Staff burnout, worse customer service, lost revenue: Poll shows impact of hiring challenges

Lowe's in Morristown. had a successful hiring day. (Tom Bergeron/ROI-NJ)

Nearly 1 in 3 admitted customer service suffered, and 3 in 5 said their staff was more stressed, leading to greater turnover. Almost half said it resulted in lost revenue.

The hiring challenges that seemingly every company in New Jersey is facing still persist today. The impact of that challenges was spelled out in the New Jersey Business & Industry Assocation’s 64th annual Business Outlook survey, which was released Monday morning.

The survey, which was sent to New Jersey business owners and executive staff in September and October 2022, had 468 valid responses. Most respondents were small businesses, with 61% employing 24 or fewer, the NJBIA said.

The survey found that 70% of companies had hiring challenges — a drop of just 3% from 2021. It also found that 3 in 5 had increased wages.

Of those who said they had challenges, here’s how they responded to two specific questions regarding the impact of hiring challenges.

Respondents were given the ability to select up to three answers (that’s why the percentages add up to more than 100%):

Which factors most affected your ability to find appropriate staffing

  • 79%: Not enough candidates/applicants to fill positions
  • 59%: Candidates lack required skills
  • 35%: Unable to provide requested compensation/benefits
  • 28%: Faster employee turnover than typical
  • 14%: Unable to provide requested hybrid work arrangement
  • 14%: Candidate concerns about COVID-19
  • 8%: Candidates lack sufficient access to child care services
  • 5%: Greater than normal employee retirements
  • 3%: Candidates had other caretaker responsibilities

How were you impacted by staffing challenges?

  • 61%: Increased wages
  • 59%: Available staff was more stressed/burned out
  • 45%: Lost revenue
  • 38%: Hired staff with lower qualifications
  • 31%: Service to customers suffered
  • 17%: Reduced hours/days open
  • 15%: Provided signing and retention bonuses
  • 11%: Reduced physical workplace capacity
  • 7%: Other

Even with those staffing challenges, New Jersey businesses did see a small rebound in hiring levels in 2022 — although the numbers were not necessarily strong, as 19% said they increased hiring while 21% said they decreased hiring.

While that leaves a net negative of 2%, it is a notable improvement from the net negative of 21% in 2021 and 23% in hiring in 2020, mostly due to the pandemic closures and its aftermath. Prior to 2020, however, there had not been negative net hiring in this survey since 2012.

Looking ahead to 2023, 30% predicted they will hire more, compared to 9% who will hire less — a 21% net positive hiring outlook.