Breakfast Series report: Laboring over labor – minimum wage, coworking and other workforce trends

Introduction

With the unemployment rate throughout the U.S. at 4 percent and Idaho’s rate at 2.6 percent as of December, employers are finding it increasingly difficult to attract and retain top employees for their organizations. It’s a battle for talent, with many qualified job seekers fielding offers from multiple companies. So how do you set yourself apart?

At IBR’s Feb. 7 Breakfast Series on the labor market in Idaho, six expert panelists discussed a variety of topics that can make the difference, ranging from recruitment trends to diversity to company culture.

The Panel

Moderated by Carsten Peterson, attorney with Hawley Troxell

Ashley Davis, Project Manager for Global Talent, a program of Jannus

Patti Perkins, head of Calyx-Weaver, a workplace management services company

Wendi Secrist, Executive Director for the Workforce Development Council under the Office of the Governor

Crystal Severson, Human Resources Manager for the Pacific and Northeast regions for Boise Cascade Building Materials Distribution

Craig Shaul, analyst for the Idaho Department of Labor

Louisa Waldman, regional vice president for Robert Half

 Unemployment rate at historic lows

Patti Perkins:

I believe 2.6 percent is the December unemployment rate in Idaho, which is pretty unheard of. It seems that everybody that wants to be working is working. It’s difficult I think, to find the right person. There’s a lot of layers to that because there are pockets that are more difficult than others to find qualified people.

Then the expectations of the job seeker are very different than they used to be. Since many of the decision makers are still those of us in my generation, we think, “Oh wow, you are just entitled or you are this or that,” when in fact, work has changed. I do think the applicants and the candidates are very definitely in the driver’s seat these days.

Wendi Secrist:

I’ll just add on a little bit to that. Right now, there are about 22,000 unemployed individuals in Idaho, and there are about 22,000 jobs that are open in Idaho. While candidates are definitely more in the driver’s seat, I think a lot of these jobs are simply going unfilled because there aren’t candidates that have the right skills. That’s driving employers to be much more creative in how they recruit and how they train their folks and them being much more engaged in that process through work-based learning like apprenticeship programs, getting involved in co-op programs with colleges, and other things.

I think employers are becoming much more willing to be part of that process, and I think we’re seeing a lot less finger pointing, that you know education isn’t doing its job in training the workforce. Employers having their fingers being pointed at them saying, “Well you’re too picky.”

Craig Shaul:

We have a service that we connect with that provides us information on job listings throughout the state. We can look at it by county and region. It provides the understanding of how long that particular posting has been open. We look at those postings that have been open for 90 days or more as hard to fill. I’ve been in the driver’s seat for a small business before, so I know if you can’t fill a position in 90 days that means it’s impossible to fill, not just hard to fill.

We see about 6,000 consistent job listings; it varies a little bit from month to month, generally about 6,000. About 25 to 28 percent of that ends up being health care related jobs that seem to be constantly being posted. That’s important to note that it’s not necessarily those openings are not being filled, it might just be that they’re constantly open because there’s turnover. Someone comes in, someone always quitting, some position always needing to be filled. That gives you an idea that there’s a constant hard-to-fill problem.

It’s definitely a very tight labor market. 2.6 percent, that’s for December; we don’t have January’s number yet. 2.6 percent is extremely low, I really can’t express how low that is. It’s not an aberration; we didn’t start at 4 percent at the beginning of the year and now we’re at 2.6 percent. We’ve been under 3 percent for over a year. We’ve been under 4 percent for almost three years now. That is a chronic problem that employers have had to come up with a new reality in terms of how they hire staff.

It’s not just a question of job seekers in the driver’s seat; to some extent they are. The problem is, if you’re looking for work, it’s not just that any job is available to you, you have to have the right skills, the right education, and the right experience for that employer. If you don’t have that, they’re not just going to necessarily hire you and train you.

The 2.6 percent is a chronic problem. At this point, employers are having to do a couple things. If they can’t hire, they’re having to change their business model. That means they’re growing slower or they reduce what they can potentially do.

Treasure Valley’s job market vs. other areas of Idaho 

Craig Shaul:

We look at the unemployment rate for the Treasure Valley, it’s lower than the state average of 2.6 percent. The actual lowest is Madison County at 1.7 percent, and that’s right where BYU Idaho is.

Generally, where we see the lower unemployment rates is concentrated around urban areas. Although, there’s the exception of Kootenai County, which has a higher retirement population, so the unemployment rate ends up being a little higher there. It varies around the state, but really, it’s not just a state problem, it’s a national problem. 4 percent for the U.S., that’s full employment and that’s only after it’s bumped up a couple points from November and October. This is a national challenge. We’re not just competing for workers in the state, we’re competing with everybody else in the nation for workers.

