Larry has owned a Brooklyn hardware store since the ‘60’s and thanks to his manager Warren he has been extremely successful. He was able to do well even in the face of the rise of major competition from box store chains like Home Depot. Warren knew where every screw and bolt was stored and pretty much had a rapport with almost every customer. After being shuttered during Covid, Larry reopened with the expectation to resume where he left off. Thankfully he also received a loan from the Payroll Protection Program which meant that he was able to pay Warren even during the Covid days.
But at 62, the indispensable Warren informed a shocked Larry that he was ready to retire. Sure, he could look to replace Warren but how does one find a man with the experience and knowledge that Warren has? Larry himself started to think about his own future given that his two sons live out of state and are professionals. Who would step in should he decide to retire? This scenario is repeating itself in businesses all over America. If the overall labor shortage wasn’t bad enough, losing the best and most experienced workers is a blow that businesses are finding hard to accept and to continue operating.
More than 3 million Americans retired early because of the Covid-19 crisis, new research found. A good number of them are like Warren and are impacting the institutions they are leaving. Their number is equal to more than half of the workers still missing in the labor force from pre-pandemic levels. And these are not just your ordinary line workers but a good number of them were in senior management. Hiring slowed significantly at the end of last year, a stark indication that employers are struggling to fill positions, particularly the skilled jobs even as the United States remains millions of jobs short of pre-pandemic levels.
The economy added 199,000 jobs in December on a seasonally adjusted basis, the Labor Department reported, down from 249,000 in November. The gains were the smallest in a year that nonetheless produced record job growth. Most people looking for jobs are finding them, but not all are quite the Warren type of skilled worker. Basically, those looking for jobs last month were finding them at almost any level. The unemployment rate fell to 3.9 percent, from 4.2 percent. Wages continued to surge, rising 0.6 percent in December and 4.7 percent for the year, reflecting intense competition among employers for workers and the efforts by employers to keep skilled workers at any cost.
For the first time in a long time, I am getting questions about my ideas for creative ways to keep skilled and experienced workers. It isn’t always about pay as some are simply experiencing burn-out and thanks to retirement benefits or savings are finding it easier to walk away from jobs they thought they would never leave, perhaps as recent as two years ago. Or maybe, just maybe, they enjoyed the prolonged Covid furlough of working from home.
Some employers make the mistake of entrusting a worker with so much information and knowledge that when that worker moves on there is an irreplaceable void to the point where normal operations are jeopardized. One Labor expert put it this way: “Investing most of your knowledge in one employee is like relying on one battery to carry all the electrical power in your house.” As a result, they promulgate the “backup” theory, making sure that other employees share in the knowledge and skills so that a business or organization can continue to operate.
To put it mildly, finding good employees is not an easy task. Neither is training young employees with the hope that they will emerge as the prized experience and knowledgeable employees. I for one counsel sharing the workings of a company or not-for-profit entity with a group or all of the employees. In this way, all of the company’s intricate knowledge are not embedded in one person or one group. Sometimes finding someone who has worked in a similar position but for whatever reason is interested in a change can be the answer although that person might carry some baggage from the past.
Keeping good employees happy is often the best answer to making sure good employees stay. Dani will never forget that when he first started and was making his first Bar Mitzvah, he confided in his boss that he was short of cash to make the Shabbos affair. His boss instantly said that he would lend him $2500 but when Dani wanted to return the money, his boss refused saying that he had forgotten to give a gift for the Bar Mitzvah. That was 31 years ago!
The shortage in skilled workers is widespread throughout society. The healthcare industry is facing an unprecedented crisis, particularly for some of its professional and skilled workers. Nursing home worker shortage ripples through communities. Nurses are in short supply and in some areas, there is a shortage of doctors. In the high-tech industry, salaries are going through the roof and skilled workers are even being offered signing bonuses, like professional athletes, to come on board.
There is a new word in the business world that is seeking to address at least part of the problem: accommodation. When a prized worker asks for certain working accommodations such as working from home on several or most days, it is almost immediately granted. Accommodation has become a way of keeping good workers even if they chose to work remotely, a growing trend since the pandemic and seemingly here to stay.
Ironically, some businesses are being forced to downsize to compensate for the loss of their best workers. For example, if a prized worker handled two different divisions in a health care billing agency, when that worker decided to retire, the CEO decided to close one of the less profitable departments that the worker was handling.
Companies used to encourage early retirement with the thought that the faster they turned over jobs to younger workers the better the organizations will fare. It was also a cost-saving measure since the older employees generally demanded more in compensation. They were also anxious to turn on the pension spigot before it got more expensive. All that has changed as the older workers are being encouraged to stay longer. Their experience is simply not replaceable, at least in the short-term.
The bottom line is that a good company needs to have a strategy for keeping its best employees and eventually to make a smooth transition to a younger generation of workers. It takes a good deal of planning since prized employees are not developed overnight.