Feature Stories - August 2006

Help Wanted

Workforce Issues in Nevada

by Kim Becker

By the end of this decade, the Bureau of Labor Statistics predicts there will be 10 million jobs available nationally with no workers to fill them. Nevada is already feeling the crunch in its workforce.

The most critical worker shortages are in industries such as medical, construction, engineering and education, which doesn’t surprise Douglas Geinzer, founder of Recruiting Nevada, a company that provides recruiting solutions to Nevada employers through its 10 industry-specific Web sites.

“In most industries, it’s purely a matter of supply and demand,” said Geinzer. “For example, based on the number of new hospitals opening in Southern Nevada, there are 1,200 nursing vacancies each year, but our educational system produces only 600 new nurses annually. As a result, we must attract qualified professionals from other markets. The workers we need to attract tomorrow do not live here yet.”

Feeling the Effects of Growth

Nevada’s unemployment rate is approximately 4.0 percent, which Geinzer said indicates that everyone who wants to work is working, leaving only the so-called “unemployable,” defined as individuals who don’t wish to work. He expects the shortage of qualified workers to continue as employers scramble to keep up with Nevada’s rapid growth.

“Right now, $25 billion in development is taking place on the Las Vegas Strip. In fact, 7,200 construction workers are needed just for the 60-acre Project CityCenter. When complete, the project will create 20,000 full-time jobs. It’s the single largest job creation Las Vegas has ever seen,” said Geinzer. He also pointed out that for every hotel room on The Strip, 2.5 jobs are created, which in turn creates the need for two additional jobs outside of The Strip to service those residents.

And there are plenty of other construction projects in Northern and Southern Nevada competing for workers, in addition to those needed in other vital sectors of the economy, especially healthcare.

Help Wanted

An employment outlook survey conducted by Manpower, Inc., a company that offers staffing services to employers in 4,400 offices and 72 countries, indicates Las Vegas area employers expect to hire at a healthy pace during the third quarter of 2006. From July to September, 30 percent of the Southern Nevada employers surveyed plan to hire more employees, while only 10 percent expected to reduce their payrolls. Northern Nevada numbers were even better, with 53 percent planning to expand their workforce, and none planning to reduce it.

“There is a definite shortage in specific industries, like medical and construction, especially with our rising population,” said Andy Katz, president of Manpower, Inc. of Southern Nevada. “The need for trained medical help is vital.”

In the construction industry, Katz said as a result of rising land prices, homebuilders are looking for less expensive land in outlying areas 60 to 80 miles away, and are recruiting people to work in those outlying areas, as well as in Arizona.

“Fewer people are available for work,” said Katz. “Homebuilders will take entry-level workers with a willingness to learn and a strong work ethic and actually train them on the job. These same homebuilders are also working on some creative incentives for employees who are committed and stay with them for a few years, such as putting up a down payment for a home. They are creating solutions to help with retention and recruitment.”

Another problem facing the construction industry is the cannibalization of talent. “Project CityCenter has attracted all the mid-level workers, such as framers and welders, so there are not that many skilled workers left for other sites,” said Geinzer. “As a result, local companies can’t bid on new projects simply because they don’t have the workers they need to get the job done. This creates a scenario in which out-of-market companies come in and bid, get the contract, and then discover too late that the labor pool is simply not available. This causes projects to run over budget, or even get cancelled altogether.”

Geinzer thinks the local construction industry must come together to solve worker shortages – something he believes can be done with cooperation. “It’s an industry-wide problem. When they stop cannibalizing talent, retention will stabilize.”

The same patterns are apparent in the healthcare industry, reflected in Nevada’s dismal nurse-to-patient ratio (547 per every 100,000 residents, according to Geinzer), which is the second worse in the nation, second only to California. When a new hospital opens, it might offer nurses at the hospital down the street $1 more per hour to recruit them.

“But that only solves short-term needs. The first hospital might match the $1 per hour and add a $500 sign-on bonus. It’s a cycle of stealing, and ultimately the cost of that is passed right back to the consumer, while the quality of care goes down,” said Geinzer. “A hospital CEO recently told me that the cost to replace employees is 10 times higher than the cost of recruitment. It really is a vicious cycle.”

