Tight Labor Market is Here to Stay

If you’re clinging to the notion that enhanced unemployment is the reason you can’t hire help, let me be the first to say you will find yourself short-staffed – if not closed – come this time next year. Here’s why….

A LOT of People Died; They’re Not Being Replaced

Covid has cost us more than 600,000 lives, and it’s not over yet. The ripple that those deaths have caused throughout our country and culture hasn’t even been examined never mind calculated. The loss of a parent has enormous repercussions on a family – not just for a few months, but for years. Worse, we’re all getting old. Our crap diets, epidemic of obesity, Type 2 diabetes, and a variety of other “behavioral” and “non-compliant” health issues will contribute to the rapid exit of many from the labor market.

Declining birth rates, along with a declining sperm count, has been a back-burner socio-economic issue for decades. China’s lifted the one child rule. There’s a huge shortage of women in both China and India, and some countries are now encouraging motherhood via subsidies and other programs.

I’m not sure this will make much of a difference in the birthrate, though. Seems that regardless of incentive, wealth or opportunity, women choose to have fewer or no children, and that trend will likely continue. Maybe motherhood isn’t the greatest job a woman can have.

Wealth Transfer

You think millennials are spoiled and entitled now? Wait until they inherit a ton of money….

We are on the cusp of the greatest generational transfer of wealth in our nation’s history. As Baby Boomers die, they are transferring their wealth — not necessarily to their children — but often to their grandchildren. According to the WSJ, the average inheritance is a little over $200K. That is a life-changing amount.

Money gives you freedom. Money gives you options. Money gives you the ability to take risks. Money makes it whole lot easier to tell people to fuck-off.

Business owners take heed: If you’re difficult to work for and/or your business depends on a never-ending supply of people who are poor, desperate, or have few economic options, you may need to reconsider your business model.

Retirement

The tail end of the Baby-Boom generation (those born in the late 1950s early 1960s depending on who’s talkin’), is nearing retirement age, which can range from 62-72, or earlier, depending on how much money you want to pull from Social Security and your other accounts.

It’s estimated that Covid “forced” about 2 million people into retirement. Some could be enticed back into the job market, but most of these are permanent life changes – they will never return to the labor market.

Money managers are quick to point out that people can’t “afford” to retire, and you are likely to outlive your money, but that’s mostly their commissions’ talkin’. You’d be surprised how little you need to live on when you only have two old people to feed, and all your stuff is paid for.

Nevertheless, depending on the nature of the work and people’s health, some of boomers, of course, will continue to work. However, those are more likely to be at the very top-end or very bottom-end of the income spectrum. The rest of us will sell our homes, move to someplace cheaper, and be done with working for “the man” every night and day.

Small City Employers are at a Disadvantage

Gone are the days that a company in Des Moines or Charlotte or Salt Lake could pay less than a company in San Francisco or New York. If your profession is in demand, and you can work virtually, no longer does your compensation and career path need to be stifled because you want to live in a smaller city.

This is the start of a golden age for labor. Companies that pay more and support virtual workers will suck talent out of smaller markets – to the detriment of those companies headquarter or office-ed there.

Regional pay scales are on the shelf next to the fax machine. No one cares where your office is. If you want IT talent, other highly skilled, gold-collar workers, you’re going to need to level-up your compensation, or you are not going to be able to compete. And, if you can’t compete? You’re not going to be in business.

The Commute? That’s Comin’ Outta YOUR End!

Jamie Dimon, a champion of capitalism (until he’s short on cash, then he’s first in line at The Fed), has “demanded’ JPMorgan/Chase workers return to on-site work and Jamie’s “culture,” adding that if people didn’t like the commute, that’s “too bad.”

Maybe Jamie isn’t good at math? Let’s say you have a 45-minute drive to work, and are on-site five days a week (eight hours working, one hour unpaid lunch), that’s 52.5 hours a week “dedicated” to work – minimum. Men, add in an additional hour of “prep” time; women 1.5 hours of prep each day and now you’re up to 78.75. In other words, almost double the amount of time compared to the hours you are paid for….!!

So, if you’re making $35/hr your real hourly is closer to $17/hr – before taxes and before other expenses and lost opportunity costs, like your side hustle or education. That’s why the poor stay poor. And, that’s also why I’m not going to drive to your office, or commute to a restaurant, or hire a sitter (if I could find one). I think I’ll just stay home, cook from scratch, take on-line classes, and look for job where I contribute 40 hours and get paid for 40 hours. That’s just a smart business decision. It doesn’t make me an entitled ass-hole who doesn’t want to work.