Louisa Waldman:

We have specialized positions that we staff in accounting, finance, technology, and administrative that are below 1 percent in terms of candidates that are available for those positions. I think, in general, employers have got to get more creative in terms of how they’re hiring. Speed in terms of making decisions is critical.

We work with several hundred companies just in the Treasure Valley supporting their hiring needs. It’s really interesting right now, just what we’ve done even six months or a year or two ago, has to change now in order for companies to be able to find, attract, and keep the talent. Speed is the number one thing — that they need to make decisions quickly.

Idaho salaries and benefits vs. surrounding states

Louisa Waldman:

From our experience, there are a lot of people coming into Idaho, and they have higher salary expectations if they’re coming from other states. Obviously with the lower cost of living here, in some cases it’s about education, working with those people to educate them on the low cost of living and the difference in salaries.

I don’t know that I can speak from a spreadsheet or numbers perspective about surrounding states, but I’ve overseen this office, and I have for about eight years and we definitely have seen an increase in pay. Employers are coming up in their pay, and they are willing to pay more money for more experience. We’re starting to see that trend, which is great, because it allows for them to attract more talent.

It is an educational process. There’s a difference sometimes in what the employer wants to pay and what the employee wants to make. They’ve got to meet somewhere there if the employer wants to get the talent they need.

Craig Shaul:

In terms of wages and how they stack up with the rest of the states surrounding, one of the programs that we conduct in our office in cooperation with the Bureau of Labor Statistics is called the Occupational Statistics Program. They serve Idaho employers throughout the state. The data is statistically treated so you can compare occupations in regions. You can compare the same occupation in Ada County with one in North Idaho, with one in another state, or throughout the nation. If anyone is looking for competitive information of what they should be paying someone in their occupation, they can go to our website, lmi.idaho.gov.

Wages are probably the most difficult information for us to get in terms of raise in pay. It has probably one of the longest read times for us to determine. Our last release was in May of 2018, that’s for 2017 wages. The next release will be this May for 2018 wages.

Looking at that data, our median wage in Idaho, what that means is the exact middle. So, 50 percent of Idaho workers are earning less, and 50 percent are working more. The median wage is $15.99. How does that compare to surrounding states? We’re actually the lowest. The next highest is Montana at $16.27, that puts them at 39. Our $15.99 puts us at 44, then if you adjust for cost of living, our ranking doesn’t change, however. It kind of moves around for other states, but our state is at 44.

If you look at our median wage unadjusted, Mississippi is at 51, so they’re earning the least amount in terms of median wage. If you look at the adjusted price parity, Mississippi moves up three spaces. Instead of being at 52 in this case, it’s at 49. Hawaii drops 20 some odd rankings to end at 50 and Florida loses another half a dozen or so to be at 51. Florida, in terms of median wage and prices for that state, you get paid the least.

Quality of life as a lure for job candidates

Louisa Waldman:

When we talk to employers about the benefits that they’re offering, we are seeing a lot more of not just health benefits or what you would consider traditional benefits, but obviously flex time, four 10-hour work days. We had one employer that is offering “pawternity” where if you get a new puppy you get a week off, so that was interesting.

For FMLA, there’s a lot of benefits that people are offering, and they’re trying to get more creative. I would also say that retention is critical to the unemployment. If you keep people in the jobs that they’re in, you’re not going to have to go find new people.

Wendi Secrist:

When you look at North Idaho where you’ve got Washington sitting on the border and higher wages and so forth, employers are much more challenged to not only hire but retain their employees, and that’s where they’re being very creative about how they train.

The Workforce Development Council oversees the state’s workforce development training fund, and we’re able to give grants to employers to help train their employees. There’s a project that was funded in early 2018, with the health care industry in north Idaho where they have CNAs that need to be upgraded to medical assistants or patient care technicians because that’s the direction the industry is going. They can’t recruit. There aren’t enough patient care techs to fill those jobs. So, they had to look internally and say, “Alright, where do we have really stellar individuals who are currently in a CNA role, and then how can we train them through a combination of on-the-job training and partnering with North Idaho College for the more traditional part of it?”

The message that those companies are sending to those employees is that we value you, we’re going to invest in you. They can clearly see their pay rise as they learn new skills, and that’s the beauty of a registered apprenticeship model, is that it’s a combination of that structured on the job training, the education through the more traditional methods, and wage progression.

