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Despite jobs numbers, employers are still working hard to attract, and maintain, their workforces
Thembi Machaba didn’t expect to find a high level of competition for workers as she tried to staff Freshpet Kitchens, the pet food manufacturer in Hanover Township, Northampton County.
“When I first moved to this role, I didn’t ever think that it would be as explosive in terms of labor movement in general,” said the senior vice president for human resources at Freshpet. “I kind of thought it would be a steady flow of traffic in and out, but nothing to the degree that I think I’ve seen and I know I’m not the only one.”
“I speak to my peers in the Lehigh Valley,” she said. “It’s definitely been quite an interesting journey for anybody who’s in HR. Obviously, some of it’s been exaggerated by the pandemic, but the competition that’s coming in the companies that are moving into this area certainly makes it a lot more complex and challenging in terms of trying to retain labor in general.”
It’s a good time to be a worker in the Lehigh Valley. If you’re looking for a new job, or to advance your career, there are companies in the region that want to talk to you.
According to the latest employment statistics, more people are working in the Valley than before the COVID
“...the competition that’s coming in the companies that are moving into this area certainly makes it a lot more complex and challenging in terms of trying to retain labor in general.” —Thembi Machaba, senior vice president of human resources for Freshpet Kitchens
19 pandemic and there are also a large number of job openings. Unemployment rates are lower than in late 2019 or early 2020 and businesses are finding themselves competing even harder for workers.
Nationally, the U.S. Labor Department says job openings were at 10.7 million in June. While it is the lowest number since September, they are still at an historically high level, having never exceeded 8 million in a month prior to a year ago.
Tim McDonough, branch manager for shipping supply company Uline, is looking to hire 125 more workers for the company’s warehouse and 15 customer service workers for its 1.6-millionsquare-foot facility in Upper Macungie Township. He’s confident his company’s perks will help expand its workforce of more than 1,100 in the Valley.
“The competition is as tight as it has been since we’ve competed in this marketplace among the Home Depots, Amazon and others and we can be very competitive in terms of compensation,” said McDonough, who has been with Uline in the Valley since 2004. “Very competitive with the flexible work schedules, very competitive with ability to grow within the organization and develop within the organization. Yeah, we’re happy to be competing in the Lehigh Valley market.”
Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp., said his organization adjusted its marketing strategy toward recruiting individual workers rather than companies.
“We’ve shifted 90% of our marketing now to the attraction of people,” Cunningham said. “It’s away from just being around the tracking companies now. We’re trying to attract talent through marketing of quality of life and what’s going on in the cities and the downtowns and that’s not an immediate fix. But long term having people either migrate from other parts of the U.S. or emigrate from other countries into the market is a key part of how you meet this gap.”
The numbers
According to the state Department
of Labor & Industry, the Allentown-Bethlehem-Easton Metropolitan Statistical Area had 384,900 seasonally adjusted nonfarm jobs in June, compared to just over 380,000 in February 2020. The unemployment rate for the area, which includes Carbon County and Warren County, New Jersey, was 4.3% in June, compared to 4.5% in February 2020.
Broken down, Lehigh County’s unemployment rate was 4.7% and Northampton’s was 4.3% in June. The rates in February 2020, just before the pandemic, were 4.9% and 5%, respectively.
Nationally, the unemployment rate for July was 3.5%, matching the February 2020 number. The U.S. added 528,000 jobs in July, which restored all the jobs lost during the pandemic.
“We’ve had full recovery from what was lost during the pandemic, although the recovery was not equal across all sectors,” Cunningham said. “We’ve got the total number of jobs fully recovered.”
Cunningham said there’s been movement with a combination that includes baby boomers retiring and companies searching for replacements and workers of all generations seeking better opportunities.
“What has been coming for some time in the U.S. is the continued retirement of the baby boomer generation and it’s starting to get into Gen X,” Cunningham said. “So you’ve got to expand job creation with the ongoing retirement of a large population base.
“So that’s where you get the delta of where unemployment is low and companies are still looking for people. Because of that, wages are going up, particularly in the entry level area where you’ve got almost 9% growth of average wages, since before the pandemic, which is pretty significant. So, employers are paying more for particularly entry level talent and service sector and industrial workers. Wages overall have increased about 4.5%.”
Additionally, jobs are being filled in the Lehigh Valley by commuters from neighboring counties, Cunningham said.
Attracting workers
Freshpet’s Machaba said her company has made it a priority to retain the workers it brings in.
“Obviously, we’re growing at accelerated rates and so we try to keep up with our own growth,” she said. “But it’s really hard to do that when people are leaving out the back door. At the end of last year, we certainly recognized that we have to be competitive in terms of our wages, too.”
To retain workers, the company has implemented its Freshpet University program that gives employees a career path to follow. New employees begin at $21 per hour with a chance to rise to $27 after 18 months. It’s a program that CEO Billy Cyr says gives Freshpet higher-skilled workers a good wage rather than lower-skilled employees being paid less. Other perks include shares of company
stock, which Cyr says gives workers a sense of ownership and a chance to build wealth, along with more typical ones such as free refreshments and pet food to take home.
“If we are going to get on top of the retention, we probably are looking for a different type of person than we had historically been recruiting in the past,” Machaba said. “We were kind of pulling in people, we would screen them intensively, but we were really quite comfortable with bringing in your average Joe.
“But now we’re saying, ‘OK, we know that we can’t always compete on wages. We know that we need to increase our wages, we were prepared to pay for a higher level, one to improve productivity.’ But the second part of that would be that these people are growing in their careers and there’s less likelihood that they’re going to just turn around tomorrow and walk out the back door.”
Uline’s McDonough said his company is looking for workers who will stay “hire to retire.” The focus, he says, is to develop, and a team that’s here for “years, years and years.” He points out that his management staff has been around for most of his 22 years at the branch.
Communication is key for retention. Uline has been resuming regular meetings and programs for workers that were curtailed by the pandemic.
“We turn on those weekly meetings with departments, monthly meetings with the warehouse, regular engagement, activities, lunch and learns, things like that,” he said. “Things that maybe other companies don’t do or don’t do as frequently. We turn those switches back on 100% and I think it says, particularly over the last 12 months, that it has served us well.”
Keeping workers
The Society for Human Resource Management recently cited a survey from WTW, a global advisory company, that says employers across the U.S. are continuing to make changes to work and reward programs as they continue to fight for new hires.
The survey found that 66% of respondents have increased hiring activity since the beginning of the year, but 71% are having difficulty attracting and retaining employees with digital skills and 66% can’t keep professional employees. And 61% are having difficulty hiring and keeping hourly employees.
Among U.S. employers, WTW found that about 80% are hiring at the higher end of the salary range and offering signing bonuses. About 65% are using retaining bonuses to keep employees with the vast majority going to managers. A majority are increasing training opportunities.
“Workers are definitely catching up in terms of wages, benefits and things like signing bonuses or tuition reimbursements,” Cunningham said. “The other thing you’re going to continue to see is companies investing a lot more in technology and trying to automate more functions and use fewer people.”
Cunningham said increased use of technology is not just for industrial work.
“People always think that will only happen in an industrial setting, but it also has been an office setting,” Cunningham said. “Banks have minimized back office employment through the use of technology.”
It’s an issue that won’t be going away anytime soon.
“There just aren’t enough numbers in the pipeline,” Cunningham said. “Companies are going to have to find ways to innovate and get some work done with machines or technology, because they’ve reached some point where they’re just not enough workers.