Episode 1: What is going on with wages?

Podcast Guests

photo of Leighann Lovely

Leighann Lovely

SITE Staffing, Inc.

photo of Brenna Ratajczyk

Brenna Ratajczyk

SITE Staffing, Inc.

Leighann Lovely 0:05
Welcome to our first edition of HRables: HR in Bite-Sized Pieces. I’m Leighann Lovely with SITE Staffing, and today we will be discussing what the heck is going on with pay rates in the general labor market and semi skilled positions here in the Milwaukee market. I’m really excited for this first edition. I have Brenna Ratajczyk our recruitment manager in our skilled department for our National Avenue office. Brenna comes to us with 10 years of experience working in the industry. Her and her team work in the trenches every day. They have first hand knowledge working with people with various different companies, and they know what drives individuals to take positions and stay at those positions. So Brenna, why don’t you tell us a little bit about yourself?

Brenna Ratajczyk 0:53
Hi Leighann, thanks for having me today. I really appreciate it. As you mentioned, I’ve been in the industry for about 10 years, and I’ve been with SITE Staffing, about eight of those. Worked my way through as a general labor skilled trades recruiter, spent some time doing some on-site management, and now I oversee some of our skilled trades recruiters in our National Avenue office, and I’m really excited to be here today. I’m sure everyone has lots of questions and thoughts about what the market’s like right now, so we should have some good, good stuff to talk about.

Leighann Lovely 1:25
Yeah, definitely. We’ve definitely seen some changes happening over this last year. Which really brings me to my first question for you. Over this last year, you know, well I should start with, at the beginning of 2020, a lot of the conversations that I had with companies, you know, were positions that were starting in the $12, even sometimes $10 pay range. But you know, all of the sudden coming out, towards the end of this last year and the beginning of this year, we’re seeing those same positions, you know, people are demanding at a minimum of $14, $15, sometimes even $16 an hour starting. Why do you think this is?

Brenna Ratajczyk 2:09
Yeah, I think it’s important for people to remember that the the feeling and the need for an increased wage started prior to March 2020 with COVID. I mean, obviously, COVID threw a wrench in some of that information, but I think the the labor pool, the amount of candidates looking for work between 2018-2019 beginning of 2020 continue to get smaller and smaller and smaller. I know we’ll talk about it later on, but unemployment, as you know, went down, and unemployment rates and so there were more jobs than there were people looking for work and so there were more options for people looking for work. So with that balance, the need to have employers to have to stay competitive from a financial standpoint became more and more important. So as you mentioned, companies that used to pay $10 or $11 an hour are starting to find out that the candidate pool that they were drawing from now is looking for $13, $14, $15 an hour and I do feel retail and the fast food industry does play a lot in a general labor market with hiking up the prices. Their national advertising for Target now paying $15 an hour or whatever it might be. Now these smaller mom and pop manufacturing companies are trying to target those same candidates, and they just don’t have the same brand power that a national retail chain store might have. So there’s just, people have many more options, which in return will drive up the need to have to pay more.

Leighann Lovely 3:39
Okay, and that absolutely makes sense, and I understand, you know, you mentioned unemployment here, I understand that it’s easy to demand more money when you know, we have a really low unemployment rate. But right now, we are experiencing, you know, we experienced that during the Great Recession, all of a sudden, we have, you know, unemployment that dramatically dropped. We had an extremely high unemployment rate and so we had a huge increase in pay rates at that point, I think it was like a 3.4% increase at that time and it becomes a supply and demand. So employees are able to, you know, demand more because there are less people to choose from. But that doesn’t seem to be the problem right now. You know, we have a huge number of unemployed people out there. So, you know, what seems to be the problem here, we don’t have a supply demand?

