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Laborers In Demand This Labor Day: Companies Add Wages, Flexibility

Michael E. Kanell The Atlanta Journal-Constitution

WWR Article Summary (tl;dr) As Michael Kanell reports, "Many companies are leaning into hybrid work arrangements — in the office sometimes, at home others — while offering more malleable hours and dangling bonuses and higher starting pay for lower-wage jobs."

Atlanta

It’s an unusual Labor Day. Workers are in demand but relatively scarce, enticed by incentives but scared of infection, constrained by childcare needs, while attracted by a more elastic workplace.

And while there are worries that the latest wave of the coronavirus will undercut the jobs expansion, at least for the moment, hiring is healthy, giving workers more choices and more leverage than they have had in quite a while.

“There is a talent scarcity,” said Anjanette Johnson, Atlanta-based area director at Randstad US, a staffing firm. “It’s just hard to find talent. And because of that, companies have to be much more flexible.”

Eighteen months into the pandemic, financial disparities between the lower echelons and top executives are still enormous, and many full-time workers do not make enough to afford median rents in some metro areas.

But after hearing how essential they were when so many white-collar employees were stuck at home, front-line workers are seeing more generous benefits and pay, more options on hours and fewer requirements.

CVS, the national drug store chain, announced last month it would no longer require a high school degree for entry-level positions. Amazon said it has stopped testing job seekers for marijuana.

Many companies are leaning into hybrid work arrangements — in the office sometimes, at home others — while offering more malleable hours and dangling bonuses and higher starting pay for lower-wage jobs. In call centers, where clerks often make $11-$13 an hour, the pay is up $1-$2 an hour, Johnson said. “Pay rates have to go up. It’s a tight market.”

A number of big companies — Target, Walgreens, Walmart and CVS, too — have declared $15 per hour their new base, which pressures others to raise their own pay. And it’s not just big, profitable companies that must respond.

Starting Labor Day, the Frazer Center in Atlanta will lift minimum hourly pay to $15.

The move, which will add $250,000 to its $4.7 million budget, is needed, said Paige McKay Kubik, chief executive of the nonprofit that works with adults and children with disabilities. The center has been understaffed and its employees stretched thin, adding urgency to what should be “an industry-wide sea change” to make pay fairer, she said.

“We can’t wait for a federal minimum wage mandate,” Kubik said.

Hire Dynamics, a Georgia-based staffing company, which places thousands of workers in manufacturing, office and logistics, has seen the same tilt in those sectors, said Jon Neff, chief operating officer. “Workers are in the catbird seat.”

TireHub has recently opened a distribution center in Kennesaw with 22 employees. Starting pay is $16.65 an hour, plus a $1,000 sign-on bonus for new employees, as well as medical benefits and matching contributions to a 401(k) account.

“We are still hiring ... with 10-12 positions we hope to fill soon. Hiring has been a challenge,” a TireHub spokeswoman said.

In July, wages nationally were up an average of 3.7% from a year earlier, making it one of the five strongest months in more than a decade, according to the Atlanta Federal Reserve. People who switched jobs did even better, averaging a 4.4% raise, said the Fed.

Pay hikes have been most pronounced at the lower-wage end of the labor market. Many of those jobs are front-line work, placing employees in harm’s way.

Forty-two percent of U.S. workers are worried about returning to the workplace for fear of contracting COVID-19, according to an August survey by the Conference Board. In June, before the latest surge in cases, only 24% said they had that worry.

But in white-collar work, too, flexibility has become a crucial perk in luring new employees, said Tara Flickinger, a partner at ON Partners, an executive recruiting firm.

It’s not just the ability to work from home or to juggle childcare, she said.

“I don’t think that the office as we knew it or the workday as we knew it will ever go back to the way it was before the pandemic,” she said. “A lot of companies are not even requiring relocation, because the companies offering the most flexibility will get the best talent.”

More than one-third of workers in the Conference Board survey said they might leave their jobs within the next six months in search of more flexible work arrangements. Those taking the survey put flexible work as their top priority, slightly ahead of better pay.

Child care shortages and uncertainty over in-person schooling are a big factor. Women with very young children made up 10% of the prepandemic workforce, but accounted for nearly 25% of COVID-related job losses, according to M. Melinda Pitts, director of the Center for Human Capital Studies at the Atlanta Fed.

As the economy rebounded this year from the pandemic recession, demand for services was up and hiring was robust, while layoffs and unemployment declined. Yet the news is not good for all workers in all sectors. In Georgia, the economy has seen the addition of more than a half-million jobs since the depths of the pandemic-triggered shutdowns, but the expansion has been uneven. The leisure and hospitality sector is still 30,700 jobs from its pre-pandemic level. That includes a 7,100-job deficit in hotels and a 3,900-job shortfall in personal and laundry services, like maids, according to Mike Wald, a former BLS regional economist.

Health care, where non-COVID procedures have often been delayed, has lost 7,000 jobs, he said. Overall, the rebound is still 94,400 jobs shy of its pre-coronavirus level. Filling that gap shouldn’t take long, not if companies get good responses to their many “Help Wanted” signs.

Yet all those bonuses and higher wages are a signal of a problem: Businesses are having trouble filling positions.

It’s a struggle especially for small companies and a potential drag on the recovery, said Gus Faucher, chief economist of PNC Financial Services Group. “The key constraint on near-term job growth will be labor supply.”

For those who have remained in the workforce through the pandemic, there’s a satisfaction in doing a job that helps keep things moving.

“It’s hard work, but I like it,” said Adrienne Cooper, 36, a logistics specialist at TireHub’s new distribution center in Kennesaw, working six days a week as the center ramps up.

Logistics and distribution has grown steadily through the pandemic, fueled by online ordering and the accelerating need to make the supply chain more efficient.

“I do feel valued,” Cooper said. “And what we do is essential. Everybody has a vehicle that uses tires, even if you are riding on a MARTA bus. Without tires, you can’t do anything.” ——— Distributed by Tribune Content Agency, LLC.

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