Human resources is an industry that is constantly evolving. From workforce shortages to the impacts of the COVID-19 pandemic, this industry must be ready to switch gears at a moment’s notice. This meeting of Nevada human resource executives occured prior to the widespread effects of the coronavirus. The executives met at the Las Vegas offices of City National Bank to discuss industry challenges at that time.

Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. The magazine’s monthly roundtables bring together industry leaders to discuss relevant issues and solutions.

DO NEVADA COMPANIES STRUGGLE WITH RETENTION?

Fred Lovingier: To my knowledge, the biggest challenge that we’re seeing right now is attraction and retention. Once you retain somebody, you have to maintain them, you have to develop them and you have to reward them so you can get the long career and the skill set developed.

Carolyn Spoletini: Retention [is an issue], especially with a younger generation entering the workforce. We find that, a lot of the time, they’re willing to leave and jump companies. There’s a lot of jumping from this place to the next and it’s for something as minimal as $0.25. The rest of us that have been in the workforce for a while say, “Well $0.25 isn’t really worth it when I have to get new healthcare, benefits, this and that and change my doctors.” However, when you’re new to the workforce, you might still be on your family’s medical plan and not taking those other things into consideration. We really doing a lot of coaching, from a cultural standpoint, for that generational difference. That’s been a really hot topic for us this year.

Nicki Pecoraro: We get these great colleagues, we onboard them, we get them all ready to go and then, what do you know? Somebody else has a bigger and better offer and we’ve spent a year with them, making them part of our team and getting them to share our vision.

Jennifer Parkhurst: Back in the day, what used to be strong stability was about three to five years on a resume, more towards the five side. Now because of the Gen Zs and Millenials that have come into the workforce, that has shifted. What’s considered strong stability is two to three years at a job. It does cost the employer a lot.

Spoletini: The turnover costs become astronomical when you’re looking at the bottom line and how to retain candidates.

Dr. Tiffany Tyler-Gardner: Compression, in terms of compensation, is a significant issue, particularly as we look at middle skilled workers. In the larger context of the conversation around wage stagnation, [compensation compression] becomes a significant challenge around retention. Some of the strategies we have tried to employ are things like income and worker training programs. What are the barriers to you leveraging those kinds of things as you try to address these types of issues? What might we need to understand, from a governmental standpoint, about the ease of partnering with us and what things don’t we get about this discussion?

Robert Daniel: I don’t know if you have enough time for that Tiffany.

Debbie Banko: I tie [retention efforts] to certifications and education and furthering a person’s career. They’re tied to that for two to three years as part of their compensation. [Retention] can be generational, but I think the younger generation really wants to get out of what they’re doing and into something that is more of a sustainable career.

How important is culture?

Sploetini: I would say culture is actually even more important, to many, than money.

Banko: What does [culture] mean really? Does that mean more education? With some of the generational issues, culture means I can take off work whenever I want to. It means I don’t have to work an eight hour day.

Spoletini: That’s not it. There needs to be an entire plan. It starts with a company’s mission statement, vision, values, code of commitment and code of ethics. Those are the cornerstones of your company. Your culture should really be bouncing off of that and developing. When you have somebody that’s coming into the workforce, particularly someone new, they might be really excited that they can have three days off and bring their dog to work. Somebody who’s 55 might not care.

Jennifer Parkhurst: I think generational differences are important. You have Gen Zers mixed in with [other generations who are] learning how to adapt to new ways. Eventually Gen Zs are going to be making up the majority of the workforce. We’ve seen a lot of changes going on in the office environment. People that have been in the workforce for a while have had to adapt to [different generation’s] points of view.

Lovingier: We opened an office in October of last year. I’m the newest one as we have a start up here. We’re a nationwide company, but decided to come to town. I struggled with culture as well. To me, culture is how people see themselves, how they identify themselves. Who are we? How do we conduct ourselves?