Brenna Ratajczyk 4:40
Right, and I think you know, taking COVID-19 and a pandemic out of it. Looking at the unemployment numbers, you would think it would make more sense but now you throw a wrench in it with the last year with a pandemic and obviously unemployment numbers have gone up. Unfortunately, a lot of people have lost their jobs or companies have closed but I think it’s a few things to remember. Some people were maybe laid off or furloughed with the anticipation of going back to their previous employer. So although right now they may be unemployed, they’re not looking to fill, to go back to a general laborer or semi-skilled position, they’re hoping to get back to the company they were with. Others right now, the biggest one that we’re seeing in our industry comes down to a lot of childcare concerns. So many districts and schools weren’t sure whether they were opening or closing or virtual or not virtual and so many more employees, although maybe on unemployment really aren’t able to work right now. So that has, I think, played a lot into the factors. And then there’s just people that are uncertain, everything keeps changing all the time, whether it’s openings or closings or mandates. Stimulus packages also, I think, play a lot into whether people are, you know, wanting to take this time to be safe at home, and then they just rely on those extra stimulus or unemployment benefits. I think it was really hard for us, during the summer of 2020, when there was the additional unemployment stimulus packages that, you know, candidates were getting, that was, unfortunately to say, it this way, almost encouraging people to stay home and being able to use those additional benefits. We’ve had jobs open this entire time, some may be a little bit less than what they were used to making. But I think definitely looking into all those different factors that the pandemic has brought into play definitely kind of skews what the unemployment numbers actually may be.

Leighann Lovely 6:34
And that definitely makes sense. You know, we look at the unemployment number it’s at a 6.3%. January it dropped, you know, what, .4% points? But you’re right, I’ve heard quite a bit unemployment looks really like a false unemployment number. Whereas, you know, like what you just said, a lot of people were furloughed, looking to go back to those current positions. So, but it’s clear that we’re not going to, you know, be able to hash through all of this in such a short period of time. So do you have any, you know, advice for any of these companies? What should they try to do to really stand out to be able to either attract them to their company, or to retain them to stay at their organization without truly breaking their budgets? You know, is there things that you see in the market that candidates, you know, really want, whether that be benefits or, you know, whatever it might be?

Brenna Ratajczyk 7:28
Yeah, I think what we keep trying to encourage and coach a lot of our customers and clients on are just thinking outside of the box. At the end of the day, you may not be able to change your budgets, and you might have to stay financially within you know, what you’re allotted to spend for your, your staff. But changing the way in which you consider candidates. A lot of companies are thinking outside of the box when it comes to the interview process. Some, some employees maybe don’t have the best resume or the best interview skills, but they try them out for a while because the proof is in the pudding and so they can show up to work every day and have a good attitude, then they spend less time through that entire onboarding process. So financially, you actually can end up saving money doing that. Remembering that although the the actual minimum wage has not changed, what you used to be able to get for $10 or $11 an hour, those same people are expecting now $14 or $15. So you in a sense, almost have to lower your standards some, and work with employees. You know, if they’re having attendance issues because of daycare right now, with COVID, being flexible with that, and understanding that if when they’re at work, they work really hard and working through those and just being flexible with that, once this is all done, knock on wood, and life goes back to what we can consider normal, they’ll be a loyal employee for you then because you worked with them through the hard times, and then they’ll want to hang around longer. We’re also seeing a lot of employees wanting a good work life balance. I think more and more, especially so many employees are able to work from home, not so much in our industry, because they’re out on a manufacturing floor in a warehouse, but people are realizing you know, they’re not wanting to work 60 hours a week anymore. So a lot of our companies have been implementing weekend shifts, or extra shifts, or temporary extra shifts just to try to help give people you know, more of that work life balance. It helps from a health standpoint, and it helps from a sanity standpoint. So even if you can’t implement your PTO, trying to be flexible on their overtime scheduling, otherwise, you burn out your employees and you lose them. So at least if you can be flexible on that end then they don’t walk away and then you can at least retain a good employee. And at the end of the day, as we know working for SITE Staffing, bringing in free food never hurts. It might hurt our waistline but I can tell you throughout the last, well we’ve always fed our employees very well but especially over the last nine months, being able to just you know employees feeling that little bit of extra comfort and appreciation, those, those little things can go a really long way. So just appreciate your employees.

