Kevin Kane:
Welcome to another First Business Bank Podcast. I'm Kevin Kane and I'll be your host for today's episode on employee recruitment. Our previous podcast, Workforce Challenges for Manufacturers, set the stage by outlining at a higher level some of the dynamics around today's labor market. Today, we'll take a deeper dive into specific strategies to help manufacturers, buck the workforce shortage trend and become an attractive destination for new employees. To help explore this topic, I'm joined by Joe Brown, service line lead for human capital at WMEP Manufacturing Solutions. Joe, please introduce yourself to our listeners and tell us a little bit about your background.
Joe Brown:
Sure, Kevin. Thanks. My name is Joe Brown and I'm the service line lead for human capital at WMEP. I've been in manufacturing now for over 30 years and just extremely happy to be participating in this conversation with you.
Kevin Kane:
Terrific. Well, thank you, Joe. A simple question to get things started: how did we get here? What is the root cause, if you will, behind the current environment?
Joe Brown:
Well, a number of causes have got us here. I'll name four or five. Over the last few years, we've heard about and seen the baby boomer generation leaving the workforce at large numbers. This is primarily due to their surging stock and real estate assets. Additionally, these baby boomers, typically born into a family of four themselves had two or less children, so the pool of younger workers entering the workforce today is being outpaced by retirements. Baby boomers are retiring at a pace we haven't seen ever. In the state of Wisconsin alone, by the year 2030, we'll be short of jobs somewhere between 35 and 40,000 people to fill those jobs.
Joe Brown:
Another demographic that's impacting how we got here today is the Gen Xers. About 34% of them are working part-time or just working as needed. Then you move on to the millennial demographic and they're set to inherit approximately 68 trillion by 2030, thereby them making the decision that maybe they don't need to work because of the inherited wealth that they're getting.
Joe Brown:
Finally, and I think probably one of the most significant effects of what's happened lately or causes, is that there's been a precipitous drop with working mothers in the labor force. The US Census Bureau reported that from January of 2020 through January of 2021, about 1.4 million working mothers that dropped from the workforce. This is on top of the 10 million mothers with school-aged children already not working. To compound matters, the Census Bureau further reported that in the spring of 2021, 3.5 million mothers left active work into paid or unpaid leave of absences, primarily due to the pandemic and childcare and virtual learning, so that's really how we got here today.
Kevin Kane:
As I'm thinking about the shortages that those different factors create, to your point, is the situation in terms of where that labor shortage is occurring, is it any different for manufacturers versus, say, the service sector, or other business sector outside of manufacturing, would you say?
Joe Brown:
Good question. The demographics are the demographics in this case. I think every industry, every market, every sector is experiencing this pressure in regards to how do you find people. They're all really in that mode of how do you win that war for the talent.
Kevin Kane:
It has me thinking of something else as well, which is to your point about working mothers and the fact that they probably, in some respects, bore the brunt of some of the COVID impacts. Is there any sense that as we get through the pandemic around COVID that may draw folks that are on the sideline now back into the market at all because those that need to stay home with children perhaps, or deal with some of those things you described, does that help in any way, from your point of view?
Joe Brown:
Well, I think that as we move forward from here, childcare is one of the primary reasons why. I think that a couple things will happen here in the next year or so, that is that the childcare industry, if you will, will begin to recuperate from being shut down as it was. I think the really great companies are going to be finding and creating their own childcare centers for their working employees because they need these women just as bad and I think that's what the really good companies are going to be doing. Honestly, I'm very familiar with a few of those companies here in this state.
Kevin Kane:
Okay, which that's a great bridge, I would say, then into, okay, the context that you just provided for our listeners around the path that took us to where we're at at the moment. Manufacturing, not really any different, the demographics, as you said, are the demographics. You've just touched on one potential way that companies might be able to help mitigate some of the issues that are driving the challenge. Well, let's build off of that and talk a little bit more about some other strategies or tactics that firms can use to overcome the trend, and as you said, win the battle for talent. Beginning with this idea of employer branding, I've heard that term before. Can you tell us a little bit about what that term "employer-branding," means and why does it matter in the context of trying to draw in new employees?
