As the U.S. business climate continues to improve and as the labor market tightens, it doesn’t look like 2018 is going to be any easier on electrical distributors that need to fill key positions within their ranks. The Wall Street Journal reports that the U.S. economy rebounded from recent hurricanes, sending the jobless rate down to a 17-year low in October and driving up the pace of hiring. The unemployment rate fell 0.1 percentage point to 4.1% in October, its lowest level since December 2000—a number that after remaining steady for much of 2016 “barreled down from 4.8% at the start of this year,” the WSJ reports.
Distributors are definitely feeling the pinch, and are looking for new and innovative ways to overcome their hiring challenges while accommodating the business growth that the thriving economy is affording them. Here are six of their most pressing challenges as 2017 winds down and 2018 comes into view…and some good advice on how to work through these obstacles.
- Can’t find anyone who has experience in electrical distribution. This is a perpetual problem that’s been exacerbated by the shrinking labor pool, and one that’s sure to continue plaguing distributors in the New Year. “Finding recruits with experience in our industry has been tough,” says Bill Gilpin, contract/data manager at Werner Electric in Cottage Grove, Minn. Ira S. Wolfe, president at Success Performance Solutions and author of Recruiting in the Age of Googlization, suggests treating the hiring process just like you would the customer acquisition practice. “The cost to acquire new talent is many times more expensive than retention especially for top performers,” says Wolfe, “and recruitment does not stop at the job offer.” To more quickly infuse industry knowledge and expertise into new hires who may be showing good potential, but who may be “green” in the ways of electrical distribution, Wolfe suggests pairing up the newbies with veteran employees in a mentoring-type relationship. “This is a low-cost, high-return on investment (ROI) solution,” says Wolfe, “that a lot of companies are using successfully right now.”
- A lack of formal onboarding and training processes. According to a recent CareerBuilder survey, over a third of employers (36 percent) lack a structured onboarding process and a significant number are reporting costly consequences. Forty-one percent of these employers believe the lack of a structured onboarding process has led to lower productivity (16 percent), greater inefficiencies (14 percent), higher employee turnover (12 percent), and/or lower employee morale (11 percent). At Werner Electric, Gilpin says the distributor has been putting a “much bigger emphasis on onboarding and training processes” lately, knowing that the companies which invest in lengthy and thorough job training will probably have the best retention rates. “We want to make sure there isn’t a gap in experience as the younger generation continues to move into the industry and the older generation moves out,” says Gilpin. “The years of experience and great relationships created along the way cannot be taken for granted.” Not only is onboarding and training the right thing to do, says Wolfe, “but both are seen as ‘high-value’ benefits to both millennials and generation Z.”
- No established plan for long-term employee engagement. According to Gallup Daily tracking, 32% of employees in the U.S. are engaged — meaning they are involved in, enthusiastic about, and committed to their work and workplace. Worldwide, only 13% of employees working for an organization are engaged. Electrical distributors aren’t immune to this problem, and many are scrambling to find ways to keep workers interested, engaged, and enthused on the job. “I think the biggest ‘people’ challenge for our industry is getting down a clearly defined career path with the exact steps and expectations for each employee,” says Timothy Young, district manager at Interstate Electric Supply in Boise, Id. For example, someone who comes into the business as an account manager may begin looking for a new opportunity within six months. Without an opportunity for advancement to look forward to, that person may leave the company entirely in search of greener pastures. “So often we discuss and build up that next position, maybe throw EPEC (NAED’s product and sales training course) at them, and when the job is not available within a year the employee leaves,” says Young. “We have to engage them better and make sure the plan is solid and executed.”
- An abundance of unqualified candidates. “Almost all applicants are not qualified for the position and in many cases not capable of passing our corporate background checks,” says Young. When a company is attracting too many unqualified applicants, the problem isn’t just a recruitment problem; it’s a marketing problem,” says Wolfe. “The organization should ask: Why aren’t we attracting a better pool of applicants?” The first improvement should be better targeted marketing. Are you using the right job boards or messaging? Are your job postings optimized? Do your postings describe the company culture and not just the job responsibilities? “Just as important, a bad pool of candidates might be a reputation problem,” Wolfe adds. “What are employees – past and current – saying about working for you? Qualified workers have options these days and they aren’t willing to just job hop from the frying pan into the fire.”
- An industrial evolution is underway. “Right now, the industry is facing challenges similar to many other industries,” says Rock Kuchenmeister, general manager K/E Electrical Supply Co., in Mt. Clemens, Mich. “We are in the middle of an ‘Industrial Evolution,’ a moment in time when change is rapid.” Combine that with a low unemployment rate, says Kuchenmeister, and you wind up with a pretty challenging hiring environment. “Talented individuals are simply hard to come by,” he notes. Start by thinking about how to create better opportunities for new recruits, and how to make your workplace the best place to work. The unemployment rate may limit the pool of unemployed applicants, says Wolfe, but nearly three-quarters of all new hires currently have jobs. “That means most businesses are attracting workers who are dissatisfied or disengaged with their current employers,” says Wolfe. “Create a better opportunity and better place to work and more qualified workers will come.”
- “Diamonds in the rough” are getting harder to come by. Finding candidates who can effectively lead the electrical distribution industry for the next 20 years is getting more and more difficult, says Kuchenmeister, who is concerned about this dearth of talent. But when you can find these individuals, he says, they can transform the company, the culture, and even the industry for the better. “Those diamonds are worth all the time, money, and effort recruiting and training them,” Kuchenmeister says. To improve their chances of finding those “diamonds,” Wolfe says distributors should put an effort into career mobility—or the movement of employees across grades/ positions (both upward and downward) or a complete change in occupation. Offering cross-training or new career opportunities tops the list for desired benefits for workers of nearly every generation (even in small businesses), Wolfe says, noting that even for the smallest distributor, training and advancement both increase engagement and extend retention. “Even when an employee does leave for a better opportunity,” says Wolfe, “the reputation of the company is enhanced and it’s easier to attract better applicants.”