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Friday, 09 March 2012 10:21

Talent, jobs gap asks more of employers: Industry innovation, education, extended unemployment benefits among reasons for continued job disparity

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WEST MICHIGAN — With scores of jobs going unfilled, unemployment remains high as disconnects between the region’s labor pool and employer needs persist.

Beyond some low-skill temporary manufacturing work, the region needs people to fill high-skill technical jobs as well as specific trades, such as welders.

What frustrates staffing and human resource service providers is the combination of a dwindling qualified talent pool and a market with outsized employer demand. According to a number of HR professionals, employers and employees are likely to face a paradigm shift as post-recession innovations in production continue and the base of low-skill manufacturing jobs gets even smaller.

Problems at the state government level also continue to wear on staffing agencies as well as the unemployed. Sources indicated that the consistent extensions of unemployment benefits have hindered some staffing firms from making any headway in placing people. The extensions also short-change the ability of workers to remain relevant, sources said.

Another perspective says employers will have to become more involved in engaging the education system on several levels. Companies have to get better at forecasting their needs to four-year and two-year institutions as well as high schools. Companies also need to be more active in promoting lifelong learning for adult workers. And on the same token, workers have to be open to continually improving their skills sets.

With some workers reluctant to take a pay cut and others not comfortable moving out of the job market they know, a shallow pool of human capital has all but dried up, according to several sources.

“We’re at an all-time low with resumes in our resume bank,” said Rob Strate, director of HR services for The Employers’ Association. “We’re kind of scratching our heads like a lot of folks. … One conclusion we have is maybe all the good people left Michigan.”

With a generation of baby boomers set retire in coming years, companies will want to make investments to improve their current workforce while planning to fill their back end with new talent as new positions are created.

Sherri Welsh“This may just be the new normal; we just haven’t adapted to it yet,” said Sheri Welsh, president of Welsh and Associates.

She said the current talent shortage could have been predicted even prior to the recession.

“You could look at national reports and Bureau of Labor Statistics and the demographics, (and it was clear) we were going to have a talent shortage,” she said. “Then we came out of the recession and things picked up … and the jobs created post recession are very different.”

Welsh likened today’s employment boondoggle to the structural unemployment situation of the 1980s. With the rise of Silicon Valley, computer programmers became an in-demand commodity, yet companies were hard-pressed to find them.

“It’s a struggle,” she said. “Many companies are just trading talent right now.”

If the current job gap has any upside, it will be companies taking a hard look at their retention and attraction strategies.

Welsh said that for generation Y’s or millennials, who will soon begin to make up a greater portion of the workforce, there is more of an emphasis on maintaining a work/life balance that fits their lifestyle.

“People want greater flexibility in their careers,” she said. “They don’t want to give up more of their lives outside of work.”

Welsh said offering new types of benefits and incentives should be especially important to companies who want to keep their top employees.

“Employees want to know their efforts are being recognized,” she said. “I’m not sure folks realize how important it is to incentivize top workers. Things have to be a little more personalized.”

Strate said while there does seem to be a movement on the west and east coasts to offer “quirkier” alternative benefits — perks such as at-your-desk meditation, pet insurance, discounted computers and laundry services are becoming part of that personalization — those shouldn’t replace core benefits. To employers, this means additional cost, but these voluntary benefits aren’t the only solutions. More practical answers mean trying to find interesting, challenging work for employees and making sure there is room for career growth. Another strategy is finding money in the budget to competitively pay people, Strate said. Companies must also involve employees in the transition process.

“Not involving employees in that transition is a sure way to upset people,” he said.

Welsh said companies are making money right now. If they’re not, they have bigger problems than just talent.

“The reality is if you don’t have a good operation, you’re not making money and your environment is not a good place to work,” she said.

However, more money isn’t the primary reason people are lured away from their current jobs. According to Welsh, there is no number of carrots and sticks she can offer to get people out of a company where they feel the work they’re doing is meaningful, rewarding and recognized.

Ruben Juarez“The benefits are the biggest factor driving people away from their former employer,” said Ruben Juarez, president of Workforce Management in Holland. “Salaries aren’t driving it — things like medical, 401(k) options and profit sharing are what people look for.”

Juarez said it’s not only what kind of packages these companies offer that pushes people to look for a new company. Through the economic downturn, when many large companies began laying off personnel, employee uncertainty ran through the ranks.

“People aren’t enticed to work for large companies anymore. Instead, their interest is in more mid-sized companies,” he said. “Typically, it’s a new, up-and-coming technology-based company outside of automotive.”

Juarez recently expanded his company’s operations into Muskegon to keep up with client needs. Quite a few people out there are willing to take a look at other jobs, he said.

“Where we’re getting them from are other companies who are not as competitive,” he said.

Welsh affirmed this sentiment.

“Unfortunately, the clients I represent are the winners,” she said. “I’m doing the work for the Yankees, and it really sucks if you’re the Milwaukee Brewers.”

While part of the burden rests on companies to keep their HR strategies up to date with the market shift, workers’ responsibilities of continued learning and skill enhancement have to take on a more active role, sources said.

“Companies want to hire people with specific skills, but also people who are willing to change,” Welsh said. “They’ll hire those that can get it done today, but with the ability to change and acquire skills. The next generation is going to have to do a little paradigm shift and do whatever it takes to stay on top of the game.”

In late 2011, Dean Whittaker, president and founder of Holland-based consultant group Whittaker Associates, wrote a white paper outlining 10 trends impacting economic development and real estate this year.