It’s not about the commute — it’s about being paid for all my time. I’m contributing time (which, I believe, is the same as money), to enhance Jamie’s “culture” – whatever metric that is. However, all that good culture money is coming out of my end, not Jamie’s. He’s all up for the “free” culture, but I’ve yet to hear him say that his culture is important enough that he’s going to part-with-some-cash for it.

I believe in karma (and capitalism), so I feel confident Jamie and his other banking buddies will receive a big message about onsite work (probably when one of their cloud APIs goes down in a smoldering heap of technical debt). At that moment, they will see that labor isn’t as forgiving as The Fed. I think Jamie will also learn that he’s not a home-town hero, a lot of employers are more than willing to hire talent from Ohio.

Finally….

Here’s a universal truth: When you’re rich, life doesn’t change very quickly or very radically. For the affluent, things roll-along, even in the worst of times. Because many wealthy capitalists haven’t personally “felt” the change Covid has brought to the labor market, they don’t think that it’s real. They don’t understand this “entitlement” of labor, or that the world is fundamentally different now, and why we just can’t order people to “go back” to our good-old pre-Covid cubical culture.

Even before Covid, the rise of gold-collar, knowledge workers was beginning to reverse the employer advantage in competitive labor markets like tech and healthcare. Crisis, as a cultural accelerant, has firmly flipped the advantage to labor – and economists predict it’s going to stay that way for a l-o-n-g time….

Labor has had decades of opportunity and advice on how to be a good employee. That cannot be said of employers. Most employers are spoiled, entitled, and have a long history of a “Doritos” style of talent management (“They’re just people, we’ll get more…”). And because so many employers historically have shown zero interest in being a good employer, now they can’t seem to hire anybody.

The tight labor market isn’t about lazy millennials or enhanced unemployment benefits. Things have changed, even if they haven’t changed for you personally. Employers need to accept reality, and level-up their hiring game or they’re going to be out maneuvered by those who will.

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If you enjoyed this article, check out some of my other posts and podcasts on employment, interviewing, and the contingent job market.

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July 12, 2021 0

Why You Can’t Hire Anyone

The Great Resignation and The Great Reshuffling have converged. It’s official: There’s a shortage of labor. And, the labor you do find wants to be paid more, and if you don’t pay them more, they’re going to quit.

If you need people to run a business, and you want to continue to run a business (because, the thought of you being someone else’s employee (gasp!) is just too horrifying a scenario for you to consider!), here’s where to start:

Lose the Attitude

My headhunter friends are fond of reminding their (predominately white, male) clients that they are, “~not the cutest girl at the dance.” But, even if you’re smokin’ hot, there’s nothing more off putting than someone who thinks they’re better looking than they really are. And, it’s amazing how quickly those killer looks become invisible when you’re in a relationship with someone who is patronizing and entitled.

Too many employers grossly mis-over-estimate their attractiveness at the Employer Cotillion. They think everyone wants to dance with them. They don’t. You’re not doing anyone a favor when you hire them. This is a transactional relationship, not personal one. You’re simply buying time from a service provider to perform a service that you need. And, often times, it is a service that you cannot do yourself. Your hubris and entitlement is counterproductive to building a high-performing team.

Sadly, attitude and entitlement seems inextricably intertwined with implicit/explicit bias. They’re not dismissing you because of your gender, your accent, your age, your college, your clothing, your life choices. They’re dismissing you because you’re not a purple unicorn, and because they’re paying you (!) they WANT A PURPLE UNICORN, dammit! (Note: they have no barn, no feed, and no idea how to care for a unicorn, but they want one nevertheless)

Let me assure every employer, big or small, prestigious or unknown, that your “impress me,” entitled hiring manager interviews are killing your recruitment program, and your brand.

You’re Lookin’ for Love (in all the wrong boards)

Liking the help isn’t listed on the job description as a requirement, but it’s always the #1 requirement for every job. I’ve lost count of the number of folks I’ve listened to grumble about how they’re short staffed, how they can’t find anyone, and how they’ve interviewed sooooo many people, but well, they don’t know, but, ahh, err, I just didn’t feel, aahh, err, a “connection” with anyone.

Enough with the “connection”! This isn’t Tinder. You need someone to manage your SAP implementation, not marry your daughter. You want connection with someone? Post on Match, not Monster.

Looking for love is the root cause of enumerable workplace disfunctions. Too often likeable incompetents (“Someone I’d like to get a beer with…”) are hired rather than awkward, aloof experts. When you consider the competence/congeniality axis, incompetent sweethearts can suck the life out of your company’s bottom line faster than any irritating high performer.

You want to stay in business? You want to grow your business? Focus less on finding a love connection, and focus more building a team with solid skills.

