Workforce Development Dilemma | Will companies hire, or build from within? Some say neither.
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Nancy Snyder, president of Commonwealth Corp.
In recent months, it has appeared as if those who predicted that Massachusetts would not suffer a recession as dire as the rest of the nation and would emerge from it sooner, were right.
Jobs are being created in the state at a slow pace and the unemployment rate, which broke 10 percent last year, has since dipped to the low 9-percent range.
Nancy Snyder, president of Common-wealth Corp., provides a positive outlook.
“We’re definitely seeing more hiring activity. Companies are beginning to post jobs and hire people,” she said.
As conditions improve, employers are faced with a strategic decision: Should the company begin hiring, or should it simply handle increases in business by putting more responsibility on current employees, perhaps promoting them along the way?
Businesses that managed to come through the economy with “underutilized” employees still on the payroll are going to increase hours until those employees are “maxed out” before hiring in any significant numbers, Snyder said.
Serious efforts to train existing employees will be seen in sectors that were relatively unaffected by the recession, Snyder said.
For example, the health care sector harped about a nursing shortage before the recession, spent the entire recession hiring and could still use more nurses today.
In that case, building a workforce from within is most likely, and opportunity for advancement will be offered to entry-level employees, Snyder said.
“Health care organizations are investing in CNAs and entry-level unit clerks. They’re trying to train them for more responsibility. Where that’s not an issue is when you’re at a level of expertise that takes years. Then, they’re hiring.”
Off The Street
In sectors of the economy that took a beating during the recession, the story is much, much different.
The manufacturing sector lost 14,700 jobs between March 2009 and last month, according to the state Office of Labor and Workforce Development. The sector gained 200 jobs in February and remained flat in August.
“It’s tough,” said Kevin Magill, vice president of All Steel Fabricating in North Grafton. “Call me in a couple weeks, though, and it might be totally different. It might be great.”
The extreme unpredictability, while it does provide for short-term success now and then, makes it very difficult for All Steel — and employers in general — to plan for the future.
And that’s very tough for a company that relies on highly-skilled employees for its relatively thin margins.
“In our hiring, we’re looking for quality, skilled labor that has quite a bit of experience behind them, because we don’t have the resources to train,” even as the economy makes training new employees seem like a more attractive proposition, Magill said.
Magill said there’s “an abundance of people coming in off the street” looking for jobs. But All Steel just doesn’t have the consistent work to justify hiring.
“We’ve got people looking to jump trades. They’re willing to do anything. They’re willing to be trained, and they’d probably make excellent employees,” he said.
The problem is that it’s not just the job market or the manufacturing sector that’s unpredictable. It’s government and politics, too.
“I don’t need a tax break. I’m not paying any taxes because I’m not making any money,” Magill said. “Give me a reason to hire some people. My customers need to loosen up the money. If that happens, the story changes.”
Consumer Confidence
Gary Chaison, professor of industrial relations at Clark University’s Graduate School of Management in Worcester, said most employers would like to hire and nurture their own talent pools, but won’t commit to that investment.
For Chaison, economic and political uncertainty is caused by a lack of consumer and voter confidence. It’s a rickety platform on which to build a future.
Employers “are reluctant to commit to adding to their workforces, mostly because of the high costs of employee benefits, particularly health care benefits and pensions, and because of the difficulty in downsizing,” Chaison said.
In that case, employers are more likely to decide that technology that can increase productivity is a better investment than additional employees. They may also decide that having certain work done by other firms or by overseas operations while simply adding part-time or temporary workers here is more cost effective and predictable, Chaison said.
“If employers don’t want to commit to hire…unemployment will remain high. And I think this is the case across industry lines and would include manufacturing, services, retailing, and now even health care,” Chaison said.
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