Salaries and perks may get a modest bump in 2019 as businesses navigate a labor market that continues to tighten, a panel of local experts assembled by the Business Record concluded.

At least one of the experts wants you to remember the people you already have on your staff, too. It’s easier to keep an employee than to hire one. “Companies are needing to figure out retention strategies. Our focus at Palmer Group — and what we try to talk to our clients about — is how do you keep your people engaged?” said David Leto, president of employment firm Palmer Group. 

“How do you understand and make them understand their purpose with your organization? So that, to me, is the focus. There’s going to be a lot of movement in the market, there’s a lot of opportunities out there, so I think the focus should be on retention strategy for companies.”

That’s where how you treat your present staff comes in. 

“Your employment brand is so important when you hire, in order to keep your people,” Leto said. “So don’t forget about what you’re presenting within your business, the community, how you treat your employees. Do not forget to say ‘thank you.’ It’s so simple,” he said. 

In Palmer’s 2019 salary survey report, Leto noted that some employers are taking an additional step — pumping up perks such as volunteer time off, paid sabbaticals, wellness incentives, “adult recess,” company trip incentives, free food, off-site events, professional development and a chance to be a shareholder, for example. 

That kind of thing is important to any worker, but millennials often look for them while considering multiple job offers. 

“Here in a few years, 50 percent of our workforce is going to be millennials, and I have a team of them,” Leto said. “They are talented, they’re smart, they work hard. Challenge them, give them the opportunity to grow.” 

The panelists examined a wide range of employment issues, from hiring people with criminal records to pursuing applicants who have disabilities, limited English or other issues. They offered tips on how to broaden your candidate search in an era of very low unemployment — 2.5 percent in Iowa.

It’s a huge issue. One bit of evidence: The Iowa Business Council’s third-quarter survey of the 23 major employers that belong to the council found that attracting, developing and keeping a skilled workforce was the top concern, cited by 75 percent of respondents.

Change recruiting strategy, examine process

Kevin Erickson, regional vice president of Robert Half, said the low unemployment rate in Iowa means that businesses should consider whether they are recruiting in the best way — including whether the hiring process takes too long. 

“With a static recruitment strategy in such a dynamic and fluid labor market, potentially you could set yourself behind in being able to find the people that are going to move your business forward,” Erickson said. “People might consider loosening hiring requirements, whether that is how many years of experience I need to have for this role, technical experience, education. Do we need to revisit those to give ourselves access to a broader pool of talent?”

And it may be time to reconsider the endurance-test, daylong, multiday, multipart hiring processes that seem to have taken over, Erickson said. 

“How long is it taking us to move through from start to finish on a search? With so many offers out there that these candidates carry, if you don’t move in an efficient manner, potentially you’re going to lose access to the best person. And so I just think a lot of the clients that we work with are asking for feedback and want us to take them through, ‘What changes do we need to make to make sure we’ve got the right people in our organization?” Erickson said. 

Kathy Joblinske, executive vice president of Manpower in Central Iowa, sees some of the same issues with recruiting and job interviews. In a time when computers cast aside many job applicants whose submissions don’t have certain key words, it may be time to be more human, she said. 

“I’ve seen some of our companies start to get back to where it’s more personal and getting to know those candidates, versus the boxes they’ve checked and the online, everything running through the matrix and so forth,” Joblinske said. “And I think that will help as our companies start to better get to know the individual, then they can see past some of the barriers that show up on paper. Perhaps there are definitely legal requirements in some cases, but when you ask the companies if they must do something because of legal reasons, in many cases it’s, ‘Well it’s just what we’ve done for many years.’

“And so, as processes change, it comes back to being more, ‘Are you the right person for our culture? Did you bring the right attitude? Are you really wanting this job?” Joblinske said. “It’s looking for people who are desirable and want a job. It could be an ex-offender, it could be a minority, it could be folks with disabilities, there’s still a lot of veterans out there that need to be employed. We can’t wait for those folks to come to us. We have to go to them and meet them on their level.”

