Across much of the country, restaurants, stores, construction firms and more are having a hard time getting and staying fully staffed. At mom-and-pop shops to Fortune 500 companies, a dearth of available and attractive employees is hitting hard. The same is true in the River Region. And while the issue is disrupting the delivery of goods and services to consumers and tanking bottom lines for affected businesses (thanks to delayed or canceled expansions and lost revenue), the problem extends beyond the present.
Like any labor shortage, the current one could impact future growth and prosperity, as Dr. Keivan Deravi, President of Economics Research Services, Inc., explained, noting that labor is fully 50 percent of the equation for success in any economy. “All economic development, all work, requires two things: capital and labor,” he said. “So, if you don’t have labor—the workers and people—then you are missing one of two essential requirements for continued progress. Without the workforce, economic development won’t happen.”
How We Got Here
The COVID-19 pandemic and resulting shutdowns in 2020 put many out of work, but even as restrictions have lifted, the economy recovers, businesses everywhere are hiring and re-hiring and unemployment financial assistance programs have ended, there’s still a sizable chunk of the workforce not returning to work. The tourism and hospitality industry, which, nationwide, lost more than 3 million jobs at the height of pandemic shutdowns, is facing this. One reason continues to be concern about COVID safety issues, according to a University of Central Florida study released in late 2021, but a second issue named in the study was the fact that after being laid off, these workers simply found better jobs with higher wages and benefits. A skills-gap plagued manufacturing pre-pandemic, but COVID exacerbated it. And in the healthcare industry, workers are worn out.
Gindi Prutzman, Executive Director of Central AlabamaWorks, listed a few of the challenges her organization is seeing and stressed the need to not only bring new employees in but to hold onto existing workers. “We continue to see employee burnout impacting our region. Particularly in the areas of healthcare and education, employees have worked through a pandemic, often having to ‘weather the storm’ from the impact of the labor shortage,” she said. “Businesses are having to analyze ways in which they can reward and retain employees with strategies other than wage increases.”
The Issues Today
Ed Castile, Director of Alabama Industrial Development Training, listed a few factors affecting our workforce that must be addressed. “We cannot point to any one thing by itself across the area, but it’s more several things in combination,” he said. “Lack of childcare, continuing federal assistance, the availability of transportation, lack of skills, etc.”
On the childcare issue, Castile elaborated, stressing that it’s not just limited space in childcare programs but also the price of childcare that’s becoming a major obstacle. “Many daycares closed during COVID, and pre-COVID they were already limited and expensive,” he said. “Now that many are going back to work and needing day care, they cannot find it, and/or the costs have sky-rocketed.”
A problem in people moving from point A to point B is plaguing the workforce too. “The issue here is dependable and consistent transportation,” he said. “Many potential workers who want to work in some areas of our state have no public transportation and cannot always depend on a relative or friend to get them to the job. Calling an Uber in rural Alabama is simply not possible.”
And despite some progress made in recent years, according to Castile, a remaining hurdle must be overcome: bridging the divide in skills that the workforce has and those that employees most want. “The lack-of-skills issues have been growing for a number of years,” he said. “As technology changes rapidly, and new job opportunities are added, then less and less people have the needed skills.”
The Solutions for a Better Tomorrow
As they have been for years, both Central AlabamaWorks and AIDT continue to partner with appropriate organizations and agencies to assist in meeting these needs. “We take the training to them or near them so they have no barriers,” Castile said. “We have also sped up the timeline to get applicants through training and on the job quicker.”
On childcare, Castile admitted an easy fix is not obvious. “I’m not sure what solutions there are other than assisting day cares to go back in business,” he said. And while a lack of daycare is adding to the labor shortage, the labor shortage is keeping daycare options thin. “Within the daycare business, they are struggling to find employees, just as many businesses are struggling,” Castile said. “Obviously, daycare workers must be trustworthy and good people.” He suggested that paying daycare workers a “living wage” could help attract quality workers. “All of us want our children to be safe while we are at work,” he said.
Castile also shared thoughts on the transportation problem. “There are transportation vendors that may be tapped to assist, and we are working on this idea with several of them,” he said. This assistance could include helping get workers from home to training and/or their job using ride share services and offsetting costs through their employer or through state service providers or agencies. “We are still trying to figure it out,” Castile said.
When it comes to increasing our skilled workforce, creating the right training and making it accessible are solutions both AIDT and Central AlabamaWorks have been tackling head-on for years. “Many programs within K-12, two-year colleges and even universities are available to assist here,” Castile said. “State and federal dollars are available within the state to help pay for additional training. The Alabama Career Center System in place and managed by the Alabama Department of Labor is a good resource for individuals to seek assistance. Citizens can go online to AlabamaWorks.com to look for job and training opportunities. There are many programs at varying levels of need available.”
Prutzman highlighted what Central AlabamaWorks is doing in this arena. “Businesses have been steadily increasing wages and looking for innovative ways to recruit and maintain employees,” she said. “We are working with our business partners to get the message out that the industry doesn’t look like it used to. Many businesses are willing to train employees, requiring little to no previous work experience.” In addition, the organization’s Regional Workforce Councils, along with its education partners, are pushing to increase awareness of not only available careers but also the pathways to reach them while also creating ways to give students hands-on experience prior to graduation.
Q&A with Rheem Manufacturing: Here at Home
Rheem Manufacturing is one of the local companies dealing with the current labor shortage, and an available workforce stays at the top of its priority list as it continues to experience growth. Sheral Ware, Senior Human Resource Manager at Rheem Water Heating in Montgomery, commented on what the company is doing to combat the issue.
MBJ: Is Rheem experiencing any problems due to current labor shortages?
Yes, however, Rheem has a long history in Alabama with 50-plus years in Montgomery. Our businesses (Rheem in Montgomery and HTPG in Scottsboro) are growing, and we need to support that growth. Like many employers in Alabama, we are looking to hire new team members and build our skilled labor force.
MBJ: How is Rheem managing the issue?
We have been collaborating with partners across the state on workforce development and recruiting in the regions in which we are located. In terms of solutions we are:
- Connecting with economic development authorities, local community colleges and schools, Chamber of Commerce, etc., on workforce development initiatives
- Working with state-funded groups that offer grant/training opportunities including Alabama Industrial Development and Training (A.I.D.T.), Alabama Works and FAME USA (Trenholm State College)
- Collaborating with ASHRAE at Auburn to recruit grad students
- Reaching new candidates via social media campaigns designed to show open positions and extensive benefits
- Conducting job fairs
Additionally, we are a premier employer and continue to enhance our benefits to attract new team members (competitive wages, sign-on bonus, referral bonus, health insurance, vacation days, on-site clinic and other perks).
MBJ: Is the company experiencing any other workforce-related issues?
There is tremendous opportunity and career development in the world of manufacturing. Rheem continues to experience positive growth, and as such, we must add new team members (in areas including manufacturing, call centers and engineering) to support both local and national strategic initiative investments.
Alabama’s Employment Service:
Alabama’s network of 52 One-Stop Career Centers and satellites are strategically located throughout the state. Job search and development, occupational and educational training, vocational rehabilitation, veterans’ services and unemployment insurance information are offered. Employers work with local centers to locate employees with specific skills, and the goal is to consolidate the delivery of services at a single location.