Joe Brown:
Absolutely. Let me correlate branding from a marketing perspective to branding from an employee perspective. Branding from a marketing perspective is really the pre-applicant state that a company is in. In other words, what kind of benefits and what kind of comp are they going to have for their employees? Branding itself is really that positioning of who you are, or better said, what is your reputation in the community and industry? It's really all about showing a potential future employee who you are as a employer in regards to whether you're family-driven, whether what industry you're in, and what kind of leaders you might have, so branding is really the positioning of who you are, or better said, what is your reputation in the community and the industry?
Kevin Kane:
Just following from one other thing you touched on a second ago, an obvious approach to drawing workers would be pay. I mean, we certainly hear a fair amount about that, whether it's on the news, or maybe in terms of other settings where they're talking, you see stats about how pay is increasing, but beyond the obvious, that you work to increase your base salary or your hourly wage, what are some of the other benefit solutions that might set an employer apart? Based on what you've seen in your own experience, what resonates and what doesn't with respect to that particular path?
Joe Brown:
I think the path that really resonates with employees as they're looking at companies is, what is my career path going to be? What is the work environment like? What is the culture like? I think that within those three areas, obviously comp and benefits are important, but they want to know once they get into the business, how are they going to be treated, and what kind of path do they have for further success?
Kevin Kane:
Okay. Maybe I'm stuck a little bit on the idea of benefits, too, because again, it's a little bit, total comp and benefits, but have you seen any, what I guess maybe I'd describe as more creative benefits, maybe not in the traditional sense of what a benefit is, but something that is offered to workers or employees that is sort of an additional perk or something like that, if that makes any sense?
Joe Brown:
That does make sense. Additional benefits, as the competition has really scaled up here over the last six months to a year, I think one of the primary areas that businesses have been looking at is, "Can I provide more time off early in the process as a benefit?" That has resonated with potential employees.
Joe Brown:
I think another area, too, is the educational side because there are individuals out there that they are interested in furthering their education, but not necessarily at a four-year level. Is there some kind of journeyman or trades within the business that they can get involved with? I think the really good companies are very good campaigning around that if you come in here, we can provide you those skillsets, and a lifelong career.
Kevin Kane:
Okay. To build off of that, meaning we will help train you, you may not have experience in a particular skill, or line of work, but we will help you become competent, whatever that skill might be. That's within the company and the training and the support that comes from that point of view, that sounds like that's really what you're describing, Joe.
Joe Brown:
Exactly. Exactly.
Kevin Kane:
Okay, yeah.
Joe Brown:
Exactly. Really, what the company is interested in is they look at their needs for the future and how they align their jobs with the markets and industries that they either are expanding in, or that they want to make inroads in as a new industry. They're trying to align their workforce with that competency and the way they can do that is by creating their own training center, their own educational track.
Kevin Kane:
Okay, got it. If I could switch gears a little bit, at First Business, we've heard from many of our clients and prospects who are saying they've actually done an okay job getting workers in the door, but after a short period of time, the attrition rate for those new hires can be high. Any thoughts on what manufacturers can do to create a positive experience for employees right from the start so they stay, versus heading out the door weeks or months after their start date?
Joe Brown:
Absolutely. The onboarding process is absolutely critical in this. There are statistics out there that suggest that if there is a proper onboarding of a new employee, and if it's a proper onboarding, I mean, six to 12 months, 87% of them are less likely to leave the company. There's also a statistic out there that suggests that 69% of the employees are likely to stay for three years if, in fact, that onboarding process goes as long as 12 months, so onboarding obviously is key. The first month is absolutely critical because you just don't want to throw the employee out in the floor where they're not acclimated, they're not used to their colleagues, they are not used to the administrative procedures, they are not used to forklifts or equipment going on around them. It's better to go slow than it is to just throw them out there just to get the production that you need.
Kevin Kane:
Okay. That makes sense. Any sort of qualitative aspects around the onboarding process to make a new employee feel welcome or those kind of things in addition to what you just described?
Joe Brown:
Sure. I've been consulting in a company that every Monday, when they bring a group of new employees in, the CEO actually sits down with them for lunch and learns about their backgrounds. He comes out of that meeting, always just extremely energized by the fact that there's interesting individuals coming into the business. I think that when you look at that softer side of the business and how you can touch people as they come in, that goes a long ways in the first two to four weeks. Just the number of touches with leaders from the business is very important. One of the metrics that we look at is that in addition to the CEO on the luncheon is that then does the president and does the middle managers, and then do the supervisors on the floor, are they following up? Are they documenting what they're hearing? Are they basically using that feedback system to feed forward into how they can change and make things better?