Recruit untapped populations

Many employees will attempt to hire more workers this year, if research by the employment agencies and the Iowa Business Council holds true. 
That could mean more pressure to look at workers who might have disabilities, or a criminal record, or are immigrants trying to learn the language, or have another challenge that means they need a chance to work into a field, said Mary Bontrager, the Greater Des Moines Partnership’s executive vice president for talent development.

“[We need to consider] some of these untapped populations that have historically been underemployed,” Bontrager said. “That includes our ex-offender population, persons with disabilities. A population that we’re working very closely with is the foreign-born population, in particular those that are highly skilled and educated in their home country, but it’s very difficult for them to transfer credentialing or experience here in the United States, and certainly here in the metro area. So how can we be better at helping those individuals and helping companies recognize what they have?

“We did a great job about five years ago recognizing that challenge with our veteran population, and really mobilized the employer community again to better understand their transferable skills. And we really drastically reduced that unemployment rate in a very short period of time. So I think we can do the same with any number of these populations if we become really intentional and really help our employers to become better with the right tools that they’re ready and able to bring these individuals into their workplaces.”

Leto said employers seem to be slow to consider those employees, because their business culture hasn’t moved in that direction in the past. 

“I think when it comes to having a criminal past, we’re in the business where clients hire us to find them people and they’re just not willing to accept people with certain criminal pasts,” Leto said. “So that is a limiting factor. I’m sure you’ve had the experience of putting people back to work, which is really, really tough. I’m not sure where these folks will try to turn, but it’s challenging.” 

Joblinske still thinks many will need to consider recruits they may be passing up now — those with current or past issues. 

“I know that there’ll be a lot of focus on different talent pools that we can be tapping into,” she said. “We have a large population of people with disabilities who are highly unemployed, highly skilled. We need to be looking at those talent pools, and also refugees and re-entering citizens.”

Erickson said retirees are an important resource, too. He knows of a company that has sent retirees overseas to train workers. “They send them over to their plants, they go over there and they help do some training and things like that, but they get a vacation out of the deal, too. It’s kind of an interesting way to use some of the retired folks and bring them into the operation.”

Part of the challenge is to be looking for help far before the positions are open, Erickson said. That means partnerships with universities, holding job fairs, and working with recruiters.

“We’ve got to have our brand and our story ready to be told so that people are coming to us before we ever even have the need,” Erickson said. “So it’s very dynamic. It’s interesting out there for organizations that really have to be, it’s easier said than done oftentimes, but how do you tap into the retired? How do you tap into those that might be new to our country, etc.? You have to seek them out, and then it’ll give you more options.”

But there is real pain out there in hiring offices, he added. “We’re at a tipping point where people have to get real and they have to understand that what was available six months ago is not available today, and by all accounts we’re continuing to see more acute levels of skilled labor available.” Or unavailable, as the case may be.

“Generally speaking, when we’re talking with clients about their hiring needs, we’re always trying to ask them to consider a broader range of candidates than maybe we originally start on,” Erickson said. “We’re advocating and you might hear us use the words ‘stretching requirements.’ We’re advocating for different pools [of recruits] all the time when we’re looking at these different priorities.”

A string of 96 straight months of job growth has left many struggling to find help, Erickson said. 

Leto noted that sometimes potential employees trip up because they lack “soft skills.”

“If they have those soft skills, their opportunity to receive a position is much greater,” he said. “We see those that have trouble communicating, talking and looking somebody in the eye, and having a [good] handshake — those are the people that struggle to find employment.”

Part of the challenge is realizing that it’s a global economy, Bontrager said. For example, some workers from other countries may have exceptional IT skills, but only fair English and maybe a subpar handshake, by U.S. customs. 

“And so, countries like India that have brilliant people in technology who don’t have a strong command of the English language, do we want individuals like that? Of course we do,” Bontrager said. “Maybe they don’t speak perfect English, and maybe they are a little more timid when they shake your hand because that’s their culture. But if we want to be a global community, if we want to be a welcoming community, we have to start looking at the person and not the checkboxes.”

Offering flexibility at work

Bontrager said another approach to the labor shortage is to give the broad pool of potential workers flexibility. “There are flexible work opportunities — more work-from-home, or work four 10-hour days so they can have an extended weekend.

