Power shift: Why workers in 2022 might have the upper hand

Money, the traditional incentive to attract and retain workers, is no longer enough. Employees want more than cash.

They seek flexibility with their schedule, they want bosses who care about them as a person and not merely as a worker, they crave being valued, and to join a workplace culture that is human driven and not profit centric.

“It is not just about money. The more important issue is do people want to be in your employ, is there a growth path for them, do they believe in the mission of the organization. I think that is particularly true of Gen X and Gen Y more so than baby boomers,” said Tim Murrill, executive director of Solano Small Business Development Center.

He believes the difficulty to find enough employees “will be the No. 1 issue for small businesses for the next decade.”

Cynthia Murray, president/CEO of North Bay Leadership Council, told the Business Journal, “What we saw and heard from employers is that there is an increasing concern about the struggle to fill jobs. It is resulting in the need to recognize workers have more bargaining power and employers need to make some adjustments.”

The National Federation of Independent businesses has conducted 20 studies of its more than 300,000 members—14,000 of whom are in California—since the pandemic started, with the latest numbers coming out in October.

Those results show 48% of small employers are experiencing moderate to significant staffing shortages, while 24% have mild staffing shortages.

Business owners’ solutions, according to the study, include:

• 42% offering more hours to part-time employees;

• 67% offering overtime to full-time employees;

• 91% of owners working more hours;

• 39% adjusting business operation hours;

• 35% introducing new technology to enhance productivity;

• 34% reducing the variety of goods and services sold.

Businesses learning to cope

Industries that cannot accommodate remote workers are struggling the most to have full payrolls.

Among those facing this new reality is the Vintners Resort in Santa Rosa.

Needing 200 employees to be fully staffed, but working with only about 130, the resort has closed its restaurant and spa two days a week.

“In the last few months we have had the opportunity to hire in front of the house. The back of the house is the one holding us back from expanding, specifically cooks, dishwashers and kitchen management,” Percy Brandon, general manager of Vintners Resort, told the Business Journal. “We get applications from people who tell you they don’t want to work nights, weekends or holidays. And they have options. They can go somewhere else to that job.”

The resort has raised wages and increased benefits for some employees, but Brandon said guests are only willing to absorb so much of those costs via higher prices on rooms, spa services and menu items.

He believes the government is to blame for some of the woes. For starters, Brandon would like policies in place to help with child care. He also said tax credits and government incentives are not helping get people back into the workforce.

At Midstate Construction in Petaluma the mantra has long been to hire engineers right out of college, train them, and provide people with a lifetime career. This has helped to develop a culture, a work family, where people want to stay for years and years.

Even so, job site superintendent is one position company president, Roger J. Nelson, is having a hard time filling.

“It’s a skilled profession that was already aging out. And now there is a great deal of void in the marketplace,” Nelson said. “You have a reduction in the number of people who can do the work and an increase in the amount of work being done.”

Midstate has had such a good year that four office people have been added to payroll. The company has almost 70 employees.

“As far as money goes, it is a sellers’ market when it comes to labor. They will be able to command higher compensation than they have in the past,” Nelson said. “We address each individual based on their needs, abilities and what their circumstances may be.”

Proving money isn’t everything

Long before the pandemic hit nearly two years ago, Don Rickard’s secret to finding the perfect employee for Platypus Wine Tours was the wording of his help wanted adds.

“I will talk as much about what we are and what the culture is and how fun it is to work here rather than spend all that time describing the qualities I’m looking for and limitations of who should apply,” Rickard, who has owned the Napa company for 17 years, said. “I let people get inspired by what we are; with the hope the right people will apply based on getting excited about who we are.”

Winter is the slow time of year for his wine tours in Napa and Sonoma counties. Even so, what he is doing differently is looking for employees now instead of waiting until spring in hopes that he will be fully staffed when the tourists descend on the area.

He has managed to keep about 80 percent of his staff. In part he attributes this to checking in with everyone when the government forced businesses to close in 2020 because of the pandemic. He told them he was holding their spot for them.

Platypus has about 60 employees, with the need for 15 more guides starting in March. Rickard expects 2022 to be a good year, saying there is pent up demand to get out and play.

His approach since the business was founded has been to create a place employees looked forward to going to each shift.

