For the last several years, nearly every workforce conversation has started in the same place:
We can't find people.
There is no question that employers across the South Puget Sound have experienced a challenging labor market. But as we move through 2026, I think we need to ask a different question:
Are we still dealing with a labor shortage, or are some businesses dealing with workforce practices that haven't caught up with a changing market?
The distinction matters.
The labor market isn't what it was three years ago
Washington's labor market has been gradually loosening.
In June 2026, statewide unemployment was 4.7%, compared with 4.3% a year earlier. The numbers across our region tell an even more interesting story.
Pierce County's unemployment rate reached 5.4% in June, up from 5.0% a year earlier.
King County was at 4.9%, compared with 4.5% the previous June.
Thurston County was lower at 4.1%, but that was still above its 3.6% rate from June 2025.
At the same time, job growth is uneven.
Pierce County had approximately 349,400 jobs in June, only 0.4% more than a year earlier. King County employment was essentially flat year over year, while Thurston County was down slightly.
That doesn't look like the extraordinarily tight labor market employers experienced immediately following the pandemic.
But it doesn't mean workforce challenges have disappeared.
It means they're changing.
Trend #1: Recruiting may not be the real problem
This is one of the biggest shifts I see.
When an organization struggles to hire, the immediate response is often:
We need more candidates.
Sometimes that's true.
But after spending more than 15 years in staffing and workforce, I've learned that recruiting problems are frequently symptoms of something happening elsewhere in the organization.
Compensation isn't aligned with the market.
The hiring process takes too long.
Managers aren't prepared to interview.
Candidates don't understand the opportunity.
Scheduling doesn't match what today's workforce needs.
New employees receive little onboarding.
Supervisors haven't been trained to lead.
Or employees are being recruited into an organization that hasn't addressed the reasons the last employees left.
More applicants won't solve those problems.
Trend #2: The workforce challenge is becoming increasingly industry-specific
One of the most interesting things about the South Puget Sound economy right now is how differently industries are moving.
In Pierce County, leisure and hospitality employment grew 6.4% from June 2025 to June 2026.
During that same period, transportation, warehousing and utilities employment declined 1.4%, retail declined 2.8%, and professional and business services declined slightly.
King County tells a different story. Information employment declined 2.8% year over year while leisure and hospitality increased 2.8%.
Thurston County, with its significant state-government presence, has yet another workforce dynamic.
That means we need to be careful about talking about "the labor market" as though every employer is experiencing the same thing.
They're not.
A restaurant, distribution center, nonprofit, professional services firm and manufacturer may operate within 30 miles of one another and face completely different workforce realities.
Workforce strategy needs to reflect that.
Trend #3: Retention deserves as much attention as recruiting
Employers have spent enormous energy over the last several years figuring out how to attract workers.
I'm not convinced we've invested the same energy in what happens after they arrive.
What does someone's first week look like?
Does the supervisor know how to lead?
Does the employee understand what success looks like?
Is communication consistent?
Are expectations clear?
Does someone notice when a strong employee begins disengaging?
Do we know why people leave?
These aren't complicated questions.
But they require organizations to look beyond recruiting.
Retention isn't an HR initiative. It's a business strategy.
Every employee who walks out the door takes knowledge, productivity and organizational investment with them. Then the organization spends additional time and money replacing and training that person.
The cycle becomes expensive quickly.
Trend #4: Frontline leadership may be one of our biggest workforce opportunities
Organizations frequently promote their strongest employee into supervision because they're good at the job.
Then we expect them to magically know how to manage people.
Those are two entirely different skills.
As organizations grow, the distance between senior leadership and frontline employees increases. Supervisors become the people translating culture, expectations, communication and accountability into the employee's daily experience.
A great supervisor can strengthen a workforce.
An unprepared supervisor can undermine one surprisingly quickly.
If we want stronger retention, engagement and performance, developing frontline leaders should be part of the workforce conversation.
Trend #5: Employers need to look inside before blaming the market
This may be the uncomfortable one.
When hiring becomes difficult, it's easy to blame the economy, younger workers, unemployment benefits, wages, competitors or "people not wanting to work."
But employers can't control most of those things.
They can control:
How quickly they respond to candidates.
How managers interview.
How employees are onboarded.
How supervisors communicate.
How performance expectations are established.
How employees are developed.
How problems are addressed.
And whether the organization actually understands why people stay or leave.
Before concluding that the labor market is the problem, businesses should examine the parts of the employee experience they can influence.
Where the South Sound conversation needs to go next
One reason I'm spending more time talking with employers, workforce organizations, economic-development leaders and community organizations throughout the South Puget Sound is that I want to understand where their perspectives overlap—and where they don't.
What does the data tell us?
What are employers experiencing?
What are employees experiencing?
What are workforce organizations hearing?
And perhaps most importantly:
Where are the gaps between all of them?
Those gaps are where some of our biggest opportunities may exist.
The South Puget Sound doesn't simply need more workers.
We need businesses capable of attracting, developing and keeping the workers we already have.
That's a much bigger conversation than recruiting.
And it's one worth having.
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