Inside Human Resources Blog

The Skilled Worker Squeeze is on!

“What size Coke would you like with your jumbo fries?” the young employee speaks into her headset.

For anyone who has crept through a fast-food drive-through line traditionally experienced three common problems: garbled communications, slow lines, and botched orders. Thanks to gargantuan advances in telecommunications, a McDonald’s franchisee who just happened to be having a problem with hiring and keeping workers found a unique solution. 

What makes this story fascinating is that the young employee above wasn’t speaking into her headset from just few feet away at the drive-through window but at a computer screen nearly 900 miles away in Colorado. This McDonald franchisee outsourced his order taking to a call center.  Who would have thunk?  Now that’s innovation!

I had to experience this myself when I visited a client in Cape Girardeau, MO a few years ago.  Just outside the parking area of my motel off Interstate 55 was a McDonalds. Ironically on my flight to Missouri, I stumbled across a reference in The World is Flat to this particular McDonalds. 

Although I’m not a frequent visitor to McDonalds, I couldn’t resist a visit this time. I had to see for myself how operators in Colorado could take my order and cashiers in Missouri were able to pair my photo with my order. The result for me and thousands of other customers: less order mistakes, fewer complaints, and faster service.

The system cut order times by 30 seconds – monumental in an industry where success is measured by 5 second improvements.  It reduced errors by 50 percent and saved labor costs through efficiency even though the call center workers were paid more than the line workers.

Who would have guessed that this system would work?

In an Associated Press story this past weekend, the story popped up again.  This time the fast-food restaurant was in Montana but the orders were being taken in Texas. Similar stories keep popping up.  A customer’s order in Honolulu is taken by a call center in California. Within two minutes the call center agent also speaks with customers in Gulfport, Miss and Gillette, WY.

As was the case in Cape Girardeau, this outsourcing was not just about money.  Unemployment in many parts of the United States remains low.  With the exception of individuals with less than a high school education where unemployment over 7 percent, workers with high school, some college, or four-year degrees are few and far between.  In other words, workers with at least some post-high school training or a degree and a minimum of basic skills are working.  If the skilled and the educated want a job, they likely already have it and are at risk for being recruited away.

In places like Montana, Idaho, Wyoming, and Utah, mining, oil and logging field jobs – once low-paying, unskilled jobs – are now soaking up all the eligible employees.  Like technology jobs in the 1990s - which are now on the comeback - high demand-low supply compresses the available pool for low-paying jobs.  Higher pay jobs allow more workers to build and furnish homes.  That means the construction industry needs more workers, creating high demand in this industry. Construction workers need vehicles which feeds growth in auto and truck sales and service.

To attract workers, these industries increase wages, offer more benefits, and entice with bonuses.  With a limited pool of available workers, the workers at the low-end of the wage chain - fast-food worker, nurse assistant, retail cashier and so on – are swept up by these higher wage jobs. That giant sucking sound employers hear are growing industries vacuuming up workers from every nook and cranny.

The effects are everywhere.  The AP story reports that logging equipment is sitting idle because the companies have no one to run it.  A shortage of lifeguards has forced the closing of some pools.  Hospitality workers at posh resorts are being asked to work longer because vacancies abound.  Once filled by foreign workers, this year there just weren’t enough.  This same story was heard over and over again from employers in the beach communities of New Jersey, Delaware, and Maryland.

On a local level, a mere microcosm of what is happening in other communities, this morning’s newspaper reported that the city school district’s director of human resource abruptly resigned to accept another job as supervisor of human resources for another district: a pay increase of over $14,000 for a lesser title.  In isolation this move may not be seen as a trend.  But this follows the resignation of the fourth superintendent in nine years plus a revolving door of principals, teachers and managers. Notwithstanding that this school district has a big problem, not unlike the revolving door in many businesses, the real problem runs deep.

Skilled workers have options and they are exercising them. The fact that so many workers are begin recruited away means only one thing – other employers have openings and they are willing to offer opportunity and money to get them. And unlike the late 1990s when the worker vacuum was located over the U.S., it is now one-big global sucker.  Booming economies like India and China are beginning to share stories about skilled workers shortages.   