Welcome to Nevada

It is apparent that recruiting talent outside of Nevada is critical to meeting the growing workforce shortage. Geinzer’s Web sites are recruitment outlets that advertise employment opportunities within the state, yet do not allow out-of-market firms to recruit members of Nevada’s current workforce.

“Recruiting is not difficult, because Nevada is a very desirable place to live. We offer a quality of life here that is better than or parallel to anywhere – we have 330 sunny days every year, everything is within close proximity and there’s no state income tax,” said Geinzer. “The fact that we don’t have a state income tax really resonates with California residents, who pay about 40 percent in taxes.”

Based on a cost-of living-index, Geinzer said a San Francisco Bay Area resident earning a $100,000 annual salary could sell his home and move to Las Vegas to accept a job paying about $65,000, while still maintaining the same quality of life.

“We target a lot of empty nesters,” said Geinzer. “They’re sitting at home in Cincinnati, the house is quiet, the kids are in college or have moved away. They’ve outgrown their four-bedroom home, they’re tired of the weather, and the local economy is in the gutter. Why not move to Nevada to enjoy the quality of life we have here – the entertainment, the shopping, the opportunities?”

Katz agrees it is very easy to sell people on Nevada. In fact, Manpower, Inc. of Southern Nevada capitalizes on Las Vegas’ sunshine during the winter months to great advantage. “When there’s snow on the ground elsewhere, we’re on the phone recruiting,” said Katz. “We promote a career path. For example, if you move here, a job in the hospitality industry might pay lower than what you’re used to, but you can receive training and improve yourself. On a career path here, you can move up with greater opportunity and, eventually, a higher rate of pay.”

Connecting Workers and Employers

Both employers seeking workers and prospective employees (in Nevada and out of state) can take advantage of the wealth of resources available at Nevada JobConnect.

Nevada JobConnect oversees and provides workforce development services to employers and job seekers in Nevada. For employers, the organization offers recruiting, retention, training, retraining and outplacement services, along with information and labor market statistics. For job seekers, it offers career development information, job search resources and training programs. The primary services offered by Nevada JobConnect and its network partners are funded by federal tax revenue and are generally available at no cost to the applicant.

“We’re finding that skills training is more critical than ever before,” said Sandra Pollock, supervisor in the employer services office at Nevada JobConnect. “For example, many employers in the hospitality industry prefer applicants to apply for jobs online. But there are many workers who simply do not have the skills to do so. We offer programs that help pay for basic computer classes so the worker can apply and then gain the computer skills necessary to work within the industry.”

While the organization provides valuable resources to prospective employees, it still comes down to available workers versus available jobs. And often the two are vastly different. “It really is a double-edged sword. People lacking basic skills need jobs the most, but most of those jobs are already filled,” said Stan Scott, office manager at Nevada JobConnect. “Most of the openings are for higher skilled jobs, but workers lacking basic skills aren’t qualified. That’s where our programs come in handy.”

Nevada JobConnect is also the liaison for federal programs in Nevada and federal training initiatives, including America’s Job Bank (ajb.com), a component of the CareerOneStop, a collection of electronic tools managed as a federal-sate partnership. America’s Job Bank enables employers to post job openings available to people across the nation, and gives individuals the opportunity to post their résumés. A tool called Résumé Scout enables employers to search through posted résumés to find prospective job candidates.

A Roadmap to Success

The Nevada System of Higher Education, which includes eight state colleges and universities, is also taking a proactive role in helping develop the state’s workforce. Management Assistance Partnership (MAP), a collaboration of the university system and other partners, works directly with Nevada industrial companies to strengthen their global competitiveness. It accomplishes this not only by helping companies adopt more advanced technologies, techniques and best business practices, but also provides workforce training.

“Our focus is chiefly on manufacturing, mining and construction companies,” explained Sandy Haslem, director of MAP. “We visit them to assess their needs and then bring in the resources they require. If they need training – for example, in forklift operation, computer skills, management or industrial maintenance – we work with the local community college to provide classes. If they need training that’s not readily available, we can bring in outside experts.” She explained that MAP’s consultants stay on after the formal classes are finished to make sure employees know how to properly apply what they’ve learned. She estimated 60 percent of MAP’s projects are related to training.

The community college system, with branches in communities across the state, can be an important partner in helping train employees. Whether a company needs to train workers to speak English as a second language, make sure vehicle drivers know required safety procedures, or instruct employees in high-level technical skills, their local community college can offer assistance.