An employer who can clearly outline this is how I’m going to invest in you, this is what our development plan looks like, I think that sets you apart to be able to handle some of those wage issues.

Patti Perkins:

The literature is saying that the benefits that are most attractive and sought after by millennial candidates, and we have to understand that they are not fully half of the workforce population now, they want that professional development. If an employer is willing to do it, that may be a game changer.

The other kind of relaxed benefits — meaning flex time, lax schedules, a little bit less traditional work environment — is also very attractive to many of us, not just millennials. We all kind of appreciate that. It hasn’t been the way that work has been structured for most of my work life, but those kinds of things are very important.

As to wages, I think it would be hard to say that Idaho’s wages are as high as neighboring states. I think it just isn’t so. You can find a job here that will pay the same across lines, but we’re looking often at averages, and Idaho has a very large service economy, which is at the lower end of the wage scale.

We have stuck with the federal minimum wage, so we are still paying $7.25, where Oregon and Washington have increased their minimum wages. We do compete with that. The lower the unemployment gets, the more competitive we are with other states. We will have young people graduating and leaving for higher-paying jobs if we don’t adjust a little bit.

Workforce trends over the past five years 

Crystal Severson:

For our company on the distribution side, we have gone to wireless warehouse inventory management. That has changed our entire automation, and it can deliver goods just in time. One of the things that we’ve found is that we thought it would reduce jobs, but it’s actually created more jobs because we need technical skills to be able to manage all of the components that go into it. I think that there’s a lot of opportunity there for trends as far as we’re one of those companies that are willing to train folks that are willing to learn. So, come on in and we’ll train you. We like to bring you along in our technology so we’re out there working all the time with folks that are willing to learn.

Recruitment and retention of minorities

Ashley Davis:

There are a lot of ways to understand and respond to this question. I can offer some insights based on my work with immigrant and refugee professionals. The impact of diversity on bottom line and company growth is well documented, so I won’t get into that here. As others have mentioned, Idaho is facing a shortage of highly qualified workers, and finding ways to expand your talent pool and attract new candidates is really important right now. But, it’s often not simple, right? It requires changing our processes and our ways of doing things. For example, the recruitment process, a few things your company that can do to connect with highly qualified immigrant and refugee professionals living in our state include educating your frontline recruitment team.

I think a lot of people don’t realize that many immigrants and refugees in our state are fully work authorized and don’t require an expensive and time-consuming visa sponsorship. If you have an online job application, make it international. Include a drop-down menu where people can enter their international experience and international degrees. It seems like a really simple thing, but that alone has prevented a number of people in our program from submitting an application.

Of course, recruiting depends on networking, so encouraging your employees to network, go to networking activities with a number of resettlement agencies around town or Global Talent to connect with international professionals.

In the screening process, reconsidering what it means to be overqualified. So many people in our program are working through a very long licensing process and may not be able to get the position that on paper look like they’re qualified for. For lawyers and engineers, it’s a long process, so rethinking what it may mean to be overqualified.

A gap in a career is often considered a negative, but most of the people in our program have unavoidable gaps just by the nature of being new Americans in our country.

In the hiring process, I think it’s important for us to recognize how we’re often biased for people who are closer to ourselves. I think it’s human nature, but some strategies to balance that include matching interviewers and interviewees with a point of commonality if possible or asking the same questions to each candidate and using the standardized framework to evaluate candidates. One of the things that I recently heard about that I think is pretty novel is assigning a buddy to each candidate who doesn’t evaluate, or rather just provides information and answers any questions that the candidate may have about the interview process and company culture. This levels the playing field for people who don’t have an inside connection that can push them through the process and provide an inside scoop.

As you can imagine, immigrant and refugee professionals are at a distinct disadvantage in the hiring process due to their professional networks and unfamiliarity with the U.S. culture and recruiting norms. This buddy system helps to mimic what somebody who was born in the U.S. and has a broader network, what they might have.

Louisa Waldman:

In terms of how you recruit those types of individuals, we’ve done a lot of surveys on diversity and inclusion, and Robert Half has won a number of awards for that. One thing we’re doing locally and nationally is partnering up with a lot of professional alliances and getting involved in different scholarship funds, and really just networking as Ashley had mentioned. For example, there’s Hispanic Chambers if you’re looking to hire those individuals. We get involved with the United Negro College Fund. I think just looking at overall the whole picture, how involved are you in these different areas?

Also, on social media, a lot of potential employees are looking at how your company is branding itself. Do you have videos out there? If you are winning awards in certain areas, are you putting that information online? If you are trained to recruit a certain type of individual, you want to make sure that they can look at your organization and they can see themselves there. A lot of that is done through videos, quick posting, awards that you’ve won, or organizations that you’re involved in.