Kevin Kane:
Okay. Yeah, I think I'm reflecting on when I joined the bank and how very organized our HR partners were and how you didn't have a lot of downtime. We actually had a very similar opportunity with our CEO where new hires have an hour-plus. It was virtual, but an hour-plus with our CEO, talk a little bit about the history of the company, share some stories. That was a really important way to get started and to feel in quick fashion that you were part of the team, so I can appreciate that that can be a way to early on ensure that you get folks that are engaged and keep them long enough that you've got some stability on that front. Thinking about the HR function, back in a little bit of a different approach, but any thoughts on what companies can do to strengthen the HR function to increase its effectiveness, specifically around recruitment?
Joe Brown:
Absolutely. I think today's HR function is really a strategic function and no longer tactical. I think that there are some activities that they can be doing on the front end. Namely, we want to have very clear job instructions written so that the potential job candidate understands what they're getting into. In today's world, it's a 24/7, 365-day-a-year job. There's always recruiting going on. There's always that, how are you presenting yourself? I think really what one of the main issues, or one of the main things that human resources can do is that when a candidate does walk in, improve their experience all the way around. Make it a relationship-building opportunity. Look at it through the lens of how would that employee fit. Then also look through the lens of as they're going through the onboarding process, that relationship continues to build not only from the human resource, but then it builds into the next functional areas that they're going into, whether it's manufacturing, or quality, or engineering, so it's really about improv that early experience.
Kevin Kane:
Maybe to take it in a little bit of a different direction, too, any tools, or channels, or non-traditional approaches driven by HR to seek talent in a less conventional fashion? I don't know exactly what I'm thinking about there, Joe, but just-
Joe Brown:
Sure. Yeah, absolutely. Absolutely.
Kevin Kane:
... I mean, I'm an old guy, so it's sort of like the ad in the newspaper, or other ways that you let people know that you're seeking talent.
Joe Brown:
Sure.
Kevin Kane:
Any thoughts on that?
Joe Brown:
Oh, absolutely. The internet is just a wonderful tool. Really good marketing firms will use geofencing. What they will do is that they'll look at an area that you are recruiting in, whether you're within the city, or whether you're in the rural areas of Wisconsin, you can basically pinpoint and say, "I want to geofence anybody that's on ESPN," so they're looking at a certain demographic. As soon as that individual gets onto whatever social platform they're looking at, the geofence will identify that, and then they'll pop up the banner of the company that's doing the recruiting. That is one of the tools today that is, I think, predominantly being used by those that are really understanding how to use the social platforms in that.
Joe Brown:
I think another area, too, is that there are recruiting firms that will go out, and this is unlike professional recruiting firms, but there are firms out there that will go out and make telephone calls to individuals who are currently working in companies and asking them if they are willing to look at a different company, and so it's still the fact that there's still this analysis going on in the background, who is employed, and it's really that, how do I find individuals from like industries that I'm in, so you have a better opportunity of attracting them. Then you also, you understand your competitor from the perspective of the benefits and the pay and just the whole compensation side of the business. Those are two areas I think that are being used today by at least the really good companies.
Kevin Kane:
Okay. With that, I tend to maybe think about that as larger companies, but maybe that's a bad assumption. The two examples you just gave, Joe, is that something that's available, whether you're a larger, middle-market company, or a bit smaller? I'm thinking about, again, the challenge from a recruitment point of view, if you're a smaller company and you look at out there and you're up against some larger organizations with more resources, how do you make that work? Yeah.
Joe Brown:
I think that, yeah, obviously, it is just dependent upon the owner of the company, or the way the business is structured, but I think that any company that's five million or above, especially on the five million in revenue a year above, as terms of the geofencing, absolutely. There's absolutely no reason why they can't use that and there are any number of recruiting firms or marketing firms that can help smaller companies do that for reasonable costs.
Kevin Kane:
Okay, so not necessarily at a disadvantage, and there are options out there that, again, to your point for some of the smaller, middle-market companies, that they can certainly make it a level playing field and leverage those options in a way that helps them stay in the game.
