Taming the Labor Shortage
How to attract low-skill employees in a tight market
To hear a lot of people talk about it, it sounds inevitable: the shortage of willing and able workers will eventually catch up with every business in America. If your jobs are challenging and well paying, you may be in luck, the theory goes. But what happens when the "opportunities" are less appealing, even mundane? How do you get young people, for instance, to do repetitive, entry-level work -- and do it well? And how do you convince them to stick around when you can't offer much in the way of pay or avenues for advancement? Hundreds of companies in tight labor markets across the United States are now wrestling with these questions. Declining quality and lost customers are steep prices to pay for the inability to get good people. The truth is that it's apt to become a much bigger problem in the next decade, as the number of young workers entering the job market will shrink by as much as 10%. Yet the prospects for filling low-skill positionsneedn't be as grim as everyone says. Consider the experience of Original Research Corp. II.
ORC II, a telephone research business located in Chicago, has figured out a smart way to appeal to the motivated individuals it wants -- and to hold them in relatively low-paid slots longer than most managers would even dream of. The work isn't what you'd call glamorous. Nor is the pay much to write home about (every caller begins at $5 an hour). But full-time college students, who make up most of the 350 phone operators, appear to like it just fine, putting in 15 to 20 hours a week.
In a city where part-time opportunities go begging, what keeps these people from looking elsewhere? Well, more than other businesses, ORC II has figured out that money isn't everything. While it can't promise students full-time positions when they finish school, it can give them two other things they value greatly: control over their time, and skills for securing future jobs and surviving on their own. At ORC II, in fact, employees are encouraged to learn about topics that have as little to do with their immediate jobs as developing personal budgets and writing résumés. They're paid, in other words, to spend a portion of their time learning how to be successful. By taking this approach, the company attracts and keeps high-caliber employees, notes founder Howard Tullman. "We've gained access to the top end of the student job market."
Tullman's decision to hire students came shortly after he started ORC II two years ago, as a spin-off of an insurance-appraisal business he founded in 1980. Because of the nature of the new service he was offering -- follow-up calls to customers for auto dealers and other service companies -- he knew he was looking for a particular type of employee. Many of the early applicants, who came by way of temporary employment agencies, didn't seem right, says Tullman. "They had had a lot of jobs and didn't have the proper level of concern." His employees had to be concerned about people and watching details. College students took the work more seriously; though less experienced, they were eager to learn the ropes -- and to earn money. Tullman and his associates set out to build a work environment that appealed directly to them.
When most businesses talk about flexibility for part-timers, they usually talk about a narrow range of options: a choice of days, maybe, or of two or three shifts. After all, it's not easy piecing together a hodgepodge of time sheets, then monitoring the comings and goings of hundreds of people. But this is what ORC II does. To make sure the work gets done on a timely basis and to compensate for the amount of flexibility it offers, the company hires and trains more than enough people to cover all of its needs.
Recognizing that students have demands and priorities that are in flux -- and that work isn't necessarily at the top of their lists -- the company makes it easy for them: not only can they set their own hours, they can change them every two weeks. Every other Tuesday employees can rearrange their schedules to reflect, say, upcoming exams or vacations. They can start at almost any hour of the workday. If they need to work less than the minimum 15 hours -- or skip work altogether -- for a week or two, no big deal, says Denise Foy, executive vice-president for operations. "We try to work with them." The extra bookkeeping is a pain, she notes. "It would be a lot easier if people came at the same time." But flexibility is key to how ORC II positions itself against other employers.
The company does other things to position itself as an interesting place to work, such as giving part-timers opportunities to earn extra money and take on new responsibilities. "We don't want students to think of it as just another part-time job," says employment coordinator Mary Pirozzoli. After three months of telephoning, for example, they can ask for job upgrades, which might mean adding report editing or caller assistance to their duties. If their request is granted (decisions are based on appraisals from supervisors and job knowledge), their hourly wages jump from $5 to $6.25 on the days when they're doing the higher-paid work. In addition, employees can qualify for quarterly raises of 25¢ by passing written job-skills tests.
