Hiring 2020 does not relate to the year. It’s all about your clear vision and focus on hiring strategies now to attract, train and retain talented people into 2020.
According to the Georgetown University Center on Education and the Workforce, by 2020, the United States is expected to face a shortage of 5 million workers who are equipped with technical certificates and credentials. Not surprisingly, employee retention is also a top concern for businesses that compete in the tightening market for skilled workers.
With unemployment at its lowest levels in recent history, there are benefits to the workers who’ve found employment, which presents challenges for employers. In order to understand how to recruit and hire in your market, we need to look at recent trends. Let’s see what is happening in the numbers.
In U.S. Job Market’s Strength Is Allowing More to Share in Pay Gains, a New York Times January 2018 article, writer Natalie Kitroeff says, “The bustling United States economy is beginning to benefit some American workers who have not gotten a taste of the recovery and have been most in need of relief. That picture was reinforced by a [January 2018] report from the Labor Department, which showed an increase of 148,000 jobs [since December 2017]. The figure fell short of economists’ expectations, but some of the most impressive job gains in the past year were in blue-collar and service industries that pay a decent salary.”
“Over all, average hourly earnings were 2.5 percent higher in December  compared with the year before, scarcely keeping up with inflation,” the article states, but that is changing. “Wages have been one of the most intensely debated puzzles of the labor market, with incomes growing at a more sluggish rate than the hiring demand would suggest. … There are signs beneath the surface, though, that more widespread wage growth may be around the corner.
This presents an employment market that encompasses a scarce workforce looking for work at top dollar. If an employer is located in an area where unemployment extremely low, this market may have an even higher wage demand. “‘In areas where unemployment has dipped below the national rate, pay has begun to accelerate. Cities where joblessness is 3.5 percent or lower have had an impressive 4 percent year-over-year increase in earnings,’” said Ian Shepherdson, chief economist of Pantheon Macroeconomics in the Times article.
To intensify the struggle for talent, strict employment standards for most jobs in the automotive recycling industry and other type fields, especially for drivers and those working heavy equipment which require drug testing and skills assessments, the article points out that no one is having an easy time hiring blue collar workers.
Reported in The Washington Post, in a May 2018 article titled “U.S. Economy Extends its Hiring Spree,” with a better than expected 223,000 new jobs in May, this good news for the 3-4 percent unemployed workforce is tough news for employers looking to attract qualified candidates to their available jobs. Writer Heather Long cites, “The U.S. economy added 223,000 jobs in May as U.S. companies continued their hiring spree, according to the Labor Department’s monthly jobs report. The unemployment rate fell to 3.8 percent, the lowest since 2000. Many economists predict the unemployment rate will fall even further this year, potentially dropping to 3.5 percent, which would be the lowest rate since 1969. Wage growth ticked up slightly to 2.7 percent over the past year, but is still sluggish.”
She suggested that some companies are not increasing wages, but instead are using unconventional methods of entering workers in raffles for televisions, laptops and tablets, or paying to have food trucks to serve the staff lunch, or offering free lunch as employee perks. Getting creative can keep your workforce content, whereas doing nothing potentially puts your employees at risk for being recruited by other companies.
While creativity and pay increases can keep your workers from seeking new jobs, it does not help the problem of attracting qualified workers to automotive recycling jobs. What is a facility to do?
Enter the AR Career Zone and its potential to change your hiring potential.
Engagement & Attracting Workers
“Serving on the educational committee of some larger organizations, I began to see trends in their resources for training, which spills into hiring,” says Ginny Whelan, Executive Director of the ARA Educational Foundation (ARAEF). “They were using apprenticeships and high level training to attract workers. It got me thinking about our hiring tactics. I thought, why reinvent the wheel when we have tech training schools teaching auto mechanics and like-related fields to students who would be great potential employees of auto recyclers. Why not cooperate with them to engage and attract their graduates. We already have ARA University as a training resource to engage them with the industry, but we needed a job site to attract them.”
