Small Business Adviser: The COVID-19 Impact Is Still Asserting Itself

February 2021


By Keely Schneider


Employers should take note of fraudulent jobless claims, work-force training needs.

 

Since last fall, the number of people filing initial claims for unemployment benefits in Kansas and other states has skyrocketed, even as the regional jobless statistics have been reflecting a decline.

As we’ve seen from recent news reports, much of that activity is fraudulent, and state officials are working diligently to identify and remove such claims on the system. Many of these attempts at identity theft are, in fact, caught before checks are issued.

The issue is one that employers everywhere should be moni-toring. In most cases, company executives will receive a notice from state unemployment officials that specify by name the individual who has applied for benefits—in some cases, while that same individual is at work in that very office.

Even within our offices as a non-profit with a mission to promote work-force development, members of the staff have learned that someone is attempting to collect benefits under their names.

If you are an employer, it’s vitally important that you carefully examine all such notices; don’t throw them away or assume it’s some sort of prank. Confirm that the person listed on that notice has left your company, if that’s the case. If the worker is still employed, indi-cate on that notification form that this may be a potential case of fraud and return it to the unemployment office.

A larger concern for employers is that in the state Legislature, there have been discussions about ways to get further ahead of the issue, and some of the burden for that could roll back onto business owners by holding them liable, in some cases, for part or all of a fraudulent claim. Especially in larger companies, where the leadership may not know every employee by name, your processes for communicating with department heads and front-line managers should be fine-tuned to make sure a false claim doesn’t escape your company’s attention.

The potential for additional false claims could increase in the coming months because of the current state of hiring and retention. Rather than looking at unemployment claims, a better indication of the true state of the work force is in the number of people actually receiving payments, which means they have been through the initial vetting process. And what’s happening since late fall is that those numbers, as well, have significantly increased.

Currently, this region is starting to approach unemployment levels close to what we saw during that early phase of the pandemic; but those rates do not include anyone who has had to grab a part-time job to make ends meet or anyone who has completely given up looking for a job out of frustration. And reductions in unemployment have done nothing to help with the longer-term problem of a mismatch between available labor and the specific skill sets that employers need.

The sectors hit hardest during this pandemic—service jobs, hospitality, entertainment, storefront retail—all have employment significantly below year-ago levels, when the region was experiencing near-record low levels of joblessness. The forecasting I’ve seen through the economists at MARC and other national organizations does not show improvement, even as we move into recovery with introduction of the COVID-19 vaccine. Most forecasts show that those sectors may not recover for three or four more years.

That will roll back into the policy level; because benefits won’t last that long, there will be calls for further assistance to those displaced by the virus. Many who are affected by COVID-related job loss do not have a lot of educational credentials or skills in demand, and are exploring training in IT and tech. That’s where we are seeing above-average growth moving out of COVID. 

Because so many people are working from home, there is a greater need for new hires in cybersecurity, as well as the emerging fields of robotics, artificial intelligence and almost anything automated. The manufacturing sector, in particular, is experiencing significant change as it attempts to accelerate that automation, which means it won’t need as many people. 

Given all that, what I see as a more realistic approach for employers is that they’ll be training new hires for entry-level jobs in these sectors that are going like gangbusters, and over time, those employees may move up and fill more senior roles as their skill sets mature. 

But all of that takes time; these are not direct-placement hires, and you can’t take someone from a six-week training program and have it pop out someone ready for any vacancy. Employers would be well-advised, given that, to ensure that more work-based learning is taking place.

We’re entering a new era in terms of training, with three stakeholders—the worker, the employer and the state—who must determine allocation of responsibility for training needs. It takes a lot of employer involvement, it takes the willingness of the employee to learn, and it may take the state to step in with financial support to make that happen. But employers will be far better off to invest in new technologies and find the quickest ways to get people up-skilled, rather than poaching talent from a competitor.