They can also earn bonuses for working a late shift, until 11:00 p.m. ($5), or three Saturdays in a month ($15). They can earn still more by introducing the company to a new employee who stays for three months or more ($25). Then there are the programs aimed at improved performance and personal advancement. Two or three times a month, Foy says, callers are taken away from the phones for 30- to 45-minute coaching sessions (for example, how to listen better or how to handle confrontation). Beyond that, they can get time off (up to three hours a month) to pursue in-house courses that interest them. Currently, notes Foy, ORC II's newly organized "university" has more than 100 different offerings (many of which were requested by employees) -- everything from using a calculator and balancing a checkbook to writing memos and interviewing for jobs. Most courses are organized into half-hour workshops or concise reading packages.
Do employees value this part of the experience? Positively, and it sends an important message. "The company knows you can leave any minute," says Diana C. Rodriguez, a junior studying bilingual education at the University of Illinois in Chicago who has been with the company for more than 15 months. "But they're still willing to invest in you."
Extravagant as this may sound, the cost to ORC II isn't that great -- not when you consider the benefits it gets. The company, which expects revenues of close to $12 million in 1989, will spend about $250,000 this year on courses and workshops, around $830 per employee, Foy says. (This includes everything -- the time employees spend away from their work, the expenses for instructors, and any administrative support the courses require.)
Clearly, there are challenges to running a business like this. One is finding a way to maintain the quality of service, particularly as the business grows. Nearly half of the employees who start ORC II's four-week training program don't finish it. For one reason or another, Foy notes, they can't do the work the way it has to be done, or they simply don't want to. After employees are trained, their work is monitored regularly. Every month a few employees are suspended or dismissed for poor performance or not sticking to the schedules they set for themselves. But overall, ORC II's approach to managing people seems to work. For one thing, it doesn't have to look as hard for new employees as a lot of growing businesses do; some 35% of its new hires are referred by current or former employees. And once they're in place, they tend to stay; only 24% of the 158 part-time employees working at ORC II at the end of 1988 have left.
"Our goal," Tullman says, "is to make the work and the environment as interesting as we can. We know many students need a job. But there's nothing that says they need this job."
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Can't pay people big money or promise them much in the way of upward mobility? Don't despair. The experience of Original Research Corp. II suggests that there are things you can offer people that other employers probably don't -- things that may encourage them to work harder and stay longer at entry-level jobs. Among them:
* Flexibility. Instead of running the business for the convenience of management, figure out what the people who work for you want. ORC II lets employees, who are mostly college students, redesign their own work schedules every two weeks. To meet staffing requirements at unpopular times -- Saturdays, for example -- the company pays bonuses and hires and trains more part-time people than it might otherwise need. "It's very important to balance the needs of employees with the needs of the organization," says executive vice-president Denise Foy.
* Employee recognition. Full-time positions at ORC II are limited. But ORC II recognizes the work of part-time staffers in several ways. They can qualify for job upgrades and quarterly raises. Top-performing college students are invited to work full-time during vacations from school; at other times, they're given special assignments.
* Creative perks. To reward individuals for good attendance, the company offers coupons -- good for everything from sweatshirts and gym bags to free long-distance phone calls and time off work. "You'd be surprised how much people appreciate little things," says Foy.
* Policy input. Instead of rushing ahead with decisions that people will have to live with, ORC II frequently invites employees to make suggestions before employee policies are formulated. It goes beyond asking what drinks they'd like in the beverage machine. In recent months, for example, groups of employees were given a say in developing their dress code and a new bonus plan before they were finalized by management.
* Outplacement help. While most businesses frown on their employees looking for outside work, ORC II takes a different view. The company not only offers workshops and courses that give people new job skills but actually steers them to employment agencies and other jobs. "We try to help people build their résumés," says employment coordinator Mary Pirozzoli. It also helps the company build its own reputation as a good place to work.