According to Debra Solt, director of Community College of Southern Nevada’s (CCSN) Division of Workforce and Economic Development, there are no better leveraged resources than state resources. “One of our primary missions is workforce development,” said Solt. “Our 11 workforce specialists work directly with businesses and individuals to find solutions in all occupational areas, from hospitality to manufacturing.”

Solt said the first question a company asks when considering relocation or expansion to Nevada is, “Where will we get our workforce?” She explained, “We have ‘revolving door syndrome’ in Nevada, with people constantly moving from city to city and job to job, and turnover is very costly in any market. At CCSN, we help develop a talent pool and a selection pool of people with the capability to learn and grow within an organization. It not only helps the company retain its employees, but it also helps the individual develop a buy-in to our community.”

A Growing Disconnect

Although many employers are taking advantage of available resources and doing the best they can, for others their best simply may not be enough. According to a study released by Spherion Corporation, a North American staffing and recruiting company, many employers are not taking the steps necessary to retain existing employees and attract top talent from the shrinking pool of available workers.

Spherion’s “2005 Emerging Workforce Study”, conducted by Harris Interactive, surveyed a nationally representative sample of U. S. employers and workers to examine workplace issues. Findings reveal that just 35 percent of human resources managers cite turnover/retention as a key concern, and the average company expects it will experience a 14 percent turnover within the next year. However, the study shows that more than half of all workers think their companies are not taking adequate steps to retain them. In fact, nearly 40 percent of employees plan to leave their jobs within the next year.

Developing the Existing Workforce

Some companies are proactively creating solutions to nurture their existing workforce. MGM Grand Hotel and Casino’s efforts have earned the resort national recognition. Most recently, the resort earned a spot among America’s leading companies for human capital development by Training Magazine. In March, the magazine ranked MGM Grand University 29th in the nation.

To qualify and contend for ranking, companies had to submit a comprehensive application detailing training and development programs, number of hours dedicated to employee training, and overall return on investment and rewards. Ranking was also based on financial commitment, programs and methods of evaluation. In its first submission to the magazine, MGM Grand ranked higher than companies such as Starbucks Coffee Company (ranked 91), Delta Air Lines (ranked 80) and American Express (ranked 31).

Established in 1993, MGM Grand University researches, benchmarks, develops, implements and evaluates learning programs to maximize employee performance. It offers programs that provide advancement opportunities at all levels, ranging from management to life skills training.

“Our curriculum has helped more than 25 percent of our workforce receive promotions and transfers during the last two years alone,” said Barbara Hewitt, executive director of MGM Grand University. “The university helps to move back-line employees to the front of the house, move laterally or promote through broad-based training – whether it be through interpersonal skills, technical skills or other skill sets.”

Programs include REACH!, a partnership with Nevada Partners and the Culinary Training Academy, which puts employees through a six-month course to prepare them to become supervisors, and the Leadership Institute program, which gives employees at director through vice president levels a global perspective of the company.
Hewitt said what MGM Mirage is doing is very much forward thinking. “It’s what Fortune 500 companies do. Financial capital is important, but you must invest in human capital to be successful,” she said. “The only way to be the best is to have a workforce that is skilled, retained, valued, enjoys what they do and has better opportunities.”

In addition to its percentage of promotions and transfers, MGM Grand was also recognized for keeping employee turnover at a surprisingly low rate – 9.7 percent annually among full-time employees, compared to approximately 30 percent at other resorts on The Strip and an average of 49 percent in the hospitality industry overall.

“The university is especially beneficial for line-level employees who would love to improve their income or move to a more front-line position, but lack computer skills or have a language barrier,” said Hewitt.

Looking Ahead

Workforce experts like Katz and Geinzer don’t have crystal balls, but they predict there will be no signs of slowdown for Nevada. “I see more of the same for at least the next few years,” said Katz. “There will be a lot of job creation, but a lot of employee creation, too.”

Geinzer expects the next few years to be very big in terms of growth. “Nevada has led the nation in job growth for the third year in a row, and for the 10th time in 15 or 16 years,” he said. “Our state as a whole has the largest job creation in the nation, and that trend is going to continue well into the future. The next few years are going to be huge.”