Industry FocusHuman Resources

 

In Nevada’s current, more prosperous economy, human resources (HR) and staffing agencies have been hard at work, trying to fill workforce gaps on both ends of the state. Recently, executives representing this busy industry met at the Las Vegas offices of City National Bank to discuss workforce in Nevada and the solutions they see to the shortages.

Tarah Richardson, editor-in-chief of Nevada Business Magazine served as moderator for the event. The magazine’s monthly roundtables bring together industry leaders to discuss relevant issues and solutions.

How has the workforce shortage impacted Nevada?

Celeste Johnson: In Northern Nevada, the biggest challenge is workforce, or lack thereof. I can not snap my fingers and create 20,000 warehouse workers overnight. I wish I could because manufacturing, warehousing and tech are all landing in the Northern Nevada area and we have a tremendous workforce shortage. Northern Nevada is at 3.2 percent unemployment. It’s lower than the lowest during the peak of ’06 plus three times as many jobs. During the peak we needed 24,000 jobs, now we need 90,000. It’s an incredible struggle and it is effecting every line of business. Every entrepreneur that’s starting out, they can not get talent. It’s an employee market and the trajectory of the demand for the wages is incredible.

Ben Daseler: We have a business services manager in Reno who is really struggling up there to help businesses. They’re coming to him wanting workers and the traffic in our employment offices has dwindled. There’s just no one coming in looking for work. The people that are coming in have some significant barriers to employment. Everyone without a barrier is working. We’re getting that [in Southern Nevada] too. That’s one of the challenges that we have, people seeking work through us now have significant barriers and everyone else is already working.

Connye Harper: What kind of barriers are you seeing?

Daseler: [There are barriers with] child care, poor job history and attitude. It’s the normal barriers, but they’re magnified. People that have some of those barriers but are able to work through them are employed. There are certain ones that [no one wants to] take a chance on and that’s what we’re dealing with now as far as trying to help those people get work.

How big of an issue is finding quality talent?

Robert Daniel: I would say the biggest challenge we have is absolutely in recruiting, whether it’s a warehouse worker, an accounting person, an administrative employee or customer service individual. It’s recruiting in the macro sense. That’s the biggest hurdle we’re facing right now.

Jason Bruckman: The biggest challenge we face has been the competition for talent. Not just the competition for talent but matching up the expectations that employers have, particularly in the manufacturing/distribution space with the way the market is. It’s becoming more rigorous in terms of processes ahead of time. For a space where sometimes the average pay is in between $10 and $13 an hour there’s a lot that goes into pre-employment. There’s testing, drug testing and background checks and there’s a specific skill set that companies are looking for. In this market, where it’s very difficult to find candidates, sometimes those expectations aren’t in line with pay rates. That’s something that has been a challenge and we’ve had to come up with creative solutions to combat that.

What is being done to correct the workforce shortage?

Daseler: We’re getting together all the agencies and focusing on getting the public workforce system and business services [together to] better serve businesses [and provide] training and all that kind of stuff. We’ve brought in a consultant and we’re meeting [about this]. That’s something on the horizon.

Johnson: We have a couple of big companies in Northern Nevada that have made big investments, like Switch. They’re spending a lot of money and putting a lot of money into the community college. [The community colleges are] really trying to promote skilled trades and move the mindset away from the idea that a Bachelor degree is what’s needed to be successful. We’re starting to see those investments. The private sector, Switch, Tesla, Panasonic, has made some good investments. We need the community colleges to get these kids through. Sadly our high school system in Northern Nevada has eliminated a lot of those [skilled trade] programs. But, I’m hopeful. I’m hearing conversations [about this] so I think it’s starting. We’re a couple of years behind, that’s the problem.

Laura Nowlan: I’m finding great talent in California. I think we’re going to be pulling [employees] out from other states. I know that’s what I’m doing.

Bruckman: Yes, we’re pulling from other states. Also, the long-term solution is the education system here in Nevada. There have been a lot of investments made in the education system. What’s nice about the community here is, everyone comes together and realizes the issue that we have in front of us. We’re trying to put solutions together to make us competitive in the education space. Certainly, we recruit from California as well and that’s the low hanging fruit for some of those employees to fill jobs today. But, long-term it has to be education and having that focus.

