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

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