“I’m seeing a lot more flexibility with employers than ever before,” Bontrager said. “Part-time work where they had never considered it before,” for example. 

“You don’t have to work 8 to 5, and we’re seeing a lot more flexibility. The retiree population is very valuable to organizations, so I’ve seen a lot more companies luring them back into different roles, training roles, and accommodating their schedules. Whatever they need and want, they’re getting a fantastic benefit to the organization.”

Immigrants face challenges understanding the system, and gaining education while working to support family members, said Donna Burkett, labor market information division bureau chief at Iowa Workforce Development.

“Many of them would be first-generation college students, their parents have no idea how to navigate the system. They have no idea how to fill out a FAFSA [federal financial aid documents], and some of these students and future students, they’re working at the age of 15 to help pay bills for the family,” Burkett said. “So how do you create that support system, that this is important, and step from that work opportunity to educate yourself? I think it takes the village to wrap our arms around all of these groups to help welcome them in. But employers are taking a big responsibility, as well.”

Pay trends

Offering more pay can get the attention of recruits, some of whom may be holding several offers. Palmer’s 2019 survey, in cooperation with the Greater Des Moines Partnership, found that most employers are looking to offer 3 to 4 percent raises in 2019, but the share offering more than 5 percent pay bumps will be higher than it was this year. 

Palmer found that 54 percent of Iowa companies expect to offer raises of 3 to 4 percent in 2019, down from 59 percent this year. At the same time, 12 percent plan to give raises of 5 percent or more next year, up from 7 percent this year. Another 25 percent plan to give raises of 1 to 2 percent next year (down from 28 percent) while 9 percent plan to give no raise (up from 6 percent). 

“It’s a decent increase, nothing too high” in most cases, Leto said. “I think wages have steadily increased year over year. But I haven’t seen a whole lot of salaries just going through the roof,” even in technical fields, he added.

Will the low unemployment rate force increases in salaries? “When there is enough pain, they will start looking at the wages,” Joblinske said. “And we’re seeing 
that from engineers to skilled trades. They’ll hold back until there’s nothing they can do.”

Bontrager said there can be pressure for higher pay, especially in highly competitive fields such as IT. “If the talent pool expects a higher wage, higher salary than what’s being offered, whether they’re coming out of college or you’re experienced, there’s definitely some wage pressure.”

Retraining

Joblinske said another key will be continuing work to promote higher education among Iowans and to hire veterans. 

“People are dropping out from high school, and some maybe started a postsecondary training or education that they didn’t finish, and then you have those adults that never, ever started at all. So how do we attract them back into some sort of education, which will be needed for our future positions?”Joblinske said. “I think the statistic from Future Ready Iowa was that by 2025, 68 percent of our jobs will require postsecondary education. And we’re sitting at about 58.3 percent of our available employees that have postsecondary education. So for us and for you, it’s how do we attract those adults back into education?” 
Bontrager said it is important in this tight labor market to reach out to various populations. “We have to make sure that the folks that we are attracting to the community can contribute to the demand that we have here,” she said. “So it’s ensuring that we are really working hard to attract the right type of talent here in the Greater Des Moines region.”

With the area growing, both in gross domestic product and in population, and with property development keeping pace, the demand for construction workers will remain high, she said. 

Looking ahead as tech, AI come into play

Many businesses are having a hard enough time hiring a full staff now, but that isn’t the only challenge, Bontrager noted.

“The other thing that we really are not doing is being very intentional about thinking ahead. It’s not only what we need today, but what are we going to need to do to prepare, as far as individuals, for the jobs in five or 10 years from now as technology and [artificial intelligence] begin to integrate more into all of our industries?” she asked.

“So that’s education and preparing our talent pool that’s coming out of K-12 that there will be a lot of retooling for individuals who are currently employed, that they need to get ready for these changes that are coming,” she added.

Fellowship, internships

Bontrager and Leto said offering internships and fellowships has become essential in the search for future workers. 

“Internships and fellowships and those kinds of things are increasing, and that’s become a necessary part of any company’s attraction strategy,” Bontrager said. 

“It’s not [just] a good thing to do, you really need to be doing it.”

Said Leto: “It’s not really optional at this point.”