Joe Brown:
Mm-hmm (affirmative). Absolutely.
Kevin Kane:
Thinking about, I guess, beyond HR, this idea of how do you create an all-hands-on-deck philosophy when it comes to landing new workers? Everybody in the organization, in some respects, can they help in their own way when it comes to identifying new employees or potential employees, I should say?
Joe Brown:
Sure. I think that the current employees are always your best resource because they know of individuals who are looking for work and then if they are an ambassador of the company they're working with, that definitely goes a long way.
Joe Brown:
There's a number of other ways that the all-hands-on-deck recruiting can go, is that, of course, there's bonus referrals, not only for the employees you hire, but the employees that would give the referral, like an existing employee. I think that one of the areas that companies can be really attractive to future employees is that maybe for the working mother, maybe for that father who is very involved in the family that think outside the box of just your normal three-shift operations, 6:00 to 2:00, 2:00 to 10:00, 10:00 to 6:00, think about it in, what hours are they able to work? Create non-normal hours outside of that normal structure and then have employees work those hours. It might mean a little more complexity within the business on how a product gets scheduled.
Kevin Kane:
Sure.
Joe Brown:
But it's that one attractive area that employees are looking for, that flexibility. Of course, looking at retirees, I'm big on there's always high school students that are looking to make money to go to college, and I think if you can advocate within your own existing workforce to, do you have kids, do you know kids that are looking to make money before they go back to college? Let's have them work part-time, weekends, nights, whatever works for them. I think that's really the all-hands-on-deck-type philosophy that should be used today.
Kevin Kane:
Okay. Yeah, and I think one of the themes that I've picked up on in the last 15 or 20 minutes as we've been talking, Joe, is try to think a little bit differently. Don't be held back by conventional ways of pursuing this and trying to solve for it. With that, we've covered quite a bit of ground here, some really good ideas, so thank you for that. Any other solutions we haven't covered that companies can use to their advantage as they fight through this and try to get the talent that they need to take advantage of? A lot of good demand out there, which is sort of what we hear, "There's plenty of demand. We can sell as much as we can sell if we could only get talent." Any other things or thoughts that we haven't covered so far?
Joe Brown:
I think that we need to be looking beyond just our borders here in Wisconsin. I think that there are a number of communities within the Midwest that are struggling and I think that if you can find the right firm to help you identify those communities, begin to attract new employees into the state from those communities. For instance, again, working at one of the companies I've been consulting with is that they have drawn a number of individuals out of the state of Michigan. What has happened in the state of Michigan is that there have been some businesses due to the pandemic and other unfortunate business events where they might have lost their job and they either have a cousin or a family member or a friend of a friend, or the business actually has been out looking at these different area is here in the Midwest to see, are there communities that they can be drawing from? I think that's kind of new for me to be thinking about that, but I think that's a real opportunity, I think, that might be out there for companies here in the state to be thinking about.
Kevin Kane:
Well, Joe, thank you very much. We appreciate your time today, and the fact that you were able to touch on some very specific things for companies in the state here to consider and options that manufacturers can use to their advantage. With that, the next installment of our podcast series will focus on employee retention because as we've seen, it doesn't really matter how many new workers you're able to bring in if you can't keep the folks you already have and you certainly have touched on that theme in some of your comments and observations around the employee experience and creating that engagement and sense of purpose. To that point, Joe, any quick thoughts as maybe a sneak preview on the topic of employee retention?
Joe Brown:
Oh, that's a great topic, isn't it? How do you keep them once you get them?
Kevin Kane:
Right.
Joe Brown:
Yeah, I don't want to steal the thunder from the next podcast, but I think retention really revolves around leadership and how your leaders are interacting with the employees in the workforce and what model they represent of not only of the business, but with what that employee can expect day in and day out. I think that's going to be key.
Kevin Kane:
Okay. Terrific.
Joe Brown:
Mm-hmm (affirmative), yep.
Kevin Kane:
Well, as we wrap up, I'd like to again thank the WMEP for their support and our partnership and thank our audience members for listening. Be sure to visit us at firstbusiness.bank to explore the other resources we offer business owners and leaders to help them succeed and we invite you to experience the advantage with First Business Bank. Thank you.