Nevada’s Staffing Firms have had front row seats to one of the most troubling aspects of this economy: unemployment. Despite that, they have found more and more employers are hiring and a demand for skilled workforce has remained strong. Recently, executives representing this industry met at Holland & Hart’s Las Vegas office to discuss staffing in Nevada and what is expected in the future.
Connie Brennan, publisher of Nevada Business Magazine, served as moderator for the event. These monthly meetings are designed to bring leaders together to discuss issues pertinent to their industries. Following is a condensed version of the roundtable discussion.
What areas of employment are in high demand?
Michael Park: The IT (information technology) industry seems to have bounced back. It’s challenging to find individuals with certain skill sets that are matching that. It’s an interesting dynamic for all of us. When we see things change in our economy there are businesses that boom. The medical and legal industries have obviously increased with their needs. It seems to me those two things go with how our economy has worked, but I have seen a very big bounce back in our IT marketplace.
Jennifer Dehaven: I agree 100 percent. It’s just finding the candidates. If you want to point your kids in the right direction, point them into IT definitely.
Sara Allred: It’s security.
Dehaven: Also, IT in healthcare is a really big one.
How competitive is this industry?
Park: Our industry had given people who were in upper management the opportunity to start their own companies and get involved. Then the economy changed and there were companies that couldn’t survive these times. Our competition level amongst companies has shrunk.
Bob Daniel: I agree. You really have to have had some structure behind you in order to have survived the downturn. So there has been a shake out. We all play nice in the sandbox. However, we do compete vigorously. At the end of the day, we all make sure that we’re providing the best available talent to the client.
Damian Garcia: It speaks a lot for the team and those managers to have made it through the downturn and still provide quality candidates. So, opposed to the pointing fingers or throwing food across the table, we know, just by being around, a little bit about our business. We can respect that and still have healthy competition.
Tim Menifield: With the challenges we were forced to look at, we had to do some retraining. A lot of things changed. Legislative structures forced companies to take a look at revenue streams. Keep in mind, the competition is not just within this room. It’s with some intrinsic items, things along the lines of tax legislation that make things more challenging. You have to look at what has happened to the overall economy and what that has forced businesses to do.
Will unemployment numbers get back to single digits?
Dehaven: I don’t know about single digits.
Frank Woodbeck: It went down 2.3 percent from 14.9 [percent].
Allred: So optimistically, let’s hope we can match that again. I would love to see that.
Woodbeck: The two largest segments of unemployment are construction and hospitality. The construction industry lost about 94,000 jobs during this recession and 12 percent of our employee base was there, the norm is five. It’s going to vary, but 60 to 80,000 of the unemployed are in the construction industry. So we’re looking for ways in which we can retrain those folks and redirect them into other areas because construction is not going to come bouncing back in the next half decade. It’s very difficult to attack that 12.6 unemployment number in huge bites with that core still being there. It’s a tough one.
Do you have to go out of market to fill positions?
Dehaven: Absolutely. It’s just a matter of looking at the ratio of the people that have the right certifications and degrees to fill what is absolutely becoming a growing demand here.
Garcia: The work force out there is not matching up with what our clients still need. That trickles down to a lot of different functional roles, but the more specialized areas are where the challenges are. That is where we are having a hard time finding the best, because they are at three and a half, or four percent unemployment.
Woodbeck: One of our largest challenges over time has been choosing what to provide training in. We’re trying to create demand and market driven programs as well as certification programs. With investment of development and training resources into other programs like this we move forward. We’ll transfer some responsibility for this investment from reserving funds that we’re trying to use into all Workforce Investment Act funds.
What kind of incentives does Nevada offer employers?
Woodbeck: We launched the Silver State Work Program to serve employers looking for individuals with certain skill sets. It allows them to interview and train employees over a period of time and keeps them on the unemployment rolls. During that time we provide up to $2,000 per employee to help in training. We have about 860 people that we’ve put through this plan over the past six months since it launched in July. It’s been very successful. Secondly, there’s a program called Training Employees Now in which we subsidize and join with the company in the training of new employees. Also, if a company is expanding they can come back to the Economic Development Commission and gain training funds for their expansion. There are a variety of ways we can work hand in hand and incentivize a company.
Garcia: I think Nevada does a great job when it comes to Nevada Job Connect, the state works program. As incentive for empoyers to bring their business in here and because there is plenty for Job Connect to do in helping employees and making it attractive for employers to do business in Nevada. Even if they get their people through the Nevada Job Connect, they will probably need a few people that are more specialized and that may be one of the things our firms can help with.
How has the internet affected your industry?
Park: It has a dramatic effect and is a huge challenge. We’ve gone from the paper world into technology world with about 90 percent of companies having online-applications. There are 94,000 construction people who are probably used to a paper application process. Some of the challenges and phone calls that come in say, “Help, where is the drop down, how do I move from this aspect in doing that?”
Allred: Social media has had a big impact. There is a lot more information about people including myself. Employers can actually prescreen and look at your Facebook page, not just LinkedIn, which has been a wake-up call for a lot of people.
Hall: We’re seeing a lot of claims dealing with privacy issues and possible discrimination. The National Labors Relation Board is really tightening on that. We’re seeing a lot of issues with privacy and helping guide companies in what they can look at and what they can’t. Also, if on-line applications are being used, companies must remember to make sure they are making applications accessible for the disabled, like the blind, for example.
Daniel: This is a whole electronic dynamic. As staffing agencies we have to be cognizant of what we do to utilize the tool that particular candidate would like to communicate in or with, whether it be email, text or home phone. We’re trying to fit in to this electronic world.
