The labor market for industrial staffing is tighter and moving faster than ever, and recruiting in the segment requires more creativity. Industrial staffing firms must navigate wage pressures and make sure clients have the latest information. Meanwhile, “ghosting” — where workers fail to show up without giving any notice — appears to be more prevalent.
Technology keeps bringing changes as well, with online staffing on everybody’s radar.
Is there any good news? There is definitely that. According to Staffing Industry Analysts’ April 2019 forecast, industrial staffing revenue will rise 4% this year to reach $36.3 billion, an upgrade from an earlier forecast of 3%. The latest edition of the “US Staffing Industry Forecast” report noted that total employment growth in manufacturing and construction remains positive. It also cited strong data regarding increases in pay rates and bill rates driven by minimum wage increases and competition for candidates.
Of course, the ongoing hiring trends make finding the right workers that much more difficult.
It’s always been difficult to find higher-skilled workers, but now it’s even hard to find workers to fill more general industrial roles, says Mark Milan, marketing manager for QPS Employment, headquartered in Brookfield, Wisconsin. That’s especially the case in some areas with unemployment at 2% or lower.
In fact, the struggle for talent is one of the biggest trends that Milan says he is seeing.
As a result, the company is getting more creative in its recruiting efforts, such as using referrals and sign-on bonuses. It’s also trying new things on social media and has people in the field to work on grass-roots recruiting efforts, such as setting up job fairs.
It’s also communicating wage analyses on the minimum pay rates needed to attract candidates to clients and speaking with them about being open to accepting people with less experience. They also discuss the need to act quickly.
Moving quickly is a theme.
“Years ago, you could send out a résumé and the company could consider it and the next week set up an interview, maybe the next week set up a second interview,” Milan says. “Now we’re talking hours to get back to us — let’s get the person out to the company for an interview, let’s try to reduce that time from the time they apply to us to the time they are scheduled to start a position.”
Greater use of large-volume staffing, quicker times to fill and a focus on retaining talent are some of the trends in industrial staffing seen by Paul Polito, president, commercial staffing, Staffing 360 Solutions, which serves customers in the New England area as well as the Carolinas. In the past, there was a 48- to 72-hour window to fill a job and meet expectations. Now that is a 24- to 48-hour window as clients move to get product out the door more quickly.
“Not only do we have to find the body of talent that is needed, but we have to find it faster while still ensuring the quality of the hire that we are known for,” Polito says.
In addition, the tight labor market is making retention a challenge.
“The need to retain talent as really being a trend is something people are going to figure out pretty soon,” he said. “The recruitment is the core of what we do, but keeping people engaged and motivated and getting them through that bridge to hire process, making sure they are productive for our customers, that’s what is really going to be the key to our success.”
Retention is also a concern for clients, and temporary workers are getting hired in greater numbers and more often by clients.
Looking at skills in demand, Polito cites CNC machinists, workers who use computer-controlled machinery to produce parts and tools.
“We’re hoping that more kids coming out of high school realize that manufacturing is not your grandfather’s manufacturing anymore,” he said. “These places are clean, they’re neat places to work, they’ve got cool technology and for those who are mechanically inclined, there are great opportunities to go into careers like that.”
Warehousing professionals from production supervisors all the way to packagers and assemblers are also in demand.
Tighter than Ever
Neil Stallard, CEO of The Reserves Network, says he has never seen the labor market quite so tight, which makes it more important than ever to be proactive in recruiting.
Many of Fairview Park, Ohio-based The Reserves Network’s client companies are manufacturers, and they continue to hire. There is still a push to get products out the door. The challenge is finding good, reliable workers who will stick around for a while. Today, workers may switch jobs for a five-minute shorter commute or 25 cents more per hour.
And while there is no shortage of applications, it’s also becoming difficult to get people in the door to be interviewed, Stallard says. Right now, there’s a 10% show rate for interviews — only one in every 10 people with an interview show up. Some call the practice “ghosting.”
It happens without notice, and it occurs with employees on assignment as well, he says. “That old-time common courtesy of giving notice and just sticking out a shift, or fulfilling commitments, or at least making a phone call, writing thank-you notes, all of that stuff has just gone away.”
Stallard also notes what he dubs the “Indeed effect” as adding to the challenge of recruiting. Jobs website Indeed earlier this year discontinued free ads from its staffing firm clients. As a result, firms have had to look at other avenues for recruiting workers, such as referrals.
Wage pressure is also having an effect, says Tammi Heaton, executive VP and COO of Pridestaff, headquartered in Fresno, California. The low unemployment is driving wages higher, she notes, and says workers have been leaving switching jobs for as little as 25 cents per hour more. In addition, Amazon — with its $15 minimum wage — affects other warehouse operations anywhere it builds a new warehouse.
Heaton also echoes others in citing that “ghosting” is becoming more prevalent; the trend, which was brought up during a recent meeting of PrideStaff owners, occurs more among younger workers.
Heaton speculates that some workers are doing it socially, so it has become a norm for some even on a professional level. “They don’t want to disappoint or tell people ‘no,’ so it’s easier just to not show up,” she says.
Legal trends also impact staffing. And new laws in some states, such as California, require sexual harassment training for even nonsupervisory employees, including temporary workers. Law firm Jackson Lewis writes more about the California law in a blog post.
Technology continues to usher in change. Technology is spurring staffing and client companies to move faster when it comes to placing workers. Another technological disruption is online staffing, where workers use an online platform to sign up for work.
QPS is planning to release an online staffing app by the fourth quarter, Milan says. It will enable the company to see where people are located and send them notifications; it will also help with timekeeping and allow workers to keep in touch with the company.
“I think who will manage technology along with their normal staffing practice the best is what will hopefully help you grow,” Milan says.
Meanwhile, Stallard says The Reserves Network is about a month away from committing to an online staffing platform that it will use.
“I see a huge upside for it,” he says. Online platforms can allow for online orders, assignments, candidate tracking, providing directions to workers as well as keeping candidates engaged. However, it doesn’t take away from the need to meet someone and make a conscious human decision to place that person where he or she will be a good fit.
Whether technology is a death knell of the branch office is anyone’s guess. Some say firms need fewer branches, while other say physical locations remain as important as ever.
Staffing 360’s Polito doesn’t see branch offices going away given that staffing is a people business.
“I feel that the office model will continue, particularly in commercial staffing,” Polito said. “The model will obviously change slightly, but I think the base model will remain the same.”
Clients still expect the firm to meet with and know the candidates, says QPS Employment’s Milan. And branches remain important for industrial staffing.
“With industrial, it’s still very high-touch,” he says. “We want to make sure that we see the candidate, we tell the candidate what the dress code is when they go into work.” Many people have embraced technology, but for some industrial workers, there’s a technology barrier or language issue. A physical presence will still be needed.
Stallard also expects branch office to remain important, but notes the radius that a branch office can serve is expanding. In the past, candidates went into a branch office to be interviewed, and it was where they dropped off time cards and picked up paychecks. Now, while it’s necessary for the interview, even those can be done remotely sometimes. Branches do remain important as a place for internal staff to collaborate, he notes.
It’s also more important than ever to engage and communicate with both clients and workers throughout the life of an assignment. It’s too easy to place and forget.
“It’s still a people business, it’s still a relationship business,” Stallard says. “We still want to be partners to our customers we want to solve problems for our customers.”
See the May/June 2019 issue of Staffing Industry Review magazine for more on industrial staffing.