Bill Rosado: I attended a seminar regarding real estate [with] Brian Gordon from Applied Analysis. He talked about the number of people coming to our state, they measure it with [drivers] licenses. It’s a net of 4,000 people a month. A lot of those people are coming from California. We’re competing for talent because the unemployment rates are low but, at the same time, there’s a lot of people coming here. Las Vegas right now is number one in everything that he was able to show from growth and wages to property values to cost of living. We’re an attractive market for people to move to.

How do you retain good employees?

Andy Pasbakhsh: Our focus is the entire life cycle of an employee, from finding them to hiring them and then retaining them. Benefits [are important], like 401k, simple IRAs and just being able to offer small businesses and large businesses the same perks. Before only larger employers could offer some of the perks. Making sure your employees are happy I think is the most important thing.

Bruckman: Absolutely. Employee engagement is huge. It’s more important today than ever before. When companies look to move to Las Vegas they talk about pay but really pay isn’t the most important factor. It’s becoming more and more competitive. What else are you going to do? Everyone is paying $15 an hour for that role, what else can you do to retain employees? In this market more employees are leaving than ever in our company’s history, a statistic that came out four or five months ago. Perks and flexibility, is huge, especially with the millennial generation. [Companies should look at letting employees] work from home, have flex hours and then engage employees as they work together, so they’re happy when they come to work. Do they enjoy coming to work and enjoy their job? They’re going to have other offers at all times and companies are going to be reaching out to them, they’re getting calls from recruiters. We’re aggressively pursuing candidates at all times and calling. What’s going to keep that employee besides pay?

Daseler: Recruiting young people for state government is a challenge for those factors. We don’t have a lot of flexibility on work hours. Most agencies are Monday through Friday, 8 to 5 and the younger generation, they don’t want to do that. They want more flexibility. They want to be able to work from home. In state government we struggle with recruitment.

Daniel: It really boils down to fitting that organization’s culture. It’s not only pay, it’s benefits; are you going to be flexible with me? Am I going to be able to get time off if my wife has a child? Smart companies are the ones that are looking at that and [determining] the appropriate culture that’s going to encourage employees to stay because it really is a mutual decision. It’s the client saying, “Yep, you fit our culture.” And the employee saying, “Yep, I want to work here for all these reasons.”

Johnson: One of the things I’ve struggled with is the internal pressure for your employees and the wage pressure. What we’re learning is a good solution is variable comp. [Businesses shouldn’t] only have a defined comp structure for employees. For most industries, one of the biggest line items is payroll. We don’t know what the market is going to do in a couple years and we may face some layoffs. But, if you can be at a similar level as your competitors and then create the rest of their comps through variable performance metrics, you’re going to have stronger retention. You’re going to keep your key performers because they’re going to make more and you’re going to flush out your bad people. That’s something companies can do quickly now to retain talent.

Nowlan: Culture is key. I pay [employees] a lot less; we’re still very new. What’s helped us retain our internal team is the culture. Our foundation is Christ and so the people internally that work for us, they know that we’re part of a bigger picture. We’re not just a regular staffing company, we actually use this to minister. So, it’s a little bit different than the comparison to another staffing company. I used to make a lot more working for a staffing company internally than I do now, even as an owner.

Johnson: You’ve hit on something and that is: What is your differentiator? If you know what it is and it’s a part of your value system, you can recruit to that and that’s pretty cool.

What regulatory changes should we expect?

Nowlan: Minimum wage is going to go up, it’s going to be going to $9.25 an hour and then, in 2023 or so it should be at like $13 an hour. I agree that minimum wage does need to increase, but I just hate for our state to go into the same position that California is in. People are leaving because of issues like minimum wage. They’ve increased it so high that even the companies are moving. We have to be very careful. We do have to address minimum wage being so low but, at the same time, we have to be very careful and do it very strategically so we do not follow the same path as California. The other one to watch is the marijuana issue.

How has marijuana changed this industry?

Nowlan: I opposed it from day one. It’s a hazard for anyone in the manufacturing industry. We drug test and out of every five that we test, four fail and one passes. I’m drug testing clear across the board, all the way through. I’m losing a lot of great talent because they’re not passing the drug test. At the same time I’m not willing to take the risk and have the liability of someone getting injured because I failed to do a drug test or I made an exception for someone.