Work is becoming more complex, requiring a few higher skilled workers to achieve the same level of output, he wrote. Thirty percent of work will be done at home offices, with a focus on meaningful work that can be done in a globally competitive way.

Talent will determine where businesses locate, based on where people with in-demand skills choose to live. Education, he says, will “get called to the principal’s office,” meaning business will begin to demand more from educational institutions to provide them with more of what they need.

This explains part of the third point focused on education and training. As the need for certification skills grows, the knowledge versus skill dichotomy will shift from more four-year degrees to skill programs as the return on investment comes into question. Demand for convenience and low-cost education will push learning to an online environment as well.

Talent 2025, an organization of more than 60 CEOs from 13 West Michigan counties, is stepping in to try to illuminate and offer solutions to the talent gap in the region. Companies involved include Amway Corp., Haworth Inc., Trans-Matic Manufacturing Inc., Herman Miller Inc. and Spectrum Health.

The organization has established working groups co-chaired by the CEOs in areas of early childhood development, K-12 education, college and work readiness, post-secondary education, adult workforce development, and employer practices and entrepreneurship. The goal of the working groups is to help inform best practices in the talent development system.

Kevin Stotts“I think the general message has been, you’ve got to go to college to be successful,” said Talent 2025 Director Kevin Stotts. “But what the reality is, with the sort of complexities of industries in West Michigan, not every job in any industry requires an associate’s, a two-year or four-year degree. The jobs available are really a blend of certificates and two-year, four-year degrees and beyond.”

Stotts said the education system pushes kids in high school into pursuing four-year degrees at the expense of programs that would provide some sort of certificate they could achieve in one year, two years or less. These certifications would provide a competitive wage, oftentimes competitive with someone who has a four-year degree working in the same company doing something different. Sometimes, they are in such demand that employers would be willing to pay for the certification.

“What we’re talking about right now is a program where we are bringing together six companies in a partnership with (Grand Rapids Community College) and Ferris State University. That starts with a certificate and results in a two-year degree with the possibility of a four-year degree,” Stotts said. “The employer would provide a part-time job and on-the-job training at the same time the student would go to school that’s paid for by the employer.”

There is an issue of perception that has to be overcome, Stotts said. Every one is aware of it and everyone is talking about it, but it hasn’t reached the general public in a way that explains what that means to future jobseekers.

Welsh said she was a big proponent of companies growing their own talent because many positions being created today are not good fits for entry-level workers or recent graduates. For the thousands of students checking out every semester with the right skills, companies will have to do more to find ways to keep and engage them in West Michigan, she said.

“What exists today in advanced manufacturing should be very attractive to people,” Stotts said. “With that adult workforce who were downsized and didn’t have the skills, what we’ve got to do is get to a place where we value and invest personally in lifelong learning.”

There are 698,000 people in the adult workforce, ages 18-64, within the 13-county region today, and 446,000 people have less than a post-secondary credential, he said.

Despite the fact that some companies continue to struggle with finding workers, other sectors are showing more signs of life.

Dan Barcheski“One of the biggest growth sectors in our economy are not traditional employers, it’s the small business community,” said Dan Barcheski, CEO at Axios Inc. “The most active market for hiring is small business.”

Barcheski said the trouble is getting those small businesses and potential hires together. For small businesses it’s hard to stay in the downtown area because of high rent and parking, which forces businesses to move farther out where their visibility goes down and foot traffic is minimal, he said. The hub of activity is lost and businesses have a difficult time finding people — or people don’t realize the companies are there.

“There is natural shift occurring here,” Barcheski said. “Unskilled labor that used to fill the plants is going away … not because of some evil capitalistic thing, but equipment has evolved and the market is becoming a more knowledge and service-based economy.”

Barcheski explained the shift as just a normal process, one that comes with some social disruption. He said West Michigan is filled with paternalistic business owners, and regardless of what the media says, they care about workers.

“The private sector can’t take all the burden. … It’s not economically feasible, margins are smaller in all industries and all it does is make it harder to employ people,” Barcheski said, referring to luring talent back to West Michigan.

For those staffing agencies working with the unemployed dropped from the manufacturing markets, among others, the extension of unemployment benefits has encumbered many efforts to consistently help those out of work, sources say.

“Every time the state of Michigan extends unemployment benefits, we see pools of people leaving our office,” Barcheski said. “When benefits get close to running out, our offices fill up again.”

Strate said one opinion that is shared throughout the staffing circle is that when people go on 99 weeks of unemployment, they find ways to live without working. When the unemployment runs out, people aren’t motivated to get back into the workforce.

The cold answer, Barcheski said, is employees will likely transition as they have to, while employers will train those capable of stepping up.

“The broad picture is very complicated, but I see the pieces coming together,” Barcheski said.

Whatever the case, employers must enhance their current workforce and focus on communicating and forecasting their needs, Stotts said, because that helps inform the rest of the parts of the system.

What Stotts said he has been hearing from companies is that they don’t spend enough on internal development because not enough people take advantage of it.

“In the long term, if we don’t solve these issues, we run the risk of employers moving operations where they can get the talent,” Stotts said. “From a competitive standpoint, if we solve this sooner, we can keep companies here and help what places like The Right Place and others are doing in business attraction.”

That’s what will take the region from being mediocre to transformative, he said.

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Read 1563 times Last modified on Sunday, 12 August 2012 11:35

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