Spoletini: And, how do I fit into this workplace and what is that culture? That is the key.

Lovingier: So, the identity of the office and of the players in that office [is the culture]. That will give you the discretionary effort that can take you from good to great.

Banko: I would agree with that. But, when you’ve had people with you for a very long time who can’t really advance beyond where they’re at, even though they’re valued, sometimes they create a culture that doesn’t work.

Spoletini: Here’s the problem with that, this is your company culture. If you’re not doing anything to actively grow it and shape it, [employees] take control. It becomes a culture of its own and it can go into the left lane here, not where we want it. That’s why culture is such a large issue for many companies. There has to be a lot of conversations around the vision for a company and staff. Every person that comes to the office is a participant and a player in that dialogue.

Lovingier: It’s the easiest thing to get right when you start and the hardest thing to correct thereafter.

IS TRANSPORTATION AN ISSUE?

Daniel: One of the things that I find interesting and challenging is transportation. Transportation is a major concern, particularly in Las Vegas, based on the type of work that we are fulfilling. [This is a challenge] for the state of Nevada as well. One of the things we do from a screening process is, we want to know how an individual gets to work. We want to know their mode of transportation. With our client set, a lot of individuals use public transportation. I’m from the east coast where buses run, what seems like, every 30 seconds. [You can get from] one place to another every 10 to 15 minutes. It can take you two hours to get from one part of Las Vegas to another. Transportation is a major concern.

Tyler-Garner: As you consider a place like Haas Automotive who is coming here and that their headquarters will be in Henderson. Folks in North Las Vegas are taking that commute. Are there ways to look at transportation? In the northern part of Nevada, I recollect one employer who noted that they had gotten to a place where they were transporting their staff. They established a shuttle to get folks up to the area where they needed to work. It’s not traditionally the role they would take, but if they were going to retain a workforce, even at the wages they were offering, that was a consideration.

HOW HEALTHY IS THE LABOR MARKET?

Tyler-Gardner: As a part of DETR (Department of Employment, Training and Rehabilitation), we have the chief economist for the state. Each month we release the most current percentages around some of these issues. [In our most recent repot], the unemployment rate for Nevada is 3.6 percent. That is a historic low. That is significant. But, if you aggregate the data, depending on the population, for example, individuals with special needs, returning after a period of incarceration or someone among the working poor, the unemployment rate can be as high as 29.4 percent. At this time, particularly because there’s been so much conflation and contraction, it’s still a tight labor market. We’re asking our folks to look at alternative labor pools as a part of the discussion.

Parkhurst: Unemployment is the lowest it’s been for years. It is very difficult. How do you attract and retain? We have all those topics that have been brought up. One of the things that I forgot to bring up is wages. Especially in the sector I work in, they really need to do a salary survey. Since we had the downfall in 2008, it just doesn’t seem like the wages have not come up the way they should. I think we’re disproportionate in alignment with the cost of living. I really think a lot of companies need to embrace that.

Banko: In larger companies, they’re trying to push the cost of employees down. They’re trying to push the salaries down at a time when they should be going up.

Spoletini: Right. You can only ever cap a couple of things and payroll is the first one to go. With that being said, I think it really is industry or market specific. There are certain sectors and segments of the labor force that are absolutely on par or have seen amazing gains. If you look at anything gaming and in the legal field, there have been better gains there, from a salary perspective, and certainly some of the benefits that have come back online. However, if we’re talking about the restaurant industry and you’re working as a server, that’s another discussion altogether and that’s where our new employment and labor laws that are coming into play.

Tyler-Garner: There is a perceived mismatch between our workforce skill sets here and the new businesses that come to our state. DETR is working to ensure a ready workforce that is employer responsive. We’ve partnered with the Governor’s Office of Economic Development. Their focus is either in expanding businesses within our state, or attracting new ones. As a part of my work, touring throughout the state in this capacity, [its critical] to understand the needs of employers. I need to be responding to employers in providing job seekers that even some things like housing availability and child care are issues in other parts of the state. In Winnemucca or Ely [employers are] saying, “ I have over 200 openings in this particular sector.” But, because there is a lack of childcare, folks are staying at home to raise their children because there isn’t a place to send them.