Ashely Daivs:

I do want to stress that recruiting is just one piece of things. I think building an inclusive culture is also very important, particularly looking at the retention piece. Making sure that the diverse candidates that you’re recruiting feel valued and are found at high levels in our organization and are able to feel like they can bring their authentic self to work is really important. I know it’s very easy to want diversity but then to expect in the staff members that we hire to think and act like us. Making sure that you’re leveraging internally the diversity that you have at your company is important.

I’ll just give one example. Some of our employee partners that we work with locally are doing things on this front. For example, Wells Fargo has employee resource groups started around women who are really supporting each other to attain higher levels internally. That’s since expanded to different diversity groups, and that’s something that’s important internally in the company. Thinking of things like that can help on the inclusion piece.

Hiring stats and drug testing practices

Crystal Severson:

Across the country we have hired 1,500 associates last year. We have a busy season during the summer, so we do hire a lot of college students or seasonal labor to help us through those seasons. That does impact that number.

As far as drug testing, we do have a lot of heavy equipment and specialized processes. We need our folks to have their full concentration available, and we want them to go home in the same condition that they arrived in. We do test for drugs; we have a random drug testing policy. The major ones we test for are cocaine, amphetamines, marijuana, and alcohol.

Wendi Secrist:

In the last fiscal year, the state, across all the agencies and hiring institutions, hired over 7,500 people into both permanent and temporary types of positions. Personally, within my agency, we were a brand-new agency last year so I hired four, because there’s five of us.

When you think about government, sometimes you don’t think about the fact that they have the same workforce challenges that the private sector has. As the largest employer in the state, we have to look at how are we going to attract and retain the workforce that we need to provide amazing, awesome services to our citizens and our businesses. Don’t feel like government has it easy, right?

Across the board, salaries I think the latest information looking across all different occupations, salaries for state employees are about 12 percent lower than the private sector salaries, with great benefits. That helps. I know at least within my agency, we have a really awesome mission in hoping to make sure that Idahoans have the skills that they need to succeed and that businesses have the employees and the talent type line they need to grow.

For me, personally trying to attract folks in, I focus heavily on the mission of what we’re doing and making that connection. I can’t offer them the same salary, so it’s got to be because they want to make a difference in the state.

Craig Shaul:

I would agree in terms of the state, I think we have a little bit different experience because of the mission that we have on that aspect of public service. The role we have tends to attract people that would be interested in that. Our wages in terms of occupation to occupation, are a little lower than what you would see at private. The mission and also the benefits package, make up enough of the difference.

I’ve been lucky to hire a few people in the last number of years that have been exceptional. Two of those have been minorities as well and that’s awesome. In fact, two of my best interview experiences have been with minorities. My hope for the experience is to be aware of cultural differences. Even on the level of how you communicate, how direct you are, indirect, those things matter. In terms of how you introduce people, there’s things that are different. It’s hard to explain until you’re faced with it.

Patti Perkins:

I might just bring in a little bit on the drug testing. I see a variety of drug testing willingness I guess, from employers, because there is a cost associated with it and it depends on how much they hire. I worked for T-Mobile for 10 years, and it’s been a while since I left them in 2013. They discontinued testing for drugs. I think that given the opioid problems that we have, I think employers are much more prone to do pre-employment and random testing than they were because the prevalence is just so much greater.

HR staffing trends 

Patti Perkins:

My business is very much impacted by the HR staff that a company might have. I work with companies that don’t have HR, and then I work with companies that do have HR, but they don’t have enough. I have seen a real rise in the number of human resources openings. Once the economy started to rebound, that became something that people said, “Oh good, now we can hire our own HR people.” I do see a lot more activity there.

There’s a lot of opportunity to train or to get an HR person networked with local organizations. I’m involved in the Society for Human Resource Management nationally as well as the local chapter of the Human Resources Association of the Treasure Valley. We provide a lot of opportunities for resources and don’t do the training necessarily but can point people in the right direction.

Staying up to date on workforce laws

Crystal Severson:

We have an inhouse legal department in our company and they too help us with clients. We’re in about 38 states, I think. That’s a lot of states to keep track of local laws. We have annual HR conferences for all of our HR staff. We have a call center in Boise where folks can call in and get help on all of their needs. We are continuously training, looking at our processes, making sure that we’re doing exactly the right things to do. We have some processes that we outsource because it doesn’t make sense for us to do those in house.

