Employers struggle to fill open positions, labor shortage not going away
MANSFIELD -- “We can’t find employees.” It’s a statement heard repeatedly across Richland County - in conference rooms of manufacturers; inside the industrial park; at monthly Regional Manufacturing Coalition meetings and in conversations between employers and often anyone who’s willing to listen.
There are variations, for sure.
“We can’t find good employees.”
“We can’t find skilled employees.”
“We can’t find employees because of the opioid epidemic.”
“We can’t find employees who will even show up on time.”
There is an apparent gap between the type of jobs available and the workers equipped to fill them, according to Richland Community Development Group’s workforce development director Clint Knight. He recently completed a regional survey to get a better understanding of the situation.
“The key information from our recent wage survey is that employers are having a hard time locating the skilled employees that they need,” Knight said. “This means that we need to make sure that we are training the employees that we have to have diverse abilities and be as highly skilled as possible.”
He says the community needs to be preparing high school students to fill local jobs and to give the existing local workforce pathways to become the skilled employees that local employers need.
At Richland County’s recent economic forecast breakfast, chief investment strategist for Key Private Bank Bruce McCain recognized the skills gap, but highlighted another problem: There’s not enough people.
Knight's survey noted this, too.
Area employers identified "lack of applicants" as one of the top reasons for hiring challenges. It was listed second, directly behind "lack of qualified and skilled applicants."
For the first time in 40 years, McCain explained, the United States is approaching a time where employers are short on labor. Finding enough skilled labor is the number one problem heard from businesses, the economic expert said.
"It's going to be a competitive marketplace, where it's difficult to get pricing power and it may be hard to find the people that we need to employ," McCain said about the country’s immediate future.
In the past two years, the issue has already been reported by CNBC, FOX, CNN, the Washington Post and countless other media outlets.
“The U.S. labor shortage is reaching a critical point,” CNBC reported in July 2018, and only a few months earlier, a CNN Business report explained how the problem exists in big and small businesses alike.
In April 2018, an article posted by FOX business suggests looking in the Midwest, if in need of a job. There are more jobs than people to fill them, FOX reports, citing the U.S. Department of Labor statistics.
“There’s not an idle workforce, or a learning curve in employees who need training in order to advance -- there is actually an absence of workers,” the article states, paraphrasing Dave Swenson, an associate scientist at Iowa State University.
McCain predicts the labor shortage may soon become more challenging. The labor force in the United States has been growing by 1.5 percent per year, but that meager growth will soon further decrease, he said at Richland County’s economic forecast breakfast.
Based on the growth of the prime working age group, those 20- to 60-years-old, the labor force should be growing at 0.2 percent, he said.
"That’s because we've been pulling people in off the sidelines who have been unemployed or otherwise unengaged. Once we run through that pool, however, of unemployed workers, we're going to drop back to that 0.2 percent," McCain said.
What about keeping workers with higher wages?
When competition this significant arises, wages should rise, McCain explained, but that hasn’t been the case throughout the United States.
"If you look at the wage rates, you'll see we've reached the point with unemployment where we've crossed over the full employment level," McCain said.
He estimated a 3.3-percent wage increase could be sustained by the United States economy, but it could be challenging for employers to implement.
"What we're seeing with most businesses is it's been pretty difficult to pass price increases along, so that's probably part of the reason," McCain said.
Knight says his recent survey shows Richland, Ashland and Crawford County businesses have already raised their wages to competitive levels when compared to Wooster and Delaware Counties.
Results showed that assemblers and fabricators in Richland, Ashland and Crawford counties make an average of $15.86 per hour, while the same positions (on average) are paid $15.82 per hour in Wayne County and $16.25 per hour in Delaware County. Production workers are paid an average of $14.24 per hour locally, $14.31 per hour in Wayne County, and $15.42 per hour in Delaware County, according to data Knight collected in collaboration with Kent State University's Stark program.
“Our local employers are keeping an eye on the wage trends, and are responsive to our regional labor market,” Knight said. “Our local employers are not out of range of those counties around us. We have competitive wages.”
Still, it is indeed one of the tightest labor markets in years in Ohio and Richland County, he explained.
