National unemployment figures are something of a puzzle for general contracting and construction management firm Burt-Watts. Despite the fact that 11 million Americans are out of work and construction is one of the hardest-hit fields, the Austin, Texas, company has persistent trouble filling key jobs.
“We have several positions open for [someone with] highly specialized skills,” says Heather Merz, the company’s chief financial officer and head of human resources. As it has become more difficult to hire experts in ground-up construction who also have local knowledge and contacts, Burt-Watts has had to become more aggressive in outreach and has seen labor costs rise as it has been forced to lure new hires with richer benefits.
“As a smaller contracting firm, it's extremely hard to compete with a national firm that has come into the area and hires,” Merz adds. “We're having to get creative and make efforts to distinguish our general contracting company from others that appear to be the same on paper or at first glance.”
A Severe Shortage
Burt-Watts isn’t the only business experiencing hiring problems. Other builders as well as farmers are seeing shortages of workers so severe that it's cramping productivity and hindering growth. High-tech industries may be next , at least according to proponents of looser immigration. Experts expect employers of skilled tradespeople, such as welders, machinists and electricians, will also see big gaps in need and availability of workers.
Even more pedestrian jobs like sales representative and driver are among the five most difficult to fill this year, according to ManpowerGroup. Skilled trades, mechanics and teachers were also among the 10 employees most scarce in relation to demand, according to a survey of more than 1,000 U.S. employers by the Milwaukee-based workforce solutions firm.
That same survey found that worker shortages are actually less serious this year, which found 39 percent of U.S. employers having difficulty finding staff with the right skills compared to last year, when 49 percent reported the same problem. Other measures, however, suggest the talent shortage may be getting worse and that any improvement is due to employers working harder and smarter to hire the right people.
One sign of a worsening problem might be in the fees paid to recruiters. These fell by as much as 40 percent during the financial meltdown, according to Russ Hovendick, a career consultant in Sioux Falls, South Dakota. “In recent months, these fees have jumped to pre-recession levels and beyond,” Hovendick says. “In some cases, the fees offered have reached a 50 percent increase in just the past six months."
Unfortunately, earning those higher fees has been difficult for recruiters, who are struggling to find top-shelf candidates to fill the positions. Chris Heinz, vice president of operations with St. Louis recruiter Westport One, says desirable candidates routinely field offers from multiple employers, and demand in industries like construction and manufacturing is so strong, his recruiters can’t keep up. “It’s not coming,” Heinz says of the talent shortage. “It’s already here.”
Are Employers To Blame?
There are multiple reasons for the talent shortage, including retiring baby boomers and a more slowly growing labor force. High-growth, labor-intensive industries like mobile app development may have unfilled positions due to a lack of qualified engineers. And geographic relocations, such as construction workers who leave areas where there is little work for stronger job markets, help contribute to regional shortages.
Heinz says employers are partly to blame because they’ve clung to overly conservative hiring practices that were appropriate during the downturn but aren’t getting the job done in a healthier economy. For example, employers are still making low-ball salary offers to qualified candidates in hopes of landing a star at a discount price. “But that's no longer working,” Heinz says.
ManpowerGroup’s survey found that some businesses are reacting by emphasizing training and development for existing staff, seeking out untapped talent pools for recruiting, and hiring what it calls "teachable fits"—people with basic skills who will be expected to learn more advanced skills on the job. But so far, only a few businesses are responding at all. Just 23 percent are doing more training, the most popular response to the survey's question of how companies are handling the labor shortage.
At Burt-Watts, Merz says they've improved benefits, now offering medical, dental and life insurance at no cost to employees, matching retirement contributions dollar for dollar up to 3 percent of salary, and supplying laptops, portable printers and smartphones to field staff. As an added inducement, the company lets some employees with long commutes work remotely part of the week.
Burt-Watts has also moved beyond help wanted ads and word of mouth when it comes to recruiting. Merz’s teams of recruiters now set up booths at job fairs, visit college campuses that offer construction degrees and network with alumni offices.
In addition to improving recruiting activities and compensation plans, companies should streamline their hiring processes, Heinz says. Too many require multiple rounds of widely spaced interviews before making an offer. As a result of these delay, candidates often take other jobs, tired of waiting around for the company to make a decision. Employers need to be more efficient, committing executives’ time so candidates can get all their needed interviews done in a day or two.
Employers also need to stop low-balling qualified candidates. “They have to come up with the best possible offer and put it on the table, because competitors are doing so,” Heinz says.
Not everybody sees a serious employee shortage. “Workers, generally, are not in short supply,” says Brian Kelsey, an Austin, Texas, economic development consultant. Although some industries and occupations are seeing a shortage of qualified workers, the scope is limited, he believes. “There are currently 11.5 million unemployed people in the U.S., and [another] 8.2 million part-time workers looking for full-time positions,” Kelsey notes.
Employers should not confuse employees leaving for better offers with a talent shortage, Kelsey says. “I don't think a more serious, widespread labor shortage is a very likely scenario,” he adds. “Companies adapt, as manufacturers are demonstrating all the time with technological advancements.”
No doubt they will, just as Burt-Watts is doing. But Merz thinks they may still have to make more changes. “As the construction market in our area continues to grow and the competition becomes more fierce, I see the shortage continuing to worsen,” she says.
Heinz concurs. “I see this getting as bad if not worse as it was in the dotcom era, because it’s more expansive,” he says. “In '97 through ‘99, it was all about tech, although other industries had some trickle-down effect. This time, I see it coming in more industries than just tech.”
There’s no doubt that the hiring landscape is changing. In some fields, such as construction, the attitude toward hiring has changed from favoring employers to favoring candidates. No longer are companies able to pick and choose from a pool of needy candidates. Now they’re the ones hoping to get chosen.
“Our goal is to make certain that our name is recognized,” Merz says, “so that people stop by our booth first and want to come work here.”
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