Industry FocusEmployment

Nevada’s employment landscape has been a roller coaster over the past decade. Dipping during the recession, employment saw a resurgence a few years ago only to experience new lows during the pandemic. Today the industry is dealing with retraining a workforce for the future and fraudulent unemployment claims, among other issues. Recently, executives from the employment industry met in a virtual roundtable, sponsored by City National Bank, to discuss the future of employment in Nevada.

Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. These monthly roundtables bring together industry leaders to discuss relevant issues and solutions.

Is Finding Quality Candidates a Challenge?

Jason Bruckman: The biggest challenge is a lack of candidates. In almost 20 years in recruitment and staffing, I’d say this is the hardest market to recruit in. You would think with unemployment going up, you would not have difficulty finding candidates, but it is very difficult. Particularly on the manufacturing and distribution side. Folks are making more money being on unemployment, so they don’t want to take a position where they’re going to earn less and sacrifice that. The lack of schools being open has caused families to have only one parent who is able to work. Also, the fear of going to offices or going into a manufacturing distribution facility, has caused a really tough environment to recruit for workforce. It is a really challenging environment to recruit in.

Celeste Johnson: Despite the news narrative, we continue to have more jobs than we have people to fill them, in northern Nevada anyway. You would think high unemployment would indicate a flood of workers. It is not the case.

Debbie Banko: We are starting to see that it is harder and harder to find good people that want to go to work. Some of the biggest problems are the politics we are about to engage in, legislative sessions and the higher taxes that are going to be coming up on us, along with a lot of these subsidies. I do think it prevents people from taking jobs.

Is Nevada’s Economy Diversified Enough?

Damian Gacia: The lack of diversification is still a problem. I think COVID has actually highlighted that. When we look at our unemployment, we’re number two in the US, only trailing Hawaii. Looking at those two markets, what’s the number one driver? It’s tourism. Our lack of diversification [is an issue]. Local and state government has done a good job at trying to attract more non-gaming, non-hospitality industry over the years. We’ve made great strides. But, honestly, more needs to be done. When something like this happens and it hits one industry more, that’s when you see these types of unemployment numbers skyrocket. Hopefully we continue to diversify our industry so we can employ more workers.

Bruckman: In order to diversify, it has to be attractive for companies to come here. Often companies would relocate or open a facility out here because of not having to pay the California rates or not having to pay the Utah rates. As that becomes less and less attractive it is harder to convince organizations to come out here and be able to open in the Las Vegas market.

Banko: The City of Las Vegas has started a program whereby people who are in the Silicon Valley can live here for less money and work there. They’re trying to get taxes within the state. They are giving incentives to move them here but [continue] working in Silicon Valley. Some of those incentives include lower cost to flying back and forth and different types of perks, including $10,000 to help buy a home here. These are high earners. That might actually make us an attractor for more technical folks that we can utilize here as well.

How Will Employment Safety Rules Change After COVID?

Jennifer Parkhurst: With the new laws and regulations coming in, especially in the hospitality and casino industry that are still hiring, it is a requirement before they onboard that they take a COVID test and it be negative. There are [also] new questions you ask when you are taking a job order. What is your company’s COVID compliance? What are your office’s requirements [and how does it work with] hybrid or telework?

Carolyn Spoletini: I think that with new legislative sessions coming into play we can anticipate that OSHA (Occupational Safety and Health Administration) is going to take a stricter stance from a regulative perceptive. Vaccines in the workforce for certain industries [is one consideration]. There are some OSHA bulletins that are coming out [regarding vaccines], but the EEOC (Equal Employment Opportunity Commission) and the DOL (U.S. Department of Labor) haven’t made final rulings on it. Protections are still there for employees [who opt out of the vaccine] but, from an OSHA standpoint, it’s going to be more about frontline workers. We might see it in the restaurant industry, but I don’t think we’re going to see it in offices.