The skilled worker squeeze is on. Workers qualified to fill higher wage jobs are in the cat-bird seat. As a result lesser skilled and/or experienced workers have more options. In today’s market they too are unwilling to accept jobs with low wages.

Do you know where your next workers are coming from?

Read more about Skilled Worker Shortages

Learn more about Solutions for Better Hiring and Performance Management

Literacy test backfires on Georgia-Pacific

A recent ruling against Georgia-Pacific by the Department of Labor’s Office of Federal Contract Compliance Programs begs the question:  what has happened to common sense?

Here’s the story in a nutshell:

Georgia-Pacific Corp wanted the workers it hired to be able to read and understand safety instructions and manuals. They also wanted to assess potential of new hires for promotion at a later time. Every new hire at the mill in Georgia was required to pass a literacy test in which they were asked to read bus schedules, product labels, and other “real-life stimuli” to test their reading. Sounds like a great plan especially since literacy is epidemic, maybe even pandemic, in the U.S.

But Georgia-Pacific Corp ran into a problem.  A disproportionate number of African-Americans failed the test. So instead of raising the skill levels of its employees, Georgia-Pacific got slapped with a fine of $749,076 payable to guess-who?  You guessed it – the 399 black applicants who applied to the company but were rejected for hire.

To be fair, the violation wasn’t totally fixed on the literacy test for pre-hire.  The challenge actually resulted because high degrees of literacy weren’t required for the mill jobs. They were however required for supervisory and management level positions.  Therefore, candidates weren’t disqualified because they couldn’t do the entry-level job but because they didn’t have the potential to advance.

The moral of the story is a reiteration of what many of you have read over and over.  Employment testing is safe to use as long as you are testing for the skills and job fit required for the job. But testing for skills, attitudes, behaviors and personality that are not required to perform effectively and discriminate against minorities may come back to bite employers. 

Before selecting any pre-employment test, do your due diligence. Understand what the test was designed to test and make sure the information you get is absolutely necessary. If you are already using any assessments in your organization, do an audit to check you are testing for only what you need to know.   

And please feel free to call or email us if you have any questions about tests you are considering or currently using.  We’ll be happy to do a review and audit for the appropriateness of your screening and selection tools.

For more about Georgia-Pacific, read Feds Give Failing Grade to Literacy Test

Jason Bourne, Dental Hygienist?

Personality tests seem to keep cropping up on the Internet like weeds in your lawn after days of rain.  Many are claiming to be predictor for selecting careers and hiring the right employees.  I'll forego my soap box discussing the difference between behavioral types and five-factor personality models but let's suffice it to say, using behavioral styles/types (DISC and MBTI) to assess job fit is pushing the envelope a bit.  (Personality assessments based on the five-factor model however do have proven research and validation showing a correlation between job fit and performance.) 

But I digress.  Michael Moore, not the writer/director/activist but the PA employment attorney, published a great post a few days ago.  A fan of Jason Bourne, Mike was impressed how MBTI could accurately match Bourne's ISTP type to that of a hitman.  His enthusiasm waned however when he discovered the same type also matched a dental hygienist.  Now I realize a few of you may feel your dental hygienist may be worthy of the "hitman" title, but most would likely agree that hitman or dental hygienist would rarely be listed as #1 and #2 career choices.

You can read more about using MBTI for career and job fit on the PA Employment Law Blog.

Another Worker Well Going Dry? Tell Me It Isn’t True.

Guess this country.

Businesses are being forced to reconsider just how quickly they will be able to grow, because they cannot find enough people with the skills they need.

Recent growth in many markets and industries has been so great that it has rapidly transformed the type of skills needed by businesses.

600 chief executives of multinational companies said a shortage of qualified staff ranked as their biggest concern in __________. Hint: Shortages were the second-biggest headache in Japan.

If you guessed the United States, you are W-R-O-N-G.

