jobs) match.”

STEM employers in the future are going to have to figure out alternatives to fill their job openings, Reynolds said, because of the high level of training that this type of industry requires.

“Employers are going to figure out ways to change the requirements for individuals going into those fields,” he said. “They are probably going to disassemble many of the occupations into simpler components so they have a broader range, I think that that’s the probably approach.”

The report by region

Surprisingly, medium metropolitan areas in North Carolina have the most difficulty hiring, whereas larger metropolitan areas, such as the Triangle and Charlotte have the least difficulty hiring.

“(The report) shows you where the biggest challenges are,” Beal said. “We have an impression that rural economy has the hardest time hiring, that wasn’t the case. The large metro areas are having less difficulty, that’s not surprising. But the medium metro areas that are having significantly more difficulty is interesting.”

Medium metropolitan areas had 52 percent more difficulty hiring than larger metro areas, while rural areas actually reported similar difficulty as the overall sample. Entry-level positions were also the hardest to employ in every region.

Reynolds said he thought it was also interesting that areas like Charlotte and the Triangle were having an easier time hiring qualified workers than in smaller or medium metropolitan areas.

“I think a lot of people would think that would be the reverse — that the job market is very tight in big metros and less tight in the smaller metro areas,” Reynolds said.

Growth in North Carolina

The report shows that the labor market is tightening, Beal said, which is a good sign for the economy. It also shows that although STEM-related fields are having a harder time hiring, there are government initiatives in place to help address these issues.

Beal explained that the report provided some “food for thought” recommendations to help aid them in developing effective workforce programs. Currently, government initiatives are focusing on programs such as work-based learning and apprenticeships to help candidates to be more experienced and qualified.

Although half of all employers are having difficulty hiring, half of the employers have had no difficulty at all hiring even one position in North Carolina. The survey also showed that 88 percent of respondents said they were hiring, which is great news for North Carolina’s economy, Beal said.

“This is a great sign that almost all businesses are trying to grow,” Beal said.

This story is from the North Carolina Business News Wire, a service of the UNC-Chapel Hill School of Media and Journalism