Using employment sites as a model, the Foundation created the AR Career Zone (www.araef.org), where auto recyclers can list jobs and those with mechanical skills can find them. The candidate can also post their resumes to attract employers. The site has plans to host career materials, employment structures (such as above), tips on how to interview, and other resources.
Interestingly, the ARAEF is also in discussions with S/P2 Careers (sp2.org) as a potential partner to help auto recyclers with their labor shortage. S/P2 Careers is the largest resume database of career-specific automotive tech students. It is connecting industry businesses with the next generation of skilled workers. “We currently have 36,000 students who have posted their resumes on our site, and we make those resumes available to industries. Of the resumes, 27,000 are automotive services students. Our goal is to help them find opportunities, either in internships, apprenticeships or entry level jobs, ultimately with the goal to get that first job with the right first employer,” says Kyle Holt, President, S/P2 Careers.
The ARAEF will manage the industry-specific AR Career Zone website, where auto recycling facility employers list their available positions. Each recycler has their own private account to manage their job listings. The cost is affordable, and allows the Automotive Recycling Industry to have an autonomous space to be recognized as an exciting career choice. Access to S/P2 trained students already looking for jobs in the collision and repair industry offers a unique partnership opportunity, with details still being determined.
“We are hoping that automotive recyclers see the opportunity to grow their own techs, instead of looking for ones who are already employed by other recycling businesses,” says Holt. With that thought, Holt acknowledges that there is the employer mindset that once a tech is trained, especially the newer generation, they will leave, and time and money will be wasted. He noted that this existed in the collision service industries, as well. “Two years ago I heard that over and over, ‘what if they leave me.’ That attitude has changed in the last 24 months. They are now thinking ‘How will I survive if I don’t grow my own.’ They are also growing their potential pipelines of techs, through internships and apprenticeships, and training multiple people at the same time.”
“If you show young techs new to your industry a career path,” says Holt, “and available certifications, with opportunity to move up, they are likely to stay. In fact, the staffing company, Spherion (www.spherion.com), did an Emerging Workforce Study. They found that 34 percent of the new generation who did not receive mentoring left those jobs, while 77 percent say they are more likely to stay when mentoring is provided to help them gain skills and valuable certifications, which builds loyalty.”
The possibility of ARA members having access to S/P2 talent is exciting to Holt and Whelan. “We have not determined how this will work,” says Whelan, “such as a member benefit, but it is exciting to see so many students ready for employment.” Regardless of these details, Holt urges that auto recyclers will need to see the value of these students and embrace hiring to grow employee techs to reap the rewards of their listings. “You can teach automotive recycling processes and skills. You can’t teach passion for automotive services as a career, and our students have that,” says Holt.
“In order to be seen as a viable career path,” says Whelan, “automotive recycling jobs must be listed among other auto-related jobs. The salaries of some of our auto recycling positions match or exceed other like-jobs in sister fields. As a part of this effort, we are creating career-path information to engage candidates to see where employment can lead, as well as salary levels. We have already developed a employment structure chart.” See chart on page 46.
Ultimately, someone will hire the talented candidates. That someone will offer the best in pay, benefits, work-life opportunities, training, certifications or continuing education, and clear career paths. If you are not rethinking your employment packages, it is time to do so.
Embrace the Trend
Let’s look at the training piece, an attractive perk to non-college bound next generation.
“The premiere training platform of our industry isn’t online,” says Whelan, who had spent the last fifteen years developing ARAUniversity.org, the online training platform of the industry. While ARAU still plays a vital role, this alone will not recruit and retain the next generation.
“Here comes my pitch for the apprentice concept. Mentoring. Putting our employees on an established career path, where they step into the work knowing potential outcomes. At the ARA University, we are developing an apprenticeship outline to illustrate where a facility could start.”
“Many in our industry are unofficially apprenticed: the sons and daughters of owners. They start by doing the worst jobs,” says Whelan. “But I believe that is not a good way to approach it. Yes, it is a small family business method, but the millennial and Z generation, even some gen X, who are typically more tolerant, will leave the company and the industry. They define what they want to come into and you work with them. The key is clarity of steps to success, and providing what they need to be successful, where even company tools are provided. Then comes the mentoring.”