Ok, maybe you are partially right. The United States is on the brink of The Perfect Labor Storm, too but the number of employee shortages pales in comparison to those projected to hit Asia. Yes, you read that correctly. China and India!You recognize those countries, the ones to which U.S. businesses are shipping jobs.

Despite being home to more than half the planet's inhabitants and many of the world's fastest-growing economies, the shortages of skilled workers in Asia are threatening to stall growth, much like it has in many developed countries.

Who is to blame?  Pundits in Asian countries blame good old education.  Sound familiar?  Schools and universities, particularly in China and India, have been unable to keep up with increasing demand for more students with more advanced skills.

For instance, there is a dreadful shortage of doctors. Currently there are only 4,000 general practitioners in China. But if the government is to achieve its ambition of establishing community hospitals for the country's 500 million urban residents, it will need 160,000 doctors to staff them. That number is a drop in the bucket compared to the huge shortage of nursing staff.

The scarcity of accountants in Hong Kong and Shanghai is having a regional impact too. These country’s bean-counters were trained in an anti-capitalist, Communist-era system, ignoring things like profits and assets.  To acquire accountants who can compete in a capitalist world, China’s neighbors are poaching their best and brightest.  Even in Hong Kong, CEOs are asking, ““How are we going to do this without enough staff?”

All this economic and financial success has propelled explosive growth in the travel industry, especially Asian airlines.  The result: a shortage of pilots. India has fewer than 3,000 pilots today. By 2025, they will need more than 12,000. China will need to find an average of 2,200 new pilots a year just to keep up with the growth in air travel, which means it will need more than 40,000 pilots by 2025.

Even India’s leaders are concerned that there are not enough skilled graduates to fill all the jobs being created. Nasscom, which represents India's software companies, has estimated that there could be a shortfall of 500,000 IT professionals by 2010.

There is also a severe shortage of good managers. A study by the McKinsey Global Institute predicts that 75,000 business leaders will be needed in China in the next ten years. It estimates the current stock at just 3,000 to 5,000.

As if all this were not bad enough, the Asian talent shortage is set to get worse. The predicted inflow of investment, together with the growth of local companies and the rising expectations of foreign investors—especially as other markets are slowing—mean that the pressure to find and keep staff is mounting.

How will this impact U.S. businesses? The near-sighted might breathe a sigh of relief thinking Asian worker shortages will mean less out-sourcing. That might be true if it were not for the fact that to the most productive will go the spoils.

Skills shortages show up in two forms: higher staff turnover and rising wage costs. You can’t improve productivity when you’re constantly churning your workforce, especially the skilled workers, and you can’t be as profitable when you’re forced to increase wages and entice candidates with bonuses.  And yet that is exactly what is facing U.S. businesses.

U.S. workforce growth was fueled for the past 50 years by baby boomers, women and foreign workers.  Now the baby boomers are retiring or at minimum changing the way they work. Women are staying-at-home or starting their own businesses (or both). And foreign workers are finding lucrative career opportunities in their native countries.

Building a skilled workforce is as much about a company's general attitude as its tactics.  The first step is a mindset that retention is more important than recruitment. With such a mismatch between supply and demand, companies will have to become better at hiring good staff and keeping them. But as some companies become better at this than others, job-hopping and poaching are set to continue for many years.

Read more about the Asian Skills Shortage.

Read more about Workforce Trends That Will Change The Way You Do Business in The Perfect Labor Storm 2.0 on sale now.

Wake Up Everybody! New DIVERSITY video online.

Diversity is no longer just a black and white problem. The diversity of diversity issues is astounding: race, regional origin, gender, generations, skin color, religion, hair style (or lack of it), stature (tall/short/fat/thin), generations and so on.   

Yesterday SPS was the gold sponsor for Diversity Day, sponsored by The Lancaster Chamber of Commerce & Industry. To kick off the event, I created the following video, Diversity: Wake Up Everybody! The response was great and several companies requested copies.  I posted it on YouTube for everyone to view but if anyone is interested in purchasing a copy, please send me an email to iinfo@perfectlaborstorm.com.