Daniel: We simply have a zero tolerance policy even though it’s legal in the state of Nevada, our policy is zero tolerance. We talk about that from the onset, it doesn’t make a difference to us whether or not you have a physician’s notice or anything like that, it’s zero tolerance. The clients that we deal with appreciate that because if you take it and fail it, it doesn’t make a difference to us, we just don’t condone it, period.

Dreana Resler: If you do have somebody who medically does need to have marijuana, then are you now discriminating against not hiring somebody because of a medical disability?

Daniel: What we are hearing from our attorneys is a lot of it depends on what is acceptable to our ultimate client, the end user. If we have an individual that had all of the great skills and experience that Client A was looking for and they’ve got a physicians note that they can smoke marijuana, we would have a discussion with the client. If they [want to hire them], then we have them acknowledge and sign some things that relieves us from any liability and things like that. That’s the way we handle it.

Bruckman: Ultimately, with federal law, it’s still illegal. In terms of the medical side of it, it’s still not federally recognized in that regard. Different organizations take a different approach, but ultimately the blanket is the federal law.

Rosado: We would all agree that we don’t want anybody under the influence of alcohol on the job. The problem with alcohol is that there’s not a medicinal reason for alcohol use. Now you have marijuana that has a medical use. So, you can still have a zero tolerance. In HR we talk about the interactive process. If somebody [on my staff] had a medical reason to use marijuana we would have to engage in the interactive process. I’m not sure how we would do in an office environment turning somebody down. It’s going to be challenging. Now in other businesses, whether you’re working in a warehouse, driving a truck, there’s zero tolerance. The key here is that we all go through the interactive process when we’re faced with that situation to determine what is the best course of action and enforce it equally among everybody.

Johnson: We’re talking almost about two issues. We’re talking about impairment at work, which is what the zero tolerance is falling under, versus a workforce engaging in a legal activity for recreation. We also know not all marijuana has an impairment. What’s interesting is, I’m seeing with clients, especially on the PEO (professional employer organizations) side is, they’re being a lot more receptive to positive marijuana tests than they were a couple of years ago. Is that because it’s now legal in Nevada, is that because there’s such a workforce shortage or is it both? I don’t know. But, when it’s up to our clients to decide, I have a lot of clients that have changed their drug testing policies.

Harper: The other thing that differentiates marijuana from alcohol is that there is no scientific data the correlates the percentage of marijuana of your system with impairment, unlike with alcohol. That makes it even more challenging. And then marijuana does stay in your system longer than alcohol and that’s another factor that can make it complicated. It’s not an easy row to hoe.

What’s on the horizon for your industry?

Rosado: Finding the balance between technology and hands-on work [will be important]. We should take advantage of technology that helps workflows. It’s more than payroll now, it’s managing the life cycle of the employee. The bigger the client is, the more workflows they have to manage. The more that we can automate that, the better. But, then there still needs to be a certain level of touch. Those are my thoughts about where our industry is going. All of us have many different levels of service and there’s plenty of business out there for all of us.

Pasbakhsh: That’s a good point. Technology all sounds nice and dandy but sometimes getting the business owners to actually use the technology and letting it work is pretty hard. Sometimes you need to do some hand holding.

Johnson: A year from now it will be very interesting to see what the economy does. I am starting to hear about some little slowdowns. Housing has slowed down a little bit in Northern Nevada. We’re starting to see some minor indicators. Certainly for staffing companies that means it loosens up the workforce a little bit, slows down the wages. That’s probably good for us. Beyond that is, where are we headed with AI and technology? In staffing, are we worried about jobs becoming more and more automated? There’s always going to be jobs that need intuition and decision making. Those industries will continue to need recruiters and staffing companies and HR companies.

Daniel: I’m beginning to see, what you’re saying. I have some large clients we do business with that have already pushed off some hiring. I am seeing housing slow down. I’m seeing an uptick in activity where people are beginning to look for work. I think a year from now the economy will be a little bit slower, based on everything I’m seeing and hearing right now. But, quite honestly that affords all of us a greater opportunity when that happens because the work still has to get done. Some of the best years are when there’s a slowdown. I’m beginning to see all that.