How have laws changed recently?

Spoletini: The minimum wage changes came into affect as of July of 2019. The next upgrade is July of this year. Nevada’s got a two-tiered system for minimum wage. A lot of people that move here are not necessarily aware of [that system]. If you’re a small employer, and you are not offering healthcare to your employees, minimum wage is set at $8.25 for you. If you are a small employer and you have the ability to partner with another network, your chamber of commerce or a company where you can enter into a benefits master plan, you have the ability to offer $7.25 as the minimum wage. On July 1st, that’s going to go up to $9 and $8, respectively. In 2021, it will go up to $9.75/$8.75 and it’s $0.75 each year thereafter until 2024 when we hit $11 and $12.

Banko: [In our business we hire] contractors, or what the state legislature calls temporary workers. It’s not really temporary because these are skilled individuals. My biggest problem, and a big problem for all of us I would think, is the added cost we now have based on the new rulings the governor has put into law. It’s the cost of PTO (paid time off) for what they’re calling temporary workers or contractors, meaning that they’re employees after 90 days. The average time my contractors stay on the job for clients is between five and seven months. We now have an added extra, close to 2 percent cost on top of everything else. I don’t think that the labor commissioner understands our kind of business. I have about 50 salaried employees. They have full benefits. Now they’re considering contractors as consultants, if you will. These are high-end earners who make $80 to $150 an hour. If you’re paying their taxes and they’re considered temporary employees, the cost of providing PTO is outrageous. Now, we could lower their wage or give them a choice, but it doesn’t say you [are permitted to] do that in the actual ruling. Many of us are just waiting to see what happens. Nobody wants to ping the labor commissioner because nobody wants a real ruling. We’re just waiting to see what happens. The law is not clear and I don’t think they put into consideration what we do. It’s also not clear as to whether or not you can off set the PTO with money.

Tyler-Gardner: I appreciate you offering feedback. I’ll be sure to pass that along to the labor commissioner.

Spoletini: Have you reached out to your own labor attorney for assistance or guidance?

Banko: [I’ve reached out to] four of them. I spend a great deal of money trying to figure out what’s legal and what isn’t.

Lovingier: It could be a liability trap.

Banko: It is. Pretty much, collectively, they all said we probably shouldn’t do it. Yet, other firms in town are doing it now. What do I do? I’m going to lose business over it, there’s no doubt. It probably won’t be a good portion of business, but I will. I’m also losing margin because of it. It makes it difficult to continue doing the good things that I enjoy doing.

What is on the horizon?

(Editor’s Note: this roundtable was held March 4, a week before the World Health Organization declared COVID-19 a pandemic.)

Parkhurst: The coronavirus is a huge influence right now.

Banko: We’re all sitting here waiting. I was on a staff meeting this morning with one of the major casinos and that’s all they were talking about: How many rooms are getting canceled. How many conventions are being pushed back or canceled completely. What to expect when the first case hits here. What to do. What the plan is. It’s coming and it’s going to affect all of us, especially in staffing.

Parkhurst: There’s a huge influence in every way shape or form. It’s hitting everybody.

Banko: There’s three or four of these big casino companies that have lost $1.7 billion so far in Macau alone. That’s a large piece of money. It’s not a matter of if, it’s a matter of when, it’s going to hit.

Tyler-Gardner: And if you all are seeing impacts through your work, please feel free to email me so we can begin incorporating that into our thinking around how do we ensure that there’s a comprehensive response.

Banko: I’m actually shocked we haven’t had a case yet. This is a transient community.

Daniel: Well, maybe we haven’t heard about it yet.