Labor shortage inspires creative thinking in midstate market

The midstate economy faces a crisis that experts say is certain to get worse before it gets better.

And it has nothing to do with mortgage rates, investment capital, taxes or any of those important things. It's not inflation or recession that has business owners concerned.

The issue is labor — specifically, finding enough labor to unleash the potential economic boom on the midstate.

“We haven't seen the worst of it yet,” said Darrell Auterson, president and CEO of the York County Economic Alliance. “We've had a number of the baby boomers moving out of the workforce, and there's going to be more of them moving out of the workforce in the next 10 to 15 years.”

In the latest seasonally adjusted unemployment rates, released March 31, all midstate metropolitan statistical areas (MSAs) were well below state and national unemployment rates of 5.3 and 5.5 percent, respectively.

The Lancaster MSA ranked second in the state with a 4.1 percent unemployment rate, while Harrisburg-Carlisle was tied for third at 4.3 percent.

What is more disturbing, officials say, is state Department of Labor and Industry data showing significantly more job openings than people claiming to be unemployed. Some models show just 0.4 workers per available job in southcentral Pennsylvania.

Department of Labor officials recognize that the aggregate job openings data could be unreliable, a spokeswoman for the department said. For example, some employers perpetually advertise to keep a steady flow of candidates, although they might not have actual openings.

The need for employees is across the board, from laborers to doctors. Truck drivers, nurses, retail sales people, computer programmers, surgeons and customer service representatives are the top advertised job openings.

“It's an employees' market,” said Gregg Monteleone, executive vice president/director of business development for The Performance Group, an employment agency. “We're seeing customers who want to negotiate, and the employee will have two or three job offers.”

Quality of life

Communities across the region are adopting an it-takes-a-village approach to solving the labor riddle. In York, the YCEA is adapting York's Creativity Unleashed campaign to sell young professionals on the county's quality-of-life offerings.

The Harrisburg Regional Chamber and Capital Region Economic Development Corp. has kicked off a new campaign called “Live the Life You Want.”

Linda Goldstein, CREDC's vice president and chief operating officer, said the troubling job numbers forced the agency to think long term and outside the box to improve labor availability.

“The first question that (employers) always ask ... is 'Tell me about the availability in your workforce,'” Goldstein said. “It's not a great answer to say 'Well, we only have 0.4 workers per job.'”

CREDC put together a panel that included representatives from major midstate employers such as Ahold USA, Highmark and Capital Blue Cross. From those discussions came the Live the Life You Want website, complete with local data about housing, schools, cost of living, cultural highlights and more.

The site launched last month with two goals, Goldstein said: to attract people to the region and to retain young people already living here.

The project provides “a convenient clearinghouse of information highlighting all of the terrific advantages of living and working in the Capital Area,” said Tracy Pawelski, vice president of external communications at Ahold USA, who served on the panel. “We've got it all here. We just need to communicate our assets more effectively.”

Market movement

Nationally, McDonald's, Wal-Mart and Target all announced pay raises in recent weeks. While some Harrisburg lawmakers are pushing for a minimum wage boost, a long-term scarcity of quality employees could raise wages naturally.

“I think one of the outcomes, undoubtedly, will be the slow rise of wages,” Auterson said. “I think it's inevitable. It has to happen.”

Monteleone is seeing it happen already, with manufacturing and warehouse clients raising wages. The problem is that adding $1 an hour to a temporary, $11-an-hour warehouse job still isn't enough to entice potential employees to relocate, he said, or even to drive more than a half-hour.

“Some of our companies are realizing they're going to have to go permanent hire instead of temporary,” he said, “and fill in the gaps with temp workers to get through the peaks and valleys.”

The Performance Group is having success with creative recruitment ideas, Monteleone said, such as billboards and partnering with churches and nonprofits. The company even sponsored a race car in Hanover.

More of that kind of creative thinking will be needed in the future, Auterson said. The midstate is growing rapidly and will need to sell itself in order to attract the kind of talent needed to fill jobs in all employment sectors, he said.

“More and more of our population are interested in that work/life balance,” he said. “If you don't have at least an acceptable level of a standard of living in your area, it's going to make it harder to attract and retain talent.”

Source: Central Business Journal