Common Sense Rules to Minimize Email Stress

E-mail has become the scapegoat for worker stress and lost productivity. Is the criticism fair?

In a recent post I commented about new research just released in a London Times story.  While reading the story (and being asked to comment on it during an interview), I couldn’t help but think that I heard this story before.  In the late 1980s and 1990s, voice mail was the catalyst for all things wrong in the workplace.  Employees and managers alike would complain about spending an hour or more checking for messages and beginning a game of phone tag with the caller.  Many callers even described the experience as entering “voice mail hell.”

But is technology the culprit or just the cover-up for another case of communication being used badly. Before email, we had voice mail and fax machines and just the plain old spoken word.  How much has been written over time about workers wasting time around the water cooler?  And in meetings?  And on the phone? How much time is lost every day listening to people who talk too much….or too fast…..or too loud…..or about everything but business?

What it all comes down to is this: communication.  To be more exact, it’s the misuse and ineffective use of the tools we use to communicate with one another.  Like every other form of communication, email can be a magnificent tool when used properly.  When used improperly, it can become a dangerous weapon.

One thought occurred to me reading the Times story: how many people are stressed out by other people checking their email.  For a significant segment of the population, email may in fact be a de-stressor.  Admittedly, it is disruptive and bad manners to be checking email sitting in a business meeting, at the dinner table, or in the theatre.  But is it checking email that’s the problem or is it your companions, co-workers or even the guests at the next table who are stressing because YOU are checking emails.

Here are a few common sense rules to help minimize email stress:

1. Tell others how you prefer to communicate – by email or phone – and when you will respond.  If you only check emails and voice mails in the morning or at noon or the end of the day, let the caller know.  Let them know how they might reach you in an emergency.

2. Ask others how they prefer to receive and respond to messages.  If someone sends an email but you respond by phone, the sender may not check his voice mail regularly or may not have access to it. Likewise, the e-mail sender may be traveling and not be able to respond easily or in a timely manner.

3. Use spam filters or use spam filtering software to cut down on the number of emails you receive.  But be careful to avoid setting the filters so high that you block important messages.  Check your junk email folder periodically for good emails that might have been blocked.

4. Set up a special private email account. Give it out to only those contacts who can reach when an immediate response is necessary.  You can also use text messaging for this purpose too.

Email Stressing Out Workers?

I just got off the phone with ABC-News affiliate KOMO 1000 News in Seattle.  Just a few hours earlier I received an invitation - by email of course! - to respond to a story in today's London Times about e-mail stress keeping workers on edge of inbox. 

The Times story reports that "more than a third said they thought they checked their inbox every 15 minutes and 64 per cent said they looked more than once an hour. When researchers fitted monitors to their computers, workers were found to be viewing e-mails up to 40 times an hour. About 33 per cent said they felt stressed by the volume of e-mails and the need to reply quickly. A further 28 per cent said they felt “driven” when they checked messages because of the pressure to respond. Just 38 per cent of workers were relaxed enough to wait a day or longer before replying.

These percentages are not surprising.  They nearly match the population break-down for behavioral styles.  Using an assessment like CriteriaOne DISC, research demonstrates that some of us are energized by solving problems quickly and lots of interaction with other people.  Typically those two styles comprise about 46% of the population. 

The remaining 54% prefer a steadier pace and more orderly, controlled environment. Researchers found that many workers felt “invaded” by e-mails interrupting them as they tried to concentrate on their work. They felt pressured to switch applications to see whether the e-mails were urgent.

That begs the question: is email stressing workers to the point of distraction and lower productivity or energizing workers, giving them a sense of urgency and a greater ability to interact and control.

Dirty Little Secret: Background failures on the rise

Employers these days must be asking themselves, "What's Next?"  The media is filled nearly every day with stories about current or impending skilled worker shortages. To add to the pain, more red flags are popping up in background checks than ever before.

The annual Hit Ratio Report and Industry Analysis, published by Kroll, the risk consulting company, revealed another annual increase in criminal record hits, discrepancies in past employment verifications (from 36.5 to 49.4 percent) and education verifications (from 14.1 percent to 21.6 percent).