BTW: If you want to hire talent, you need to learn how to manage and retain talent – they have options. When’s the last time you went to a seminar or picked up a book about how to be a better boss?

Your Dream Doesn’t Pay My Bills

NOTE: Entrepreneurs and small shops: People work for the money. Stop looking to them to finance your “dream.”

The my-dream-must-be-your-dream types generally start their interviews with questions like, “Why do you want to work here?” “Why should I hire you,” (also part of entitlement), or the puppy-dog eyes, and deep, soulful, sigh, “So, tell me, why [companyname]???”

It’s like meeting a blind date, and the first question asked is, “Why are you soooo into me?” Or getting a bid from a plumber, and then asking him, “Sooooo why my garbage disposal??” Nothing could be more irritating.

Am I some kind of dream-killing Nazi? No. I’m a person who is paid to manage time. And, when I hear someone ramble on about the “dream,” what I hear is “~~there’s lots of long days, unpaid overtime, and probably a few unpaid weekends as well.” At no time does anyone ask about MY dreams…

More than 90% of start-ups fail in less than five years. Those that make it past the five year mark don’t catapult to the top of the NASDAQ. More often, they continue to struggle with cash flow, sales, and customer retention. You know: the stuff dreams are made of….

When I look back at the thousands of hours donated to someone else’s “dream,” I realize that what I was really doing was compromising my own dreams, my own career, and worse, my own finances for an “entrepreneur” with a corporate AmEx card and a BMW that never ran out of gas.

My dreams are different now. Now, I dream of a matching 401K.

It’s All About The Benjamins

You can couch it however you’d like, but people work for the money. Period. And, your dreams, ping-pong table, and Thirsty Thursday’s Kombucha pizza parties aren’t going to make up paying 30% below market.

While gold-collar workers may chose more cutting edge or risky work over compensation, they are the few and the lucky rich. Most of us, and especially those at the lower end of the pay scale, we don’t have that choice. For us, it’s all about the money.

Interestingly, I’ve noted that the CEOs bitching the loudest about the Invisible Hand of Capitalism aren’t losing people because they got an extra $30k at their new gig – they’re losing people for an extra $1-2 an hour! Less than $100 bucks a week! That’s not a lot of money for someone who routinely picks up bar bills bigger than that, but let’s pretend you’re not spending your money on $10 beers. An additional $400 a month is enough to cover a car payment, utilities, and a cell phone bill. An extra $5 an hour is more than $10K a year, and while it’s not a life-changing amount, it’s almost an extra $1K a month – half of an average mortgage payment. If you add in a boss who isn’t an entitled asshole, you can see why people are saying, “I’m outta here!” Cleaning hotel rooms, restaurant work, customer-service — those jobs are pretty much the same no matter where you go.

It’s Your Brand

Are you ready to accept reality, and up your hiring game? Here’s what you can do: Hire a professional recruiter. Listen to his/her feedback, and then DO to what s/he says. Be courteous and respectful to all applicants, even the ones you don’t want to hire. One bad interaction can sour a person on a company for the rest of his/her career! AND, if you’re going to be an entitled jerk to your applicants, don’t think for a second that they’re not going to tell their friends, family, and social media contacts about it.

Every interaction, every touchpoint is a chance to enhance or damage your brand. No where is that more important than in the hiring process.

Ensure all hiring managers and interviewers are trained. No one should be a “Brand Ambassador” for your company or be involved in hiring decisions until the are trained. Feedback and mentoring is required. A lifetime of bad habits isn’t likely to change after one training class.

“The world doesn’t owe you a living,” and it most certainly does not owe you a business!! If you’re going to be entitled, insist on free labor to finance your dream, and only hire people you want to have a beer with, finding labor will be very, very difficult for you.

When People Quit, They’re Firing You!

Since the dawn humankind, capital has had the advantage over labor. Revolutions, strikes, unions, labor laws, and even unemployment insurance have helped to level this advantage – but the scales were always tipped in favor of the capitalist employer. Those days are over.

Pre-Covid, the rise of gold-collar, knowledge workers was beginning to reverse the employer advantage in competitive labor markets like tech and healthcare. Crisis, as a cultural accelerant, has firmly flipped the advantage to labor – and economists predict it’s going to stay that way for a l-o-n-g time….

Labor has had lots of opportunity and advice on how to interview and how to be a good employee. That cannot be said of employers. Most have zero training in how to interview and little interest in being a good employer – which is why, now, they can’t hire anyone. I won’t be the last to say it: You need to level-up your game or you’re going to be out of business.

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June 26, 2021 0