“Specifically in Richland County manufacturing, we have seen wage increases over the last 18 months -- these increases are in response to that competition,” he said. “The increases are already happening here due to both a tight labor market and a positive economic situation.”
But there’s several factors that play into this.
“Since labor wages do not respond to supply and demand the same way as product, it poses considerable challenges,” Knight said. “When there is less oil, the prices goes up, and typically that is the same with the availability of skilled labor.
“However - when there is more available oil, the price goes down, and that can't necessarily happen with labor. Once a wage is raised that becomes the new wage. The only alternative for employers is a layoff, and no one wants to lay off employees.”
He encourages employees who are seeking a higher wage to attain a higher skill level, as there are available positions that require more further skills and local opportunities to train.
Perrysville employer: How improved listening ability has helped retain employees
Mansfield Plumbing Products had a revelation several years ago amid a major expansion project.
The Perrysville branch of the company was increasing its capacity by 50 percent, adding 200 jobs and purchasing new equipment, but still hadn’t refined its ability to retain employees.
There was a noticeable disconnect between employees and management, which vice president of human resources Natalie Thomas knew needed to be resolved for the future of the company -- especially in an already tight labor market.
The solution, she and other management discovered, was simple. They needed to start with listening. The company hired an employee liaison -- someone who’s primary role is to listen -- and other initiatives followed.
“I think, it's easy to be in a higher level position and assume you know what's going on on the floor every day. Most of our supervisors and managers used to work these jobs, but they're forever changing,” said Kari Reidenbach, employee liaison. “We have 550 experts out here on a day-to-day basis, and they're the ones (manufacturing items) 40-plus hours a week.
"So, getting their ideas back to the management team or their supervisors is important.”
While listening can get lost on other people’s “full plates” of responsibilities, Reidenbach explained, listening is the priority in her role.
“I'm somebody that has the time to listen,” she said. “This is my plate. I have that time to listen to them, to organize their ideas and get them to the decision makers.”
Communication is Key
What worked for Mansfield Plumbing Products was improving communication, something that Richland Community Development Group’s workforce development director Clint Knight believes can help other employers, too.
When asked about barriers between employees and employers, Knight immediately mentioned communication.
“Communication has to involve understanding, and I think that's part of the communication issue,” Knight said. “I think a lot of employees or potential employees don't understand exactly what the employer is asking of them.
"It could be just a lack of listening on the employee's side, but maybe it’s just a lack of understanding on the employers side, or it can be a lack of knowing how to communicate that effectively for that person.”
Nobody is completely at fault, he continued, but everyone could make a better effort to understand one another. He suggests employers take steps to engage with workers and encourages employees to communicate concerns rather than letting them fester.
“In this market that we're in right now, our attention is everything,” Knight said. “I believe the most important thing employers can do to invest in retaining their employees is to talk to their employees on all shifts.”
He recognized that every employer won’t be able to hire an employee liaison. But he believes every one should find a way to prioritize listening. He pondered the possibility of designating a supervisor, team leader or human resources representative to act in that role.
Even if it’s one person listening for one hour on the rarest of occasions, he believes employers will see some benefit.
“Maybe it means I’m going to get a clipboard, and I'm going to walk around to see how everybody's doing, or I'm going to get here an hour before third shift ends, come in at 4 in the morning on Wednesday and just walk the floor … to get some feedback,” Knight said.
In his current role as workforce development director and his previous role with Spherion Staffing Services, Knight has seen dozens of employers use the “suggestion box” in varying forms -- a box, bulletin board, an online messaging system.
The key to this system, Knight said, is the response, which he noticed recently when visiting a local manufacturer.
“They've got a lot of employee suggestions, and literally, somebody writes it down, puts it up there (on a bulletin board), and then they address it,” Knight said. “Maybe the suggestion isn’t the greatest suggestion in the world or may not be possible, but they go to that employee or actually post their response to it on the board.”
The management team made a point to answer the question, even if the answer was simply an explanation that the suggestion wasn’t possible.
However, if employees hadn’t submitted questions to begin with there wouldn’t have been any communication about their concerns -- which is why Knight says responsibility to communicate more effectively falls on employees, too.
Ghosting, he said, is an unfortunate trend.