Garcia: I think it’s an education for the candidates looking for work. They have to understand that they’re branding themselves with everything they put on-line. It’s not just a resume anymore. They still put things out there and they are just not getting calls anymore. It’s an important education for those applying.
Hall: The basic law on the social media issue is, if it’s available publically, in other words, the employer doesn’t make a trip to become a “friend”, then they have the right to look at it. That is the basic law in Nevada. Now, there is a different law in different states. If they make it available and someone can Google it they can look at it. Flipping hats on the other side, from an employer perspective, there is dangers in doing that. I try to lean my clients into not doing that until after they have done a conditional offer.
What is the most common mistake employers make?
Hall: The most common mistake is wage and hour issues because the statutes are so complex and difficult. A recent study found that only 10 percent of Fortune 500 companies were in full compliance with wage and hour statutes. So it’s really hard for small and mid-sized companies to fully comply. What we see the most of right now is discrimination retaliation, age and disability discrimination cases. They are going through the roof. We’re seeing a ton of that and not finding a lot of merit to it, but there are a lot of people when they don’t have a job and they are laid off, they don’t understand, they think it’s unfair, they make claims. It doesn’t mean its discrimination, but we’re seeing tons of claims from that.
Daniel: Are you seeing any cases on wages and hours come up?
Hall: All the time. The second fastest growing area in employment litigation behind discrimination retaliation is wage and hourly. We’re seeing a ton of class actions. Nevada has a very unique hour and wage structure. We have an eight hour day, 40 hour week, one and a half times minimum wage and you don’t have to pay it. It’s hard for employees to grasp. I could have the exact same employees, one qualifies and one doesn’t and they are in the same position. The idea that one gets minimum wage is difficult and easily missed. So wage and hour is the place where it’s easiest to make mistakes.
Dehaven: In our industry it’s changing every week. So it’s very difficult to put into two different classifications.
What is the advantage of using a staffing firm?
Andy Katz: It’s flexible for employers and companies to use a service rather than committing to permanent staff at this point, because who knows what the economy is going to do. There is positive signs out there. We all feel it’s the worst it’s going to be, but while it’s growing, while companies are seeing positive signs, bring in the flexible staff before they commit to hiring on permanent.
Dehaven: Not only that. We all have the peaks and valleys of business and industries, so that is where temporary staffing helps fill that gap without making permanent employment decisions. You can bring in a temporary work staff that will help fill in those gaps. That is the beauty of it.
Garcia: As we look at the cost factor, would you rather have us doing it for you and bill you hourly or have someone who makes $60 to $70,000 take 10 hours a week to fill one spot. You have to weigh both costs.
Daniel: There is a reason why you get large companies like NV Energy, Southwest Gas, IBM, Xerox and other companies using staffing companies like ours for long term placements. I mean for individuals that are on assignment for a year, two years and so forth. It’s because it’s inherently less expensive to use a staffing company than it is for them to bring on an employee on either a direct hire basis or permanent. They are not bearing the cost of health plans and all that other stuff. So when you add all those things together, they are very positive reasons why I would encourage companies to utilize staffing companies.
Park: I want to take it from another side, why an employee should really look at a staffing company. I’ve trained my people everyday to ask if they are registered with other companies. Why wouldn’t you register with three others? That means that you have three or four recruiters who are proactively looking just for you. That opens the tight market. I have always encouraged that. They can be at home, take 20 to 25 minutes per company to register, next thing they know they have more opportunity in front of them.
What do you find is the biggest frustration for a business when hiring?
Allred: I would say work ethic; finding someone who is going to be reliable, on time and that really goes the extra mile. That sounds shocking given the state of the job market, but it’s still true. There are still no-shows happening. I’ve seen it across the board, on an eight dollar an hour warehouse worker up to a $50,000 a year accountant.
Menifield: In my observation when companies are going through a dire time with the economy they retain all the good employees with good work ethics. The first that were let go were the ones considered expendable for the reasons mentioned.
Hall: I can tell you from personally working with companies during layoffs, that when they come in and say we’re doing layoffs and here is our selection criterion, it’s almost always based upon some evaluation that there’s a reason to cut them. We have to always watch out for discrimination in age, particularly as it relates to salary. There is a correlation between the high salaries and age and they often run into a problem where they cut too many by age. That is always a rough thing.
What questions should a business executive ask when looking for a staffing firm?
Dehaven: It really comes down to who you’re looking to hire and what kind of assessments need to be given to make sure they are getting the right person for the job. There is a lot of under-skilled and also a lot of skilled individuals that are out there. So it’s a matter of going through and understanding which assessments are necessary for the open positions that the client is coming for. Some of us are more equipped in certain industries with those assessments than others.
Park: A Fortune 500 company isn’t going to ask the same questions that a company in the private sector is going to. The private sector is going to ask questions about skill sets, how quickly this person can be here and how dependable they are. The bigger companies are asking questions like metrics, turnover, retention and all those tools. At the end of each quarter they want a report that tells them, out of the 300 people you provided our company, what is making them stay here, what is driving them away. Each client is going to be specific on what they are wanting from any staffing company.
Garcia: In order to make a good match I ask my employers to be sure of what they want and be specific in details. It goes back to partnering with a business. They see value in what we do. They will spend their half hour with us to get into the details of what they are looking for. It makes all our jobs easier. Employees get there and are skilled and matched well with their employer. We can actually have a win-win scenario. Investing time is important. You can’t just open the phone book and ask what the rates are. We get those calls everyday. We won’t even offer rates because it’s not what we do.
Daniel: The one question I would ask is what your value is. That is something that all of us are communicating here, that value of using a staffing. There are a myriad of reasons for that. A client wants to know what is in it for them: what you are bringing to the table, what you are going to add and what are you going to take off my plate?