Ellen King (l) and Julie Matthei. Credit: John Lee

Before the pandemic hit last March, Ellen King and Julie Matthei were in the midst of expanding their bread bakery, Hewn, in Evanston, Illinois, to a much larger storefront a few miles away.

They took out several loans and were ready to keep expanding their business that was bursting at the seams. Then COVID-19 arrived, and seemingly overnight the bakery’s wholesale customers dropped from 70 to four. They had to cut their staff of about 20 to eight key people.

“That was one of the absolute worst days was having to call these people and tell them we had to put them on leave,” Matthei said from Hewn’s open, rustic-style office behind the kitchen. “I said, at least you’re gonna get money if you apply for unemployment, you’ll be able to get through these tough times, because I couldn’t afford to pay everyone for not working, I just couldn’t do that.”

Now, over a year after those dark days, the new location is in full swing. They’ve slowly been able to build their staff back up to more people than before. But as the business keeps expanding, the women have hit a barrier: it’s been incredibly difficult to hire for new positions, such as cashiers, baristas and delivery drivers.

“Hiring during a pandemic is not easy,” Matthei said. “Hiring at the end of the pandemic is even worse.”

Hewn is one of perhaps millions of businesses struggling to get workers in the door. It’s a side effect of the increased unemployment benefits and fear stirred up during the pandemic as well as lifestyle changes, experts say.

As of July 1, 46% of small business owners reported they had job openings they could not fill, a percentage lower than May but still soaring above the 48-year historical average of 22%, according to a National Federation of Independent Business report.

“We’re still employing 7 or 8 million people fewer than we were in January, February 2020, which was peak before the virus struck,” said Bill Dunkelberg, the chief economist at NFIB. “Where are those people? Why aren’t they back at work? We’ve got 9 million job openings, and they may not all match up perfectly, but you’d expect more of them to have been filled with the 9 million people that we had employed that seemed to be out of the labor force now. So we need them back into the labor force. And we have to hope that that’s going to happen.”

Riding the Wave of The Virus

When you enter Hewn, its back wall is lined with reclaimed wood that Matthei says is from old buildings in Evanston. The store is lively and homey, the smell of fresh bread and coffee in the air. Yes, there’s still masks, yes, there’s distancing, but things have started to resemble pre-pandemic times. 

But beneath the surface, there still lingers the struggle of operating a business during a pandemic. In the office are dozens of boxes of N95 masks. Matthei is holding onto the plexiglass dividers that used to be in front of the register.

In the first days of the pandemic, Hewn took precautions early — Matthei and King’s baker friends on the West Coast, where the virus first arose in the U.S., warned them to keep an eye out. They taped off areas where customers couldn’t go and required employees to begin wearing gloves everytime they handled cash before the virus was officially declared a pandemic.

But no preparation could prepare them for how quickly things changed. In the matter of days, they had to launch an online ordering system if they wanted to have any customers at all, Matthei said. They asked customers to hold numbers through the window, they’d roll a cart out with the order, close the door, and then have customers grab it. Eventually, when limited customers were allowed in, Matthei installed a traffic light outside that she could control from the inside of the store, which told the people outside whether they could come in.

Hewn started as an operation out of King’s kitchen, the “underground bread club,” as they used to call it, Matthei says. King, a classically trained chef, picked up bread baking when her mom gifted her a baking book after her dad suddenly died. It turned into a passion project and she began to sell loaves to the parents at her son Asher’s Montessori School.

That’s how King and Matthei met. “I eventually heard about this crazy woman who was selling bread and delivering it on her bike,” Matthei laughs. “Literally, she would put the bread in the burley with Asher, and they would fight off the squirrels when she would deliver the bread to people’s houses.”

Matthei, who is from Long Island, a place known for its delis and bakeries, struggled to find good bread when she moved to the northern Chicago suburb of Evanston. She recognized the demand and was the one who encouraged King to open an official business outside her own kitchen. The two became business partners and opened their first storefront in 2013. They’ve since become life partners, too — they’re now married. 

Hewn has outgrown its shop twice since it’s opening– once spilling over into the storefront next to their previous location and most recently at the shop they moved into at the start of the pandemic. Making the transition to the bigger space was key to their pandemic success, Matthei said. “We realized, if we were going to even attempt to make this work, we had to get this place up and running,” she said. “We didn’t have a choice.”

The team moved their brick and mortar shop the few miles themselves in their wholesale delivery vans, save a few pieces of large equipment that a company moved for them. They were completely closed for only one day, Matthei said.