“Somebody may come for an interview, you may want to offer them the job, but you can't get them back on the phone,” Knight said. “Or they come in, they work half a day or they go to lunch, and they never come back.”
Without any communication, employers are left wondering why.
“If you go in, and there's something there that you don't like or there's a struggle or you're not understanding what you do, you have to talk to the employer because nine times out of 10, the employer's going to do everything they can to fix it," Knight said. "They brought you on. They saw something. They wanted you there. If you can't talk to them and let them know what the issue is, they can't fix it.”
Different Communication Styles
Jay Miller, of DRM Productions, believes complaining about problems without looking at solutions is pointless.
“You have to do something. Don't just keep sitting there complaining,” Miller tells employers.
When working with clients through the Mansfield-based DRM Productions, Miller asks employers to reconsider how they communicate with their employees and emphasizes the importance of identifying communication styles.
“The problem is that companies bring in 10 new hires, they run them through training, and then, they say, okay, employee number one, you're on line one, employee number two, you're on line seven, employee number three, you're on line eight,” Miller said. “And these people show up, and they sit down on their line, and they (realize) their job is to do this all day.
“They pick this up. They push this button. Pick this up. And then get up and go home.”
They often don’t know the person next to them. They aren’t familiar with management. And as a result, they feel no loyalty to their employer.
Instead, Miller suggests making a point to welcome new employees. DRM Productions often sets up “digital retrievers” -- or TV-like screens -- with rotating information, sometimes including introductions to new employees.
This, he said, creates an opportunity for other employees to learn about their new coworker and creates a reason for them to introduce themselves.
“They're less likely to leave someplace they feel like a part of, and they'll actually probably work harder and stay for something that they feel a part of,” Miller said.
What’s not effective, Miller says, is to simply post a flyer on a bulletin board without any strategy, as it likely won’t resonate with all the employees. Some people, he explained, better understand pictures, others better respond to data, and for some words work.
He suggests identifying which ones work best and using them.
Instead of flyers, Miller recommends television screens with rotating slides. It can be an effective means, he said, to reach employees as they will be more likely to look at the screen than a flyer.
“And we break it up with news or weather or trivia that changes on its own. So even if your message stays the same, there's stuff that's constantly changing,” Miller said. “It keeps it fresh.”
The Generational Divide
When talking to a group of manufacturers last year, Miller said, “You have the let's-not-talk-about-it generation trying to manage and communicate with the let's-hug-it-out generation. So it ends up abrasive.”
This got a laugh, but it’s not far from the truth, he said.
A January 2017 article by Forbes explained that the Baby Boomer generation is typically seen as “reserved,” while younger generations often prefer “more collaborative and in-person means of interacting.”
Thomas of Mansfield Plumbing Products has taken notice of this, too, and made a point to connect with younger employees, looking at means of communication and schedule rotations that allow employees to switch with one another if needed.
“We all have different kinds of mindsets, and for us, it’s about understanding that millennials aren't just lazy or stubborn or don't want to work. That's not it. They just do things differently,” Thomas said. “They value different things ... and we have to understand what that is and then kind of meet in the middle.”
She admits, this can be a “huge challenge for manufacturing,” but by listening, Mansfield Plumbing has honed in on it's employee needs and taken steps to address them, including starting a cross-departmental team.
The Phoenix team includes a volunteer from most functional areas -- manufacturing, human resources, finance and other departments -- and meets on a regular basis to discuss ways to improve the environment for employees.
Mostly, Thomas said, the requests have been doable. They’ve added a filtered water system to replace water fountains, offered subsidies for required steel-toed boots and made piggy banks for employees who are expecting babies. They’ve also held family gatherings and employee appreciation lunches, organized by the group.
“Our family events are big things. They are really about showing that we care about not just our employees, but their entire family, whether it's our swimming pool, cookout party in July or breakfast with Santa,” said Reidenbach, employee liaison.
“When we look at the cost of turnover, which is huge. And doing these things with the objective to help lower turnover, it really pays back tenfold,” she later continued.
Miller agreed, the key is to make employees feel valued.
“The old mantra of 'we gave you a job? Isn't that enough?' ” he said. “It’s not.”