Spokane Journal of Business

Labor here is in short supply

Businesses have trouble finding help; in November, 9,500 more people had jobs

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As Spokane Countys unemployment rate has slipped lower and lower, the available work force here, which has been touted for years as plentiful, isnt so abundant any more.

Both companies with large hiring needs and temporary-help agencies are struggling to find people to fill positions. Employers sometimes must settle for workers who dont meet all the qualifications for particular jobs. Other employers must sweeten wages or benefits to draw applicants.

You have to be really creative to attract workers, says Colleen Connors, human resources director at Telect Inc., of Spokane, which added 100 employees here in 1997 and could add up to that many more in 1998.

On the flip side, Spokane workers have more jobs to choose from than in recent years and may benefit from wage increases or opportunities for promotions given to retain workers. Also, although the tight labor market might be problematic for individual employers, higher wages can help boost the communitys economy as a whole.

We may be able to raise the average income per household, says Washington Water Power Co. economist Randy Barcus. That has been a prime goal of economic-development organizations here.

Officials who recruit employers to the area and push in other ways for new job creation add that even with low unemployment, theres still plenty of room to add good-paying jobs in Spokane.

Our problem is underemployment, says Janelle Fallan, whos helping administer the Focus 21 economic-development effort here. It means we have a lot of people who could be working at better jobs. The unemployment figure doesnt reveal that.

Furthermore, low unemployment here affects a much larger area than Spokane County, contends Ken Olson, vice president of the Spokane Area Economic Development Council. People from rural areas where unemployment is higher will move to Spokane or commute here to get a job, he says.

The tight labor market has an added facet. Its boosting consumer confidence, which leads to increased consumer buying of goods and services, WWPs Barcus says. Thats good for the economy.3,000 fewer in unemployed ranksThe numbers are striking. The most recent preliminary figures available from the state Employment Security Department put the Spokane metropolitan areas unemployment rate at 4 percent in November, compared with 5.6 percent a year earlier. Just 8,300 people were listed as out of work here in November, compared with 11,300 in November 1996. The unemployment rate here, after averaging 5.8 percent in 1996, had hovered at about 4 percent for six months.

The number of people who have jobs has grown markedly with some 201,200 people employed here in Novembera hefty 5 percent more than the 191,700 who were working in November 1996.

Bernie Brady, human resources manager at Johnson Matthey Electronics Inc., of Spokane, knows firsthand the challenges of finding workers in such a pinched environment. Johnson Matthey, which ramped up a second plant here in Cheney in 1997, hired 1,200 people over the last eight months or sopushing its total Spokane-area work force to 1,700.

The company plans to add at least 200 more workers during 1998, and perhaps many more than that depending on demand for its products, Brady says.

The companys attractive wages and benefits enabled it to find workers quickly, he says, adding that Johnson Matthey tries to stay competitive with such Spokane employers as Kaiser Aluminum & Chemical Corp. and WWP.

Johnson Matthey has begun using the Internet to post openings and held a job fair to interest potential recruits. It uses temporary workers extensivelyBrady says that about 40 percent of its work force is made up of tempsand has been making offers for permanent positions to its temporary workers on a daily basis.

Certain kinds of workers are especially hard to find. Technically skilled people and engineers are in high demand and short supply these days, say Johnson Matthey, Telect, and Spokanes Packet Engines Inc., the maker of super-fast computer networking technology

The technical labor pool has been tight for some time, says Bernard Daines, Packets president and CEO. We have to be competitive with companies in places like the technology-rich Silicon Valley.

Julie Prafke, president and CEO of Humanix Personnel Services, of Spokane, says that because of the lower availability of potential hirees, many companies here have been turning to temporary agencies to help find workers.

We find more and more companies are asking us to find that ultimate employee. They cant necessarily find that person on their own.

As demand for temps rises, however, its also becoming more difficult for temp agencies to find people willing to accept short-term positions, shes found.

You have to offer better benefits and better pay to attract people for temporary work these days, Prafke says. Humanix has instituted sign-on bonuses for new temp workers and referral bonuses to temps who refer friends or relatives to the agency.

Prafke tells employers they may have to settle for a worker who doesnt have all of the skills they desire. You need to identify the critical skills, she says.

In addition, she recommends that employers do what they can to hang on to good employees. I think it is going to get tighter and tighter, she says.Labor savingsTelect has had to turn to personnel search firms to find workers, has stepped up promotion of available positions on its Internet home page, and has paved the way for applicants to apply. Applicants can fill out a computerized resume form on the companys home page and ship it in electronically, eliminating some of the hassles of looking for work.

Also, Telect has lowered its expectations for some new hiresand is searching for people who are real trainable rather than applicants who have all of the skills Telect needs, says Connors, the companys human resources director. Beyond that, Telect is investing in the employees it has and is looking for ways to improve their productivity.

Were looking internally and promoting within. Were instituting more training programs within for our employees, Connors says. The company also is continually looking at new equipment that could help increase productivity.

WWPs Barcus contends that Telects strategy to improve productivity and find labor savings is right on today. He says that the low interest rates of the last several months can make investments in labor-saving equipment very attractive.

Credit is plentiful, interest rates are low, and technology is available. Im one of those people who looks at the technology revolution were in. The opportunity to significantly increase productivity of workers is happening. So, employers may be able to raise wages without losing money.

In a period of low unemployment, hiring more people might not be the right course, while implementing changes to improve productivity can help a business be more competitive down the road, Barcus says. He maintains that without the prevailing low interest rates, available credit, and new technology, the economy could head into a recession if the labor shortage becomes serious enough.

The economy always tries to stabilize itself, he says. But as a business owner, you cant wait until that happens. Besides, he adds, a recession is not the medicine I would prescribe.

Barcus also notes that labor shortages here arent anything new, although the countys unemployment rate might not always have been indicative of that. In years past, unemployment sometimes was relatively highbecause of periodic influxes of laid-off woods workers or minersbut those people often didnt have the skills that companies needed. So, labor shortages occurred because of a mismatch of skills, he says.Retaining workersJeannine Marx, owner of JM Recruiting, of Spokane, says the trick for Spokane employers is to hang on to key employees. That means they may have to match salaries paid here by companies such as Hewlett-Packard Co., the Principal Financial Group, Olsy North America Inc., and Packet Engines.

Local companies will lose people to companies that pay national wages. Its not the mentality in this area to job hop, mostly because it hasnt been an option. Once a company has lost enough critical people, maybe theyll get the hint, she says. She adds that shes helped several job candidates defect from one company to another recently to get better compensation, although sometimes that can come in the form of more flexibility rather than a fatter paycheck.

Marx suggests that employers consider allowing telecommuting and flex-time hours to keep and attract workers.

On the other hand, Marx says employees should understand that employers are going to start expecting different things from their workers in return.

Companies are looking at, What is the value you are offering me? Were going back to the Renaissance mansomeone with lots and lots of skills, she says. The most marketable people will be those who can hit the ground running in new positions.

Marx says shifts in what employers and employees expect will remain. Its inevitable, its here, and its reality.

  • Marlene Mehlhaff

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