“We also bend over backward to accommodate people’s scheduling needs, and structure work so it’s fun and not stressful,” he said. This is something they did pre-pandemic.

While volume has been down for 2021 compared to 2019, revenues are about the same. This has to do with the company becoming leaner and more efficient during the pandemic by getting rid of buses and consolidating tours. Fewer buses meant not having to pay insurance, storage, maintenance and other costs.

Good timing for college students

In the current work world and the forecast for 2022, what has changed as well is who employers are hiring right out of college.

“We are seeing more employers being flexible in skills and job requirements,” said Courtney Budesa, director of internships and professional development Barowsky School of Business at Dominican University of California in San Rafael.

More employers are willing to onboard someone with decent soft skills as opposed to someone who can check off all the boxes on how to do the actual job.

Soft skills include getting along well with others, showing up on time, dressing appropriately, thinking critically, and communicating well.

Not needing all the hard skills is allowing college graduates with the right work ethic to join the workforce more easily.

“We do expect students to be able to find jobs at a higher level than they normally would be able to do. Employers are able to take someone with the right attitude,” she said.

Shining a light on the future

Dominican’s Budesa expects for at least the first half of 2022 employees will still be able to dictate what they want from employers, especially with salaries, benefits and flex time.

She also predicts hybrid work environments, where people work from home and go to the office, to be a reality for the indefinite future.

Replacing humans is another solution to the worker shortage.

Murray with the North Bay Leadership Council said, “Those industries impacted now by not being able to get workers you will see an increase in automation. Not so much in office jobs, but there will be a bigger push for automated customer service. We will see it first in public facing jobs.

“The thinking is with an increase in automation we create a lot of new jobs.”

Those jobs will be related to what keeps those instruments of automation functioning.

Joe Madigan, CEO of Sonoma-based Nelson Staffing, also believes automation could be a solution, but cautions it’s not as simple as flipping a switch. He said the more innovative companies have been doing this for the past five to 10 years as it’s gotten hard to find talent in the North Bay.

Restaurants are using robots to cook and they have kiosks for people to order food. Hotels allow for self-check ins. Automation, though, isn’t necessarily about replacing people on the front line. It’s also about using technology as a way to streamline operations; it’s about efficiency.

Madigan said employers need to adapt to what workers want. He said the No. 1 reason people used to look for a new job was compensation. Today, he said the primary impetus to switch jobs is to find greater flexibility in terms of when and where they work.

“Especially in the North Bay it’s not about compensation, it’s is my employer going to be flexible,” Madigan said.

Madigan said the questions employees are asking as they look for jobs include: What is a company’s diversity, equity and inclusion policy? Do they offer benefits like gym memberships? Is time off given for philanthropic endeavors? On the spur of the moment can they come in late if there is a child care issue? What is the flex time policy?

His firm, which helps companies efficiently build and manage their teams, has 210 employees in 11 states, with more than 400 clients in 32 states. North Bay offices are in Fairfield, Napa, Petaluma, San Rafael, Santa Rosa.

“Employers have been so used to people knocking at their door. Now those scales have completely tipped. Now employers are doing the selling and wooing of potential workers. We haven’t seen that in our lifetime. It’s not going to change. Look at the demographics. The population is not growing. There’s a worker shortage combined with the great resignation,” Madigan told the Business Journal.

“I think organizations should have a pulse on their employees. The No. 1 issue if I was CEO of any organization, is how do I retain my greatest asset in 2022? Are we listening and are we going to make changes? If you are not listening, you will fall behind.”

Another conundrum for the North Bay is that the pool of workers is dwindling because so many have retired and it’s with it so expensive to live in the region younger people are not moving here to take the place of retirees.

Madigan is having a hard time recruiting people to the North Bay for clients because of the cost of living, commute times and wages. While, he said, people from the Silicon Valley and San Francisco are headed north, they are keeping their jobs as remote workers, which doesn’t help local employers.

He said manufacturing and distribution are industries he’s seeing struggle because most workers need to be onsite.

“I’ve seen some companies go to different shifts and ones that are more accommodating to child care. These are hot button issues for employees and employers to be able to retain their workforce,” Madigan said. “This has been a candidates’ market for two years and will continue to be. Companies need to listen more than ever to what their employees need.”