Customers are returning to Colorado restaurants, bars, retail shops and other businesses, but they may not have anyone to take their order and serve them, help them find merchandise or take their payment.

That's because many businesses in the state's service sector are struggling to hire enough workers to handle the increased number of customers and sales now that many COVID-19 pandemic restrictions have been lifted. Business owners report they can't get anyone to respond to their job postings and help-wanted ads, let alone show up for an interview, accept a job and start working.

The Colorado Department of Labor and Employment adopted an emergency rule last week designed to push more people receiving unemployment benefits to return to the job market. The rule will cut off jobless benefits if applicants fail to show up for a scheduled interview or first day of work, which has become a growing problem.

“The rule allows the Division to consider the failure to appear at a scheduled interview, failure to appear for a scheduled exam, failure to report for the first scheduled day of new work, or failure to complete required pre-employment activities to disqualify them from continued unemployment benefits unless the claimant can establish reasonable justification for the specific failure," a department spokesperson said in an email message.

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“Of course, refusing to return to work because the claimant earns more on UI (unemployment insurance benefits) is NOT acceptable and could constitute fraud."

Restaurants, hotels, bars and retailers were hit hard by the pandemic and restrictions on capacity — the sectors including those industries lost two-thirds of the nearly 360,000 jobs shed in the first months of the pandemic. While the number of job postings — many in the restaurant, hotel and retail industries — are the highest since the pandemic began, laid-off workers aren't returning to the old jobs in big numbers.

The Colorado Restaurant Association estimates that 70,000 to 100,000 restaurant jobs lost in 2020 have not been refilled. Rebecca Taraborelli, co-owner of Rasta Pasta in downtown Colorado Springs and a board member of the association's Pikes Peak chapter, said the difficulty in hiring workers is the top issue now facing restaurants.

As a result, the association is co-sponsoring a job fair from 8 a.m. to noon Thursday for more than 30 restaurants at The Pinery at the Hill, 775 W. Bijou St. To help downtown businesses recruit employees, the Downtown Partnership has launched a website, to help them recruit, which had listings Thursday for 40 restaurants and retailers.

James Africano, co-owner of The Warehouse Restaurant in downtown Colorado Springs, knows the issue all too well. The Warehouse hasn't been able to resume serving lunch or expand to six-day-a-week operation because he can't hire enough servers, cooks and other workers to staff those extra shifts. That sometimes means it take longer to serve diners their orders, especially on a busy weekend night when an employee calls in sick or just can't work that night.

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"I have four or five openings, and just filling those would make it easier to handle a busy Saturday night," Africano said. "I had a staff of 35 before the pandemic and we were open for both lunch and dinner six days a week. We have 13 employees now and would need at least 15 more to be able to go back to that kind of schedule. I don't know where or how I would find that many people."

Tim Haas Jr. has his 78-year-old father working in the warehouse of his company, TAT Enterprises, which operates the Garden of the Gods Trading Post and seven other retail shops in Manitou Springs and Old Colorado City, because he had to pull workers out of the warehouse to work behind the counter at some of the shops. As a result, the warehouse is overflowing with merchandise that he can't get unpacked and sent to the stores.

"I've hired a dozen (employees) in the past couple weeks and I would hire 12 more if I could. We normally hire a lot of high school and college students when the school year is over, but that is not for several more weeks. We have been short people all year long," Haas said. "We can't get a response from our (help-wanted) ads. We've raised our entry-level wage to $15 an hour (from $13 an hour), but hiring is still a challenge."

Christopher Howes, president of the Colorado Retail Council, said member retailers aren't getting many applicants for openings, making it difficult for them to keep up with strong sales growth.

Colorado unemployment rate unchanged in February

“Some members are definitely experiencing very low job applicant rates here in Colorado,” Howes said in an email. “It has made it difficult to keep up with staffing needs in a growing consumer market such as Colorado as people continue to move to the Mountain West.”

Bracing for tourists

The entry-level labor shortage is hitting just before the beginning of the Pikes Peak region's peak tourism season, and has operators of some of the region's major tourist attractions concerned. P.K. McPherson, executive director of the Pikes Peak Country Attractions Association, said nearly all of the trade group's members are having trouble hiring seasonal staff for the peak season, which traditionally starts on Memorial Day.

"Our members are trying to hire several hundred people, and it already feels like the season has started. Tourists are here and spending money," McPherson said. "It was a problem last year and it is an even bigger problem this year because more people are coming. They are running their existing staff ragged trying to serve bigger crowds and it is only going to get worse later in the summer."

The labor shortage is worsening even though Colorado's unemployment rate is more than double its level before the pandemic — more than 200,000 people are out of work and the unemployment rate is 6.4%. So why aren't those who don't have a job applying for the more than 150,000 jobs that are listed as open? Officials with the Pikes Peak Workforce Center say there are several reasons:

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• Some potential applicants for restaurant and retail jobs, especially younger people who haven't yet gotten both doses of the COVID vaccine, are worried about their health and safety around people who may not be wearing masks and staying at least six feet apart in a workplace that might not be well ventilated. Vaccines were restricted to those over 49 years old until early April.

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• Applicants with small children may not be able to find child care since some child care centers have closed and most others have reduced capacities due to social distancing guidelines and reduced hours due to a lack of workers on their part. Some centers also have been temporarily closed during COVID outbreaks among staff and students.

• Those collecting unemployment benefits are receiving both traditional unemployment benefits, which have been extended several times, and an extra $300 a week included in the last stimulus package, both through Labor Day. Erica Romero, business relations team lead for the workforce center, estimated that can total about $15 an hour, or $2.68 an hour more than Colorado's minimum wage and more than some entry-level restaurant and retail jobs.