Johnson: It is going to be very interesting to see how that plays out because EEOC has said that employers, essentially, can mandate the vaccine. Obviously, there are caveats to that. You have to have an interactive conversation because there are protected things like the ADA (Americans with Disabilities Act) and religious protection. It does get complicated, but I am a little surprised that’s the position. I don’t know what employers will do; it seems like it would be a bit of a touchy subject to put out into an organization. In my own internal organization, I don’t know if I am comfortable saying, “Hey everybody, you have to go get the vaccine.”

Garcia: We are seeing candidates, both in contract and direct hire work, that will take less money or commute further if they are not comfortable with COVID protocols in place. It’s increased as our cases increase, unfortunately. Over the last [few months] it’s intensified quite a bit. We are seeing an impact as to what safety protocols companies are doing right now from a workforce perspective. I am very interested to see what will happen with the pending OSHA changes. If [a vaccine] is mandated, are you ok to deny somebody employment if they’re not vaccinated]? There are so many variables. We are seeing an impact in the workforce from a comfort level perspective for sure.

What Legislative Changes Related to Employment can we Expect from the Next Session?

Parkhurst: One of the items is PTO (paid time off), if somebody tested positive are they going to be paid for two weeks to stay home?

Shannon Chambers: The Federal Emergency Paid Sick Leave was effective to December 31, 2020 and is now voluntarily. Two weeks is not guaranteed, it’s up to the employer. There probably will have to be something coming out from the state or from the feds again. How are you going to deal with people who have to be out on quarantine? There are a lot of gray areas here. The paid leave issue is not going to go away. In 2019, [Senate Bill 312] started out as paid sick leave and it ended up as paid leave, which made it more difficult for employers. An employee can take time off for whatever, and doesn’t have to give a reason. That’s not what you want to do when you write a law. I appreciate that they wanted to give flexibility, but it would have been better off, now knowing what we know, as a paid sick leave bill. There could be a new bill [to amend it].

Elisa Cafferata: I expect you’ll see quite a few pieces of legislation trying to fix DETR (Department of Employment Training and Rehabilitation) and the unemployment problems we have. Unemployment is a federal partnership so there’s a limit to the amount we can do. [In regard to legislative changes, there are] a couple of things to be aware of. One is, I’ve heard that some legislators are interested in setting up a state program to provide unemployment benefits for self-employed people. It’s extremely challenging; that is where most of our fraud is. I am not advocating a state income tax, but the fact that we don’t have one makes it very hard for us to verify information. When people say I made $100,000 last year as a consultant, we don’t have anything we can check against unless they give us their Schedule C. It’s been a real problem. I think we’ll see legislation around that. The Legislature is going to be most concerned with cutting the state budget because of the impact this [pandemic] has had on Las Vegas. All of the state agencies have been asked for 14 to 20 percent cut proposals. Until we see the rebound of the economy, that’s going to be a huge impact to this state. It’s excruciatingly painful. A lot of the safety nets workers in Nevada rely on are really impacted. I think that’s where the energy will be [in the session].

How Big of an Issue has Unemployment Fraud Been?

Cafferata: We literally have had one and a half million applications for help. We have around 300,000 people who are getting weekly unemployment benefits, which we think is the right amount. That’s consistent with the unemployment rate we believe we’re seeing in the state. That means over a million potentially fraudulent claims have been submitted. It’s huge. This is what happens when, you create a program in a matter of days, then try and implement it. It was an invitation for fraud and we’re not the only state that’s seeing it. Every state is seeing this, although I think we might be seeing more. It’s been a perfect storm. We know with all of the data security breaches that have happened over the years, all of us have had our personal information compromised. This was just the opportunity that these folks were looking for. They could buy personal information on the dark web and apply for benefits in every state, which is really what these criminal rings are doing. All the states are working together to pursue fraud, we’re bringing in a new fraud vendor who’s able to match applications against a whole series of national databases. We expect to see more prosecution and be able to turn more of these over to law enforcement. Our first priority was to try and pay people who are eligible and needed the payment.