The rise of working from home

Craig Shaul:

With the Census Bureau, again there is a bit of a lag on this data, I think this is for 2017. In terms of nationwide the number of people who work from home is about 7 million. That’s about 5 percent of the total workforce. In Idaho, it’s 6 percent, so a little above average. In terms of how that spreads, I graphed four counties for the sample: Ada County, Canyon County, Kootenai County and Valley County. Ada County has 6 percent of its workforce, Canyon County is 7 percent, same with Kootenai County. What’s interesting about Valley County that you might not expect, 9.4 percent of its workforce works from home. We break it down by age. What’s interesting is the age group that works from home the most is the 25-44 year olds. The 45-54 year olds are kind of close behind them. Between 25-54, that’s the best represented age group that’s working from home. Until you get to Valley County, and for some reason it disappears. For Valley County, 25-44 years of age are the ones working from home on average.

Louisa Waldman:

A lot of companies have embraced it, and I think there’s higher retention and engagement. In our particular office in Boise, we have four corporate employees who have moved to Boise who are working remotely either in our office in Boise and then reporting in to other states. It’s a trend that we’re seeing with a lot of companies we’re working with as well as our own organization.

I think companies are now realizing that work is something that people do, but they also have outside lives and it’s a whole person you need to look at. The flexibility that you can offer with working from home is going to help you retain and engage employees and even attract people from other states. If the work can be done remotely, you can potentially bring in talent that maybe they’re not living here, but they’re working here. My husband does that actually. He reports in to Atlanta but works in Portland, Oregon.

Wendi Secrist:

You might be shocked, but the state allows work from home. I know that our division of human resources about a year ago, started working on a manual to help provide guidance across the agencies, but it’s not unheard of in state government. One of the pieces of guidance that they give is that it has to benefit the agency, the employer, it’s not just to benefit the employees. That was kind of surprising to me when I came back into the government from the private sector, that even the state of Idaho is offering some flexibility in working from home.

Louisa Waldman:

I think a lot of employers have developed policies and even as supervisors and managers have had to become more adept to managing people remotely. There’s a lot of companies using video. They’re not having people travel as much; they’re doing video conferencing. It’s about adopting technology and using that to supervise or manage somebody or potentially hold them accountable. Managers have got to be more flexible and kind of coming into what’s happening in the world right now.

In the past, maybe even a few years ago there were some pitfalls that people faced by not doing those things and not adopting the technology or checking in frequently. It seems like many companies are very good at it.

There are a lot of people that apply to positions with companies that we’re representing, and they only want to work from home or their only available is remote. Sometimes it works, and sometimes it doesn’t. I really think it depends on the skills they have. Some work can’t be done remotely. Sometimes they hire somebody in, and after you establish yourself and train up, then we can go to a work-from-home situation where you know what’s expected, you know how to do it, and you can be more effective that way. 

Wendi Secrist:

I was going to add that I think it’s an opportunity for companies. If you’re going to start doing that or you’re already doing it, one of the things is investing and training your managers to manage a remote team, I think is something that companies should probably think seriously about.

In my last private sector role, my entire team worked from home. I was in Idaho and I had people in North Carolina, Massachusetts, Pennsylvania, South Dakota, Texas. I had nine reports that were all working from home. At most, I saw them in person twice a year. It’s a different skill set for supervisor or manager. You learn very quickly it’s about outcomes rather than seat time, kind of similar to what’s going on in education. You make sure the job is getting done and the prices to get it and whether they were sitting in front of their computers from 8 a.m. until 5 p.m. on the dot is less important.

I think investing in your own teams to be able to manage people who are working remotely is a great opportunity because it does give you access to that broader labor.

Trends in performance reviews

Louisa Waldman:

A lot of companies are doing more frequent reviews because they are working on retaining their employees. Millennials want more reviews more frequently, raises more often. They just want more feedback, so a lot of companies have adopted policies where they’re doing that more often and tying that to compensation and making that a part of what they’re doing to attract as well as retain their employees.

Patti Perkins:

A couple of years ago there was a lot of noise made about these big companies doing away with the annual reviews. Deloitte did away with it, and there were a couple of other big ones, “Oh, we’re blowing up the annual reviews; we hate it.” Well nobody loves that annual process, but unless you replace it with frequent feedback, which is a much more effective way to manage performance overall, unless you have that, you’re going to be worse off. They took away the annual review; instead of having feedback once a year, employees were getting feedback no time a year.

For many managers, you have to have structure and process or they’re not going to do it because it’s not what they do. They’re doing the work; they don’t think of performance evaluations and all that kind of stuff. I think it has kind of come back to more of a hybrid approach, which makes a lot more sense where you integrate the quarterly feedback, you integrate coaching.