Some of the hardest "hit" industries are:

• Nearly 50% of candidates in Construction, Automotive, and Retail had positive DMV (Department of Motor Vehicle) information hits.
• Over 50% of candidates in Business Services, Real Estate, and Automotive had hits on their credit history.
• Over 50% of candidates in Transportation, Construction, and Non-Profits had hits on their employment verification.
• And over one-third of non-profit and construction candidates had hits on education verification.

One industry hit particularly hit hard by high rates of background failures is law enforcement.  In Santa Fe, recruiters are attempting to fill 15 vacancies this year but more than 60% of applicants are routinely found to be unfit after background investigations.  In Las Vegas, the background failure rate is almost 70% creating a formidable challenge for recruiters attempting to fill 2,000 positions over the next five years.  Candidates have concealed a range of criminal activities, from prostitution to fraud and drug use.

In Phoenix, more than one-third of the police recruits are failing polygraph examinations.  In Orlando, about half are not surviving pre-polygraph interviews. One candidate was recently dismissed after listing two fraudulent college degrees that the candidate purchased online.

The problem isn't only failed background checks.  In Las Vegas about 23% of candidates never get past a mulitple-choice basic knowledge test. Another 40% fail the physical training workout. But that's a drop in the bucket to the 70% failure rate when it comes to background checks and polygraph exams.

To give you a sense of the challenge facing employers, the Las Vegas Police Department has to fill 400 available jobs this year. That means its recruiting strategies need to attract over 600 applicants a month.

The Las Vegas Police Department is not alone in their recruitment challenge.  The FBI had to change (lower?) their standard because too many candidates were being rejected. The FBI is now accepting recruits who smoked marijuana in the past but have not smoked it recently. 

What's next in this Perfect Labor Storm?  What have been your experiences with background checks?  Are background failures on the rise in your business? Have background checks helped you avoid any wrong hires? 

Perfect Labor Storm Author Releases Video Series

Where have all the workers gone?  Jobs are changing. Workforce is slowing. Educational attainment levels are lagging. Skill gaps are rising.  The Perfect Labor Storm is imminent. A shortage of skilled workers is putting the brakes on projects, delaying expansions, and applying upward pressure on wages and benefits. 

In anticipation of his new book Perfect Labor Storm 2.0: Workforce Trends That Will Change the Way You Do Business, available for sale in September 2007, author/consultant Ira S. Wolfe announced the release of his “Where Have All the Workers Gone?” video series.  Each video, running for 7 minutes or less, highlights different workforce factors and trends which are driving changes that will change the way all employers do business.  The first video creates a compelling image: aging populations and skilled worker shortages colliding in the marketplace.  The second video focuses on skills gaps resulting from critical worker educational deficiencies and embarrassingly low literacy rates among U.S. workers.

Future videos scheduled for release in late summer and fall 2007 include trends about the four working generations, women in the workforce, healthcare costs in an active, aging workforce, the heavy weight of obesity on productivity, and more.

The Skilled Worker Shortage and Skills Gap videos can be viewed by visiting www.perfectlaborstorm.com.  Direct links are:

Skilled Worker Shortage: www.perfectlaborstorm.com/SkilledWorkers.wmv

Skills Gaps: www.perfectlaborstorm.com/SkillsGaps.wmv

The videos are also available on YouTube.com.

As founder and president of Success Performance Solutions, Ira S Wolfe has led his workforce consulting firm to national prominence, helping organizations find and hire the right employees, align people with business operating objectives, and identify high-potential leaders.  Wolfe is also the author of Perfect Labor Storm and Understanding Business Values and Motivators.

Wolfe has been the featured keynote at a wide variety of conferences, conventions, association meetings and Chamber of Commerce audiences, reaching thousands of business leaders and human resource professionals every year. His clients include small and mid-sized businesses, private equity and public companies, major trade associations and consulting firms, non-profits and universities. 

To contact Ira S Wolfe for interviews, presentations, or keynotes, call 717.291.4640 or email iwolfe@super-solutions.com.