No matter if you agree or not, or feel you have the time or not, the concept of apprenticeship and mentoring is gaining speed in other sectors outside of the blue collar world and even in other countries. In the United Kingdom, an apprenticeship levy or payroll wage tax applies to all larger employers. Either you apprentice employees or loose the refundable levy. Meanwhile, in Switzerland, 70 percent of young people enter the workforce through an apprenticeship. It is becoming a topic of global discussion.
On the bandwagon, in June 2017, President Trump signed an executive order called “Dignity of Work,” which doubled the amount of funding to create apprenticeships where participants can “earn while you learn.” “We’re training people to have great jobs and high paying jobs,” Trump said at a White House ceremony. He directed the government to review and streamline some 43 workforce programs across 13 agencies. The executive order addresses the nation’s “skills gap” that has left millions of open jobs unfilled. Many states have since followed suit with their own executive orders.
In a December 2017 article, The Washington Post explored why apprenticeships are a good idea that have never really taken off in the U.S. “The reasons why fewer than 2 percent of 18- to 24-year-olds in this country are enrolled in apprenticeships are varied and complex, and, unfortunately, many can’t be easily fixed with executive orders from the White House,” says writer Jeffrey J. Selingo. “Last year, about 500,000 apprentices were listed with 21,000 programs on the Department of Labor’s registry (an increase of 100,000 from four years ago) … it’s still far short of demand and pales in comparison to the 2 million new students who enroll in community colleges every year.
“Some 91 percent of apprentices find employment after completing their programs, with a starting pay of more than $51,000 annually. What’s more, most of them leave their programs without any debt, compared to the average college graduate last year who borrowed to finance their education and left campus $37,000 in the hole,” he notes. Yet, the biggest reason for lack of apprenticeship participants “is cultural.” The U.S. “college-for-all” movement over the last four decades has pushed many youth to campuses even when they weren’t ready or didn’t want to follow that well-trod pathway, Selingo says.
As a result of Trump’s order, the U.S. Department of Labor pulled together a 20-member task force of experts, including the secretaries of education, labor and commerce, to develop recommendations to make that expansion a reality. The task force said, “Apprenticeship programs, when implemented effectively, provide workers with a career path featuring paid on-the-job training, skills development, and mentorship, while at the same time providing employers with a steady source of highly trained and productive workers. These programs have the potential to grow into a critical and successful component of America’s workforce strategy, but are currently underutilized,” as noted in a May 2018 Inside Higher Ed article.
Can Apprenticeship & Mentoring Deliver?
In the area of hiring, an article, Measuring ROI Leads to Better Apprenticeship Programs by Greg Goth, on the Society for Human Resource Management website says, “Organizations that use apprenticeships [and mentoring] to recruit and train employees in a cost-effective way are discovering an impressive return on investment (ROI), which can be even greater when detailed data is used to evaluate the program.”
The Benefits and Costs of Apprenticeships: A Business Perspective report from the U.S. Department of Commerce suggests that a successful program must be developed as a win-win-win. “Once a decision has been made to include apprenticeships in a company’s workforce strategy, the key to sustaining an apprenticeship program over time is to balance the interests of the employer, the apprentices, and the incumbent workforce. A good program is one in which all three groups see benefits. It can be tempting for employers to focus too narrowly on their own short-term interests in structuring apprenticeship programs. However, to attract good apprentices, employers must offer a competitive compensation package, portable credentials, a relatively high probability of a good job, and have receptive coworkers who see new teammates as helping the company grow.”
The ARAEF will highlight the new career website at the ARA 75th Annual Convention & Expo, and through AR Career Zone (araef.org) and ARAUniversity.org. The AR Career Zone is available now for recycler to post jobs. Now, go engage, apprentice and mentor!
Caryn Smith is the editor of Automotive Recycling magazine and has been covering the industry for over 20 years.