Tight labor market drives companies to explore new ways of finding, keeping employees

Tuesday, June 13th 2000, 12:00 am
By: News On 6

In today's tight labor market, a well-crafted resume can earn workers movie passes, theme park tickets and expensive meals.

And that's before they're hired.

Afterward, they can expect higher salaries, signing bonuses, flexible scheduling and even a new car. Anything to deter another defection."I think over the past couple of years, it's been unparalleled," said Mickey Choate, associate director of career development at the University of Texas at Dallas and an 18-year veteran of college placement offices. "It's a different mindset than 30 years ago."

Different for both job seekers and employers who – realizing they can't hope to recruit all the people they need – are changing the way they do business to hang onto the ones they have.

Currently, Texas Instruments Inc. has about 1,500 openings, three times its normal average.

The Associates, a financial-services firm with 8,100 employees in the Dallas-Fort Worth area, has more than 500.

And after filling 15 new and existing positions in the last few months at the Dallas office of DDB Worldwide Communications Group, recruiter Lisa Bell is still not sated.

"Even if we don't have a position, I'm always looking," she said. "A few years ago, we could probably fill a position in two weeks. Now, it takes twice that."

The shallow labor pool has forced companies everywhere to recruit and retain employees and squeeze productivity from thin ranks with technology and innovative incentives that didn't exist in the last labor crunch.

And demographics dictate it will probably get worse.

The U.S. Bureau of Labor Statistics predicts the American economy will grow at 2.4 percent a year for the next eight years while the labor force expands at just 1.2 percent annually.

"The low birth rates of the '70s and early '80s are now being felt," said Bruce Phillips, director of the U.S. Small Business Administration's Office of Economic Research. "I don't think the problem is going away any time soon."

In Dallas, April unemployment stood at 2.9 percent, a full percentage point lower than the national average for the month.

For professionals, the rate is probably half that, recruiter Jeff Kaye said. That leaves employers trying to fill chessboards with a single set of pieces.

"In some markets, it becomes a mathematical impossibility to fill every position," said Mr. Kaye, president and chief operating officer of the Dallas recruiting firm Kaye/Bassman International Corp.

Seeking outside help

So companies are more often turning to independent contractors, temporary staff and outside firms to do work that may have once been handled in-house.

When Jennifer Marchetti started working for Trilogy Software Inc. in 1998, the company had a half-dozen people in its marketing department and just one dot.com spinoff.

Today, the Austin firm has six spinoffs and 60 marketing staffers.

"And I'm doing three interviews today," said Ms. Marchetti, Trilogy's director of public relations.

Even with the expansion, Ms. Marchetti said her job would be impossible without an outside firm that handles most of Trilogy's day-to-day publicity.

"We have a great PR firm that is like our arms and legs," she said. "I can move a lot faster if I don't have to write 20 press releases a week."

Companies are also using more temporary staffers and then hiring them for good.

The Associates uses and hires so many temporary workers that it now has a Randstad Staffing Services satellite office in its Irving headquarters.

There, the staffing firm fills daily openings at The Associates and helps former temps make the transition to permanent positions at the financial-services firm.

Temporary-to-permanent placement has gone up nationally by 20 percent in the last six months for the Milwaukee staffing company Manpower Inc.

"That's just a function of the tight labor market and the frustration of companies that can't find people themselves," Manpower chief executive Jeffrey Joerres said.

As a last resort, managers say, they are asking current employees to take up the staff-shortage slack.

A survey of benefits at more than 600 companies by the Society for Human Resource Management showed the number of companies offering paid vacation days fell to 87 percent in 2000 from 94 percent in 1999.

The percentage of companies offering paid personal days fell to 41 percent from 55 percent.

"So when they do have people, they can't afford to let them go," said Kristin Accipiter, spokeswoman for the Arlington, Va., trade group.

But experts say that strategy can quickly backfire, leading overtaxed workers to do the last thing bosses want them to do: quit.

"If there are empty chairs, somebody has to do the work," said Kathy Meyer, The Associates recruiter. "But if you don't fill those empty chairs, people will move on."

Offering incentives

Companies can't retain old employees if they can't recruit new ones, said Ms. Meyer, who advertises openings at several Internet job sites.

Recently, The Associates also started handing out movie passes and free tickets to Six Flags Over Texas at its in-house job fairs.

Current employees can earn up to $2,000 if someone they refer gets hired and stays at least six months.

"When you think about it, you're spending that much anyway," said Ms. Meyer, who makes about half of her 100 to 200 monthly hires through employee referrals. "So why not give it to your employees?"

At Texas Instruments, referral bonuses usually range from $500 to $1,500 but can go as high as $6,000 for hard-to-fill positions. And then there's the car.

Employees who refer a successful job candidate are eligible to win a Ford Lincoln or Mercury vehicle of their choice.

In January, Texas Instruments gave a Houston-based marketing manager a new Ford Explorer in the first such drawing. A second drawing is scheduled for July, said Tegwin Pulley, TI's vice president for talent, sourcing and diversity.

"At this point, 40 percent of the people we've hired this year have come through employee referrals," she said. "We have recently expanded our referral program to include TI retirees."

The semiconductor company is also trying to entice senior citizens back to work by catching them at popular pastimes such as flea market shopping.

Headhunters are also recruiting in unusual places such as sporting events and expos in a new strategy they call "radical sourcing," said human resources manager Debbie Norton.

Since it started radical sourcing in April, the company has garnered about 25 new hires and hundreds of referrals, including a few for some highly technical positions.

"In some cases, we've tested people right there on the spot," Ms. Norton said.

Training opportunities

At GTE Corp., the process can take a little longer.

The telecommunications giant annually puts about 100 college recruits through an 18-month training program that familiarizes them with the company's work and culture.

Eventually, those same recruits could go though a six-month program that teaches managers, developers and technical leads "soft skills" such as communications and conflict resolution, said Fari Ebrahimi, an assistant vice president at the Irving firm.

"So they see that as a major benefit," he said.

Increasingly, his employees are looking for incentives – such as training opportunities and telecommuting – that have a bigger effect on their professional and family life than their finances, Mr. Ebrahimi said.

And it's those sorts of benefits that keep him at GTE despite recruiting calls from dozens of dot.coms.

"For me it's never been about the money," Mr. Ebrahimi said. "Most people want to stay in a good, stable work environment that they enjoy working in. You spend a third of your life here, so it better be good."