The Hiring Struggle

On Hewn’s window on Central Street, beside paper signs that read “masks are still required at our business” and “No Cash During Covid,” is a sign that states WE ARE HIRING.

With unemployment benefits remaining higher than before the pandemic in several states, many are opting to keep getting the checks from the government rather than find a job. There’s also the added fear factor of contracting a virus at work — unlike corporate jobs, food and bar establishments couldn’t operate remotely. Many that remained working had to come in contact, in some capacity, with people everyday.

The pandemic also put school at home, which left many parents with the option to keep a job and hire childcare or quit and be home with their kids themselves, which contributed to the large portion of women and some men exiting the workforce last winter.

What’s more, restaurants and other customer service positions lost much of their plus sides during the pandemic. Many baristas and servers will say the best part of the job is the customers that are genuinely happy to be there and strike up conversations. But Covid stripped the job from this — making a regular a cup of coffee with some small talk turned into yelling through masks and plexiglass in order to hear the customer’s order. 

It’s all these reasons that Matthei and King speculate are causing the openings at Hewn to remain unfilled. Matthei also notes how the pandemic spurred constant stories and videos on social media of servers and customer service employees having to handle angry customers.  Not wanting to deal with this could be deterring people from applying to customer service service jobs, she said.

Hewn’s team totals 31 now, which is larger than ever. But the bakery has grown and it needs some more help. The summer months have flooded Matthei’s inbox with applications from high school students, but the bakery seeks to hire full-time, long term employees with some experience. 

This is a similar dilemma 89% of small businesses across the country that are hiring or trying to hire report — few or no qualified applicants are applying, according to the NFIB report.

The openings have put small kinks in operations, such as the front of house being short-staffed at closing, causing King or Matthei to step in and help out. Taking customer orders is something Matthei enjoys doing, but she’s had to plan to be there at closing time because she knows her staff will likely need an extra hand.

As the business expands — it’s increased its wholesale business from pre-pandemic levels — the number of workers needed to get everything done is growing. Soon, Matthei plans to list an opening for another baker after a client mentioned they’d like to up their purchases.

A record high of employers have raised compensation to entice workers to join their teams — It’s at a net 39%, according to the NFIB report. A net 26% plan to do so in the next three months. 

But for small businesses, this can be a big requirement. At Hewn, Matthei and King start their employees above Evanston’s $11 minimum wage and offer healthcare among other benefits, a perk of the job they don’t want to get rid of. Matthei mentions she’s heard of companies offering a signing incentive, but that’s a road Hewn does not want to go down.

Many of the factors causing the worker shortage will begin to dissipate come fall — increased unemployment benefits will expire in September and as schools reopen in person, parents will no longer need a caregiver during the day, Dunkelberg said. Plus, as the country reopens and more people go to places like restaurants and gyms it will improve the economy. 

“Most recently, the biggest job gains received have been in leisure and hospitality, which is the restaurants and all that kind of stuff that has been really shut down by the COVID policies that we’ve had to pursue,” he said. “So as we see that grow, that will be a mainstay of employment going forward.”

Bright Spots in Dark Days

In most communities, the pandemic brought many people together to help their communities. This was especially the case for Hewn, who felt the love in their Evanston community.

Hewn participated in a program from nonprofit Artisan Grain Collaborative, which helped stimulate sales for bakeries while feeding those in need. Customers bought loaves of bread, which were then made and donated to local charities and soup kitchens. Hewn partnered with Hillside Food Pantry in Evanston, where it has donated leftover loaves for years, Matthei said. 

It is a brilliant program, Matthei said. “We get a benefit from it, the miller gets a benefit from it, the farmer gets a benefit from it, and of course, the people who are in need get a great benefit from it.”

During the pandemic, there would be hundreds of loaves bought for the program each week. Sometimes people would come in and buy $100 worth, she said. Still, customers purchase about 20 loaves a week for the pantry, Matthei said.

The generosity of customers and the support of the bakery throughout the entire pandemic kept the team at Hewn going, Matthei said. Even moving to a new part of town, customers continued to purchase pastries and coffee and send their encouragement to the bakery.

“They came out in droves,” Matthei said. “They did the online orders, they would write little notes on their things that they would show in the window like, ‘keep going, you can do it.’ And I don’t think people realize how important that was because this was not easy, and we were exhausted.”

This story has been updated to reflect that the nonprofit’s name is Artisan Grain Collaborative.

This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.