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Worker Shortage Looms As Companies Forge Ahead

May 10, 2021

The unemployment rate in northeast Indiana has been running below 5%, the labor force grew for the first time in 10 months in March, and employers throughout the region are hiring.

By a number of metrics, the region’s workforce landscape seems to be healthy and the economy rebounding from a virus-fueled slowdown. But there is one glaring exception.

Throughout virtually every industry in northeast Indiana, employers are asking the same question: Where are the workers?

There is an air of frustration bordering on desperation, and there seems to be no speedy remedy other than people who are able need to get back to work.

Worker shortages here and elsewhere in the country were a problem before COVID-19 upended how we lived and worked. But the shortages now seem to be more pronounced.

Many companies ramping up operations as the economy reopens aren’t seeing the same numbers of job applicants at their hiring events and job fairs, and visits to or contacts with Northeast Indiana Works’ WorkOne Northeast career centers have declined.

In mid-April, there were more than 12,000 online job postings in northeast Indiana, according to the Indiana Department of Workforce Development, and more than 100,000 statewide. And those postings do not take into account that there are often multiple job openings associated with each post.

Still, most companies these days with large numbers of openings are rarely, if ever, able to fill all of their jobs. And the skill sets of those who do apply are sometimes lacking.

A project in its early stages at Northeast Indiana Works is tabulating the incentives and tools being used or considered by employers to attract workers. Those incentives include flexible shifts; sign-on, attendance and referral bonuses; and structured wage increases once a person is hired.

Some companies have also raised starting wages, although one could argue the region has a ways to go on that score. A recent analysis of U.S. Bureau of Labor Statistics data conducted by the Community Research Institute at Purdue Fort Wayne showed total private sector wages in northeast Indiana increased in the third quarter of 2020 over the third quarter of 2019 by a miniscule 0.2%.

Wages, though, may not be the biggest factor in the worker shortage this time around. The pandemic – and the associated fears – led many people to focus inward and concentrate on priorities closer to home. “Success,” said Lisa Smith, executive director of Mental Health America of Northeast Indiana, “became living your life, not having a job.”

Smith, whose organization is observing Mental Health Awareness Month, also noted that “employees are facing higher levels of anxiety and stress, which may be influencing employee retention. The fear and uncertainty caused by changes in routines, relationships and family-related issues can certainly impact a person’s ability to remain productive and present on the job.”

Other reasons people have left the workforce and not returned are many.

Employers have noted more workers retiring, perhaps because they reassessed the state of their finances and lifestyles and determined they really didn’t have to wait – that they could retire now and stay safe at the same time. Even before the pandemic, retirement was a growing silver tsunami in northeast Indiana. One in four workers across all industries is at or near retirement age, defined as being 55 years old or older.

Some observers have also suggested families strapped with child care responsibilities in the wake of education delivery modifications have gone from two-income families to one, while others have speculated that some people continue to stay on the sidelines buoyed by stimulus payments and extended and expanded unemployment insurance benefits.

The stimulus/unemployment insurance matter is a common assumption that Steve Hoffman, president and CEO of Brightpoint, disputes. His organization helps people rise from poverty, and he said many of Brightpoint’s customers continue to struggle with rent and utility payments despite the added government safety nets.

The current worker shortage is exacerbated by a challenge that existed pre-pandemic – luring more people to live and work in northeast Indiana. Economic development entities continue to work hard to attract talent from outside the region. Moreover, educators, businesses, and workforce and economic development officials have barely missed a beat in working to develop homegrown talent.

The attraction and workforce development initiatives are crucial, but they are longer-term solutions. There is an urgent and wide-ranging need for workers now and it is reflected, in part, by a recent surge of companies requesting WorkOne host or facilitate hiring events and job fairs.

There is much at stake. The region can ill afford a lengthy worker shortage, which would likely lead to additional business failures; significantly undermine the region’s ability to produce and ship products; and heighten burnout for those who remain on the job.

It remains to be seen whether the growing completion of vaccinations, a more normal school schedule, and the presumed end of stimulus and expanded unemployment insurance benefits will propel people back into the workforce or to stay in it.

But right now, the iron is hot for job seekers, those interested in changing careers, or people who believe they need to skill up to be competitive.

Northeast Indiana Works recently received a $325,963 Workforce Ready Grant from state’s Department of Workforce Development for free short-term adult training in CDL, welding and machining. It is the second round of such funding and is good through Sept. 30.

For secondary school students, the State Earn and Learn program is also helping provide gateways to employment.

While these kinds of talent-development opportunities have been part of consistent messaging encouraging people to acquire necessary skills for the 21st century workforce, they may not resonate like they did before.

The pandemic changed many of us. It made us more wary. It made us more protective of ourselves and our families. It made us think about the importance of non-work activities in our lives.

Nevertheless, we should not lose sight of the fact that a significant factor in our well-being is companies operating at full tilt. What’s going on now has the feel of an 11th-hour moment that compels a clarion call for people to get back to work and, in doing so, ensure that the northeast Indiana economy prospers.

This opinion article was written by Rick Farrant, director of communications for Northeast Indiana Works. It appeared in the Journal Gazette’s Perspective section on Sunday, May 9.