Let us introduce you to our friend. His name is Mike, but he would prefer that to be as far as we go to identify him. Mike owns a small business in the upper Midwest. His plant has high-speed machines that sometimes run at 350 degrees when under full throttle, and there are orders in the books to make those machines run.
But, Mike has a problem? There are no employees to operate them.
“My tools are at 300 degrees,” Mike says. “But we are not using them. We could be running nearly flat out all day. But we let them sit with no action.”
Mike says he goes to extremes trying to locate and hire the 15-17 employees he needs, but with little success.
Mike doesn’t know Bob, but they are in similar circumstances. Bob is the head honcho at an engineering firm in Massachusetts. Bob’s outfit is looking for a few good men or women, 12 to be exact. The current labor situation makes locating qualified candidates, even entry-level ones, a challenge.
Last Thursday morning, Bob and Mike took different routes looking toward the same destination. Bob raised the starting wages in his company by 50 cents an hour, across the board. Mike went to the county jail to get the Help Wanted message out to inmates on the brink of release.
(Hence his reluctance to share his full name and location for publication by Money Examiners.)
Consumer confidence is high, or so we are told by the government. Low unemployment numbers always lead to high consumer confidence. But, this labor shortage is weighing on small businesses such as Mike’s and Bob’s.
According to a major independent business journal, labor availability is the Number One issue for companies who responded to a nationwide survey. That makes four months in a row. This issue outpaces taxes and governmental red tape. This May, 32.6% of small-businesses reported job openings that they couldn’t fill. Twelve percent of these businesses resorted to using temp agencies.
This crunch is felt across the spectrum of industries and workers’ skills. One medium-sized company, this one in Connecticut, has 12 positions available for project managers and engineers. But, the competition with larger companies for the top applicants has proved to be a difficult challenge. If this outfit can’t land good people, quality will suffer. Not long after that, the bottom line will reflect what happened during the hiring process.
We mentioned temp agencies, and they are a last-ditch stop for some of these companies. But temps take time to train, and more time to become good at the job. One employer described it like this:
“There’s so far we can go, and no further, with temporary resources. We really need to hire core people who we trust to deliver quality.”
Our friend Mike just got back from his visit to the county jail. How did it go? Mike is cautiously optimistic.
“They just need to come to work, on time, every day. They have to pay attention and take instruction well. It’s just putting in an honest day’s work, and I will make sure they get an honest day’s pay” he said.
We’re rooting for Mike and the folks to whom he is offering a second chance. We’re rooting for Bob, as well. His small business new hires should enjoy the extra half buck an hour in the direct deposit.
The business of business (especially small business) can be a topsy-turvy world. Long unemployment lines may eventually lead to business entities having a hard time filling positions. That’s how it looks right now. Count on Money Examiners to keep you informed as things change.