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Originally Posted by MTI
I take it, and I could be wrong, that you're not in immediate danger of losing those experienced employees due to their perceived low compensation levels? They aren't going to "jump ship" to a higher paying competitor, otherwise you might consider increasing their wage/benefit package or offer some other form of recognition.
The labor market is in business' favor at the present. As reported in the news, larger companies have cut their largest cost component, human costs, and despite lower sales revenue, have maintained or increased their margins and are sitting on fairly large cash reserves, and the qualified ones have the ability to obtain very low interest loans to add to capital.
Is it really regulatory or tax risks that is preventing hiring, growth or expansion? Or is there a sizable component of "who are we going to sell to?"
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Probably not. Our benefits package is better than they're going to find anywhere else (we're currently paying 75% of their premiums but in the face of a 20% HC increase we may have to shift 2.5% more to them) and their pay is still in the neighborhood if not higher than they're going to find elsewhere. Keep in mind, I'm talking about our general labor crew. Some never graduated high school, some have GED's. We've offered to pay for GED classes for those who don't have them and continuing education for those with GED's and have gotten none...zero...of them to take us up on the offer. I would love to move them up on the ladder (on the pay and the responsibility scale). But there are no signs of initiative from them to do so. So as a result, we hire qualified candidates with room to grow and the others get left behind. The days of longevity raises are gone. I'm more than willing to pay well for taking on more responsibility and independence. They want the "paid well" but don't want to do anything more for it. I have one who is sharp enough to handle it and will take it upon myself in the coming year to push him a bit harder, convince him that he is more than capable and reward him for it.
On the other side of the equation, there's a strong disincentive in the state of CT to firing or laying off employees. Get one or two and the unemployment reimbursement goes through the roof. And just to give you an idea of how the system here works, we had an employee retire after the summer of '10. All of the paperwork was filled out and filed in a timely fashion. The former employee filed for unemployment this spring. Our HR manager attended the hearing, provided all of the required paperwork, there was no question the employee left on good terms and of their own volition. They were still awarded unemployment compensation. Sometimes it's easier to put up with some of them than it is to get rid of them.
Overall, we are well positioned for the recovery when it happens. We've hired a new sales rep to cover an comfortably-expanding territory for us (thanks to the big national distributors dropping the ball) and two mid-level managers (much to the chagrin of the hourly employees-however it's due to the impending retirement of one of the principals who has decreased his hours and compensation by half, thereby increasing the hours and compensation of everyone below him). We are diversified enough so that even though things are not great right now, we're still employing everyone, paying all of the bills and making some money. A lot of folks are hurting right now so the last thing I want to sound like I'm going is complaining. If it does, it's absolutely not my intention.