Banko: I started getting unemployment claims for myself and several of my people who had been here for over 10 years. We couldn’t get a hold of anybody, so we started writing in big red letters across them and sending them in. Hopefully that was helping. Now we’ve started calling every single person when we get an unemployment claim to ask if they’ve filed for unemployment. It’s been kind of nice because we’re now touching these folks. We’ve also found a few people who had not filed for unemployment. We write across them that they’re fraudulent.

Spoletini: Bill Rosado who has been owner at ManagedPay since the company’s inception in the 90’s, had one in his name as well. We have been providing a lot of information, held trainings and webinars for our employers to help them navigate what’s going on, how to combat and shut those claims down.

Cafferata: I know you’re probably all hearing from folks who are frustrated about DETR, their employment or a fraudulent claim filed in their name and they can’t get a hold of anyone. Our biggest challenge remains the volume of applications we are seeing. We can’t just ignore those applications. We have to do something with them, so it makes getting to the people who truly need our help very challenging.

Johnson: When the $600 additional a week [unemployment benefits] shut-off at the end of July and a flood of candidates didn’t come to the market, we wracked our brains. We looked into the economic psychological condition of hysteresis. This is the perfect storm for hysteresis where there is something that happened to the economy that was so big it completely changed the trajectory of unemployment. Under that psychological condition when it is socially acceptable to be out of work you continue to stay out of work. The longer you stay out of work the harder it is to come back to work. It will be very interesting to see again what happens as these safety nets start to turn off.

Banko: We recently had a case of someone who was at home for a couple weeks and we got them back to work. In order to come back to work he wanted an astronomical increase that we were not capable of doing. He was perfectly comfortable staying at home and getting this new stimulus.

What is the Outlook for Employment in Nevada?

Cafferata: We’ve been working very hard to bring in staff in all kinds of ways. The new [relief bill] has been good in that most things are just continuing the same way. They didn’t put in a whole bunch of new programs. The $300 bump is less of an incentive for people to stay on unemployment. Unemployment is designed as a bridge to your next job, so it’s limited in the number of weeks and the amount of money you get. People are getting close to having been on unemployment for a year and they are going to start losing eligibility. You’re going to have more candidates in the market who will be needing jobs. If you’ve been unemployed for a year, it’s going to be hard to get back into the mindset. That is a huge challenge, the mindset we’ve created with this extended unemployment which was never designed to be income for a year. It was supposed to be a couple months to get to your new job.

Bruckman: As some of those folks come back into the workforce and as companies start to hire, what is going to be an issue is the wage inflation we’ve seen. A lot of companies have been forced to raise pay to be able to hire the workforce that they need. As they started to come back, wages are much higher. Some of these organizations are not going to be able to hire at the wage they were hiring at before. We’re going to see pressure on a lot on these organizations.

Banko: I don’t think we are going to have a real, significant recovery until the end of the first quarter in 2022. We are going to see some gradual increases throughout the year. But, in particular with casinos, even with all the inoculation coming, I think people are going to be afraid to come, afraid to fly. I really don’t see our economy coming back to anywhere close to where it was until the end of the first quarter in 2022. It’s what others big firms are seeing. Las Vegas is going to be the last to recover in their minds.

Spoletini: We are going to see a new normal. I hate to use that overused term at this point but really, employers overall have to face that the workforce and work as we know it may not recover until 2022. That really is the prediction. It’s going to be dependent on the vaccine. We have to have additional scientific data and guidance from the CDC (Centers for Disease Control) in order to continue moving forward and guiding our employers.

Garcia: From an employee perspective, we’re hearing a lot about pivoting, adjusting and transitioning. That’s going to be huge in 2021. I will back you up on the new normal because nothing will be the same when it comes to employment. It just will not go back the way it was before. An employee that is looking to go back to work in 2021 also needs to have a different, more open mindset than before. They may need to look at bringing on additional skills and pivoting into a role. It’s time for you to get back to work and keep your skills sharp until that industry does come back or find a different vocation all together. Great people also come with a great attitude. I think that’s important to highlight with the change in workforce in 2021. If you have a good attitude and a viable skill set, there’s going to be pockets of opportunities for you. It may not be what you are looking for or what you are used to, but there’s going to be pockets and you have to be able to pivot as well.