Joe Campana, who owns Bonny and Read and seven other restaurants in the downtown area and Old Colorado City, said some employees he had to lay off during the pandemic don't want to return until their unemployment benefits run out.

"I've told them I can't hold their job open for another week" so they can take benefits. "They called me back later to come back to their job and I had already filled it," Campana said. "Most of Colorado has reopened, so people should be working. No one should be out of work and still on unemployment (benefits). Some people have changed careers and left the industry, and I understand that."

• Restaurants and small retailers are competing for employees with Amazon, which is hiring at least 1,000 people for its massive fulfillment center that will open this year and last week advertised "seasonal" openings on its website (now filled) that start May 16 and pay up to $16.30 an hour. Other retailers, including Costco, Hobby Lobby, Target and Walmart, are paying wages that start at $15-17 an hour. Those employers also are offering bonuses and benefits many restaurants and small retailers can't afford.

• Laid-off restaurant, bar and other hospitality workers have found jobs in other industries and aren't interested in returning to their previous careers. Some are worried that they could face another layoff if the pandemic worsens again.

"Everywhere you go, you see now-hiring signs," said Romero of the Pikes Peak Workforce Center. "A lot of these entry-level jobs were summer jobs for high school and college students. Some of them aren't wanting to go back to work. They have been used to a virtual environment in school and are looking for remote work. We are getting a lot of requests for remote positions from those who are worried about their own or a family member's health."

To compete with Amazon and other large employers, restaurants and small retailers may have to be more flexible in setting schedules and other details of the job and offer incentives to attract employees, such as bonuses, paid time off, health benefits, 401(k) retirement fund matches and other inducements, Romero said. Entry-level jobs that lead to a promotion to a better-paying position also are easier to fill, she said.

"I pay $16-18 an hour, and that still doesn't appear to be attractive" to applicants, said Africano, The Warehouse Restaurant co-owner. "All of our expenses have gone up, but I can't raise our prices to pass those costs on. The consumer wants to pay $3 for a taco and $6 for a burger, but it probably needs to be $15 for a burger for us to be competitive on wages and benefits. That's difficult with a 4-6% profit margin."

Women leaving workforce

Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum, said a big part of the shortage is due to women who left the labor pool during the pandemic and haven't returned because of child care and other issues. Some may have found jobs they can do from home, while others may found a way to live without the additional income they earned while in the workforce, she said.

"These women may represent semi-permanent reductions in the labor force. They have made adjustments over the past 14 months to live within one income and the longer they stay out of the workforce, the more difficult it is to get them to return," Bailey said. "The cost of child care often exceeds the income from a second wage earner, and that was made worse during the pandemic because child care became more difficult to get."

Ryan Gedney, senior economist for the state labor agency, said the shortage may result from a timing issue — consumers are more willing to leave their homes than workers who would serve them.

“Consumer demand for goods and services have increased since February/March, and that can be tied back to multiple rounds of federal relief, improving weather and wider rates of vaccinations among the adult population," Gedney said. "However, while older adults have had vaccinations options for a while, vaccinations were not widely available to the 16+ Colorado population until the beginning of April. This could impact the labor supply of industries like restaurants, who rely on a relatively younger population of workers than most industries.”

Many sectors struggling

The labor shortage extends well beyond restaurants and bars. Ed Okvath, general manager of the Hotel Eleganté Conference and Event Center, the city's second-largest hotel, said the hotel has more than 70 job openings, mostly in housekeeping, food and beverage operations and at the front desk. The inability to fill the jobs means the hotel's 100-person staff must work extra shifts and longer hours.

"I need those 70 people because it looks like we will have a very good summer. Our occupancy will double in June with the beginning of the tourism season," Okvath said. "We've been trying to hire people since February. We get a lot of people who apply for a job, but don't want to interview, so they don't answer the phone when we call. We've already adjusted wages and pay referral bonuses to be more competitive."

Cripple Creek casinos also are struggling to fill openings. Both Bronco Billy's Casino and the Wildwood Casino are trying to fill more than two dozen openings amid the elimination of betting limits and additional table games that are expected to boost customer traffic in the state's casinos. The Wildwood Casino also is opening a new hotel June 1 that will need housekeeping and other staff. To try to attract more applications, Bronco Billy's is hosting a job fair from 2-7 p.m. Wednesday in its steakhouse.

The worker shortage in some industries, such as construction and auto repair, predates the pandemic and has only gotten worse in recent months. Phil Long Dealerships has 100 open positions at its 17 dealerships in Colorado and New Mexico, some of which pay a starting annual wage of $60,000, said Dave Campbell, vice president of human resources and risk management for the Colorado Springs-based company.

"We started to feel pressure on filling jobs in sales and service at the end of 2019. That issued slowed down during the pandemic, but it is worse now than it was in 2019," Campbell said. "What that means is that for a transmission repair that normally takes two days, you might have to wait two weeks for an appointment. That means we have to put the customer in a loaner for 2½ weeks. If we were properly staffed, we could get the customer in and out sooner."

Some companies have not had issues filling positions, but they’re higher-paying financial services jobs. Technology companies have tried to overcome the worker shortage by hiring remote workers.

“We’re confident we will continue to able to find talent here in Colorado for our 375 open positions we’re hiring over the next five months,” said Janelle O’Haugherty, Fidelity Investments spokeswoman, via email. “This effort is part of an established growth pattern we’ve been in over the last year at Fidelity Investments. In fact, we were able to successfully grow our customer-facing teams by 77% in 2020. We met our hiring goals for 2020, bringing on more than 5,000 new employees across the country and 525 in Colorado.”

Fidelity has operations in Greenwood Village, and more than 1,000 Colorado employees.

Contact Wayne Heilman 636-0234