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Future Labor Shortage
Poses Problems For Industry

Want to know the justifications for the PMA Education Foundation? Look to Iowa! When the foundation launched, Pundit sister publication, PRODUCE BUSINESS, ran a series of columns explaining the rationale of the foundation:

May You Live In Interesting Times

Workplace Disconnects

Finding — And Keeping — Talent

Early Exposure Breeds Success

Supporting The Foundation

This piece from The New York Times, As Iowa Job Surplus Grows, Workers Call the Shots, seemed an important early warning of what may lie ahead for the industry:

…As rising unemployment and layoffs beset workers around the country, Iowa faces a different problem: a surplus of jobs. Or to put it another way: a shortage of workers. A survey of companies by Iowa Workforce Development, a state agency, found as many as 48,000 job vacancies, in industries including financial services — Des Moines trails only Hartford as the nation’s insurance capital — health care and skilled manufacturing. One estimate projects the job surplus to reach 198,000 by 2014, with vacancies increasingly in professional positions. Greater Des Moines alone faces a shortfall of 60,000 workers in the next decade.

The state provides a small, advance view of what some economists predict will be a broader shortage of skilled workers in the next 20 or 30 years, as tens of millions of baby boomers retire from the workplace, and the economy produces more new jobs than workers. Potential consequences include slower economic growth and competitiveness, as well as higher wages for skilled workers and greater inequality.

Estimates of the national shortage run as high as 14 million skilled workers by 2020, according to widely cited projections by the labor economists Anthony P. Carnevale and Donna M. Desrochers….

Of course, industry efforts to recruit and retain people in our industry can help. The industry, collectively, however, cannot do any better than the sum total of how the individual companies fare.

So the challenges of attracting and retaining talent, and the changing expectations that tight labor markets bring, are going to be very much issues that individual firms have to face:

…For workers like Brando Guerrero, 25, a sales analyst at Nationwide Insurance in Des Moines, the jobs shortage means companies “have to sell themselves to potential employees, because there are so many opportunities here.”

“Do they have a free gym, dry cleaning, Starbucks on site?” he said. “What are they doing to make the community better? And once you’re there, companies know they have to promote you to keep you. We’re a little spoiled in our opportunities here.”…

It will certainly take effort:

…he said it was difficult to hire people for advanced technical positions. “I plan a certain amount of my time during the week, 5 to 10 hours, recruiting. You’ve got to work at it. They’re not just going to come to you.”

Like many executives here, he has adopted programs to lure recent retirees back to work part time.

To retain staff, he provides stock options, flex time and short Fridays in the summer. And he has had to be flexible on salary. “People who have a real marketable skill, they know they can call their shots,” he said….

Much of the issue is expected to revolve not around a shortage of people, but a shortage of people with the appropriate skills:

…Several companies are starting to reach into the high schools, identifying students and promising to pay their community college costs, with the guarantee of a job after graduation. Others are looking to the prison system. Forty employers recently participated in a job fair for about 300 inmates in the downtown convention center.

The community college system is at the center of many efforts to address the jobs surplus. The state and private employers like Wells Fargo and Principal Financial, which are both based in Des Moines, have made $23 million available for students to take courses to prepare them for specific jobs, with promises at the end of tuition reimbursement and positions starting at $30,000 to $40,000 for graduates with a two-year degree.

But programs for the jobs in highest demand, including nurses and welders, have long waiting lists. “Employers come to us, asking, ‘Do you have any graduates coming up in this field?’ ” said Scott Ocken, dean of industry and technology. “A lot of times we have to say, ‘We do, but they’re already hired.’ ”

Robert Anderson, executive chef at the college’s culinary institute, said he had two or three job offers for every student…

With a family business on the Hunts Point market, we saw the dilemma first hand. If you thought of the product and the industry, wholesale markets should always be night markets, but it is hard to staff a night market with good people.

For a time the difficult working conditions, high stress and marginal location led the children of many of the wholesalers to go into medicine, law, engineering, teaching, etc. The future was uncertain.

Yet, in time, many of those same children drifted back into the business. Mostly, it was because they couldn’t make the same income, even as a professional, that they could make back in the produce industry.

Industry efforts can help by raising the saliency of the concept of working in the industry, and various company efforts to make working in the industry more pleasant can help. We wonder if the PMAEF shouldn’t look at these community college programs as some kind of direct link — if you finish this program and work for the industry X years, we will reimburse you — might be more effective than simple recruiting.

In any case, all these initiatives should not be underrated. Bryan Silbermann, President of the Produce Marketing Association, and the Pundit had an exchange in PRODUCE BUSINESS when PMA came out with its report, Truck Transportation Best Practices for the Produce Industry. Most of the report dealt with issues such as being polite and considerate as prerequisites for making the produce industry the customer of choice for truckers.

But whatever efforts the industry may launch and however much having a gym on the premises may appeal, we have to believe that substantial shortages in qualified labor will ultimately result in substantial increases in wages and benefits for employees. The challenge to get labor will be real. Figuring out how to pay for it is likely to be an even more difficult problem for the industry and the companies that compose it.

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