Leighann Lovely 10:07
We feed our employees too well here, sometimes I have to go for a jog on a regular basis because my waistline hurts from that. You made a good point here with burnout. You know, I actually ran a poll on LinkedIn about some of the the things that really are important to employees when making job decisions and you said a lot of different things, PTO, work life balance, you made a lot of really valid points. But I did run a poll, and I will put that up on the screen for you to take a look at. I only listed four choices: profit sharing, extra vacation, sign on bonuses, or attendance bonuses, and then other, and asked for people to you know, type in and share some of their stories or their thoughts on this, and it’s amazing, I mean, extra vacation days was the number one leading on that. And when you talk about burnout, with with companies that are so short handed, they offer extra overtime they offer, sometimes it’s it’s mandatory overtime, and it is so easy to you know, burn out those employees, especially during a time like now. When you’re not only you know, working full time, but then you’re running home and trying to teach your kids because they’re being homeschooled. Some schools, of course have you know, started going back in person, but that is definitely a real thing. So I was interested to see that, extra vacation days looks like it is one of the major drivers and that goes for any, I think any role whether or not you’re a general laborer or a welder or semi-skilled or whatever it might be, up to the CEO of a company. I think that work life balance has become one of the most important things for any employee at any company.

Brenna Ratajczyk 11:59
Yeah, and I agree and I, talking about overtime, it just made me think mandatory overtime, that word mandatory is a little harsh. And I know we have a lot of companies that are trying to get away from doing the mandated overtime. Sometimes, you know, it just it can, having it there for people that have the ability to do it or financially could use the time and a half or the overtime is great, but we really risk that burnout and so being a little bit flexible, you know, maybe you can’t increase someone’s vacation time, but let’s say they needed off this Monday because their kids had an appointment. Instead of having to use an attendance occurrence that day, then maybe they would make it up on the flip side on coming in on a Saturday and that flexibility, because if you’re going to be open for, you know, potential overtime anyways, you know, just trying to see to see to work through that can definitely help your employees feel a little bit more appreciated, and not just a number putting out you know, a certain amount of product.

Leighann Lovely 12:56
That’s a great idea. That’s not something that I that I would have thought of and again, that’s why you’re the expert. So why don’t we talk a little bit about what you and your department and actually asked as a whole as as, as SITE Staffing has going on. Tell us a little bit about some of the positions that you currently have available.

Brenna Ratajczyk 13:19
We would be here all day if I was going to tell you about every single job we’re working on, but we will give it a whirl. So between both of our offices, our National Avenue office, and then our branch out in West Allis, we definitely are very busy. Everything from our general labor department all the way up to our skilled trades and professional and direct hire as well. So we predominantly are looking anywhere in southeastern Wisconsin, so most of our positions are going to be in the Greater Milwaukee area, but obviously we’re seeing an influx towards Menominee Falls, New Berlin, and then as far south as Oak Creek, would be where most of our positions are. We have quite a few companies that are also busline accessible, sometimes those tend to maybe not pay quite as well. It’s also difficult with this great Wisconsin polar vortex we’re going through, the amount of snow and cold weather that we have. But we do have plenty of companies that are also busline accessible. So specifically looking down in the Franklin, Oak Creek area, we work with quite a few highly FDA regulated companies, as well as aerospace. So medical companies, medical assemblers and packagers, we have electrical assemblers. So we have quite a few jobs if you you know are looking for anything on the south side, and then going all the way on the other end of town towards West Bend we have some more administrative and professional positions with collections and customer service. And then all throughout Milwaukee in that Menominee Falls area, New Berlin, we have machine operators carpenters, welders, mechanical assemblers, pretty much you name it, we’ve got it and we can fill it so.

Leighann Lovely 14:58
Excellent. A lot going on, a lot happening. So that’s us off today. So I thank you, Brenna so much for your time and this is Leighann Lovely with HRables. It’s been an enlightening conversation today with Brenna. I thank everybody for tuning in. If you have any comments you would like to share, please visit us SITE Staffing on our LinkedIn page. You can also visit me or like me, or reach out to me on LinkedIn. If you want to just join in the conversation, reach out to us on LinkedIn. If you are looking for a position or you want to apply with SITE Staffing, you can visit our website at www.sitestaffinginc.com. Or if you are a company and you are in need of assistance for some of those open positions, please reach out to us we are here to help. And finally, please tune in next time where we will be talking about unemployment and what to expect in 2021 with some of the changing requirements. Again, I thank you this is Leighann Lovely with SITE Staffing. Have a wonderful day.