California Businesses Facing Staffing Shortage
By Kevin Smith Staff Writer© Pasadena Star-News, December 23, 2006
California's labor market has been "dramatically positive" over the past two years but company cutbacks, coupled with an expected wave of retiring baby boomers, could leave many businesses understaffed.
That's the assessment of Gary Kaplan, President of Gary Kaplan & Associates, an executive search firm based in Pasadena.
"It's been a very hot labor market and lots of factors have led to that," Kaplan said. "Generally speaking, we've had a robust economy in most sectors. And business sales and revenues have not only been up at most corporate entities, but everyone seems to be operating on improved bottom lines."
That means companies are looking to expand. And if they want to expand, they're going to have to hire more workers - a situation that's created pent-up demand.
"We went through three years of a recessionary economy where everyone held back and was either not hiring or reducing their work force," Kaplan said. "The infrastructure of many of these companies has gotten real skinny, so when sales improved there wasn't an adequate work force to support it."
Many baby boomers in their 60s are taking early retirement and the "tweeners" - those born before World War II - are definitely retiring now, according to Kaplan.
"The next generation will have substantially less," he said. "I've heard numbers ranging from 10 million to 30 million less. There will definitely be a deficit."
California National Bank is already facing challenges in recruiting entry-level workers, such as tellers, according to Michael Wolfe, the bank's Vice President of Human Resources.
Those kinds of positions typically pay $10 to $12 per hour, he said.
"It's been very difficult for us," he said. "We've struggled more over the last year than in the previous two years. It's much harder to find people. And many of these young people seem clueless about their appearance and showing up on time for job interviews - or even showing up at all."
Wolfe said the bank is also struggling to fill mid-level positions.
"We're competing with a lot of other organizations for the same applicants," he said. "Unemployment is low and people can have their pick of jobs."
The problem has been further compounded by the fact that many companies eliminated mid-level positions as part of their corporate deionizing, Wolfe said.
"People had no place left to move up so they left and went into other professions," he said.
Wolfe also lamented the influence of the Internet as a tool for jobseekers.
"It has become such a dependent piece for applicants and employees, but it's not such a great asset anymore," he said. "It's gotten too easy to apply for jobs and now we have marketing people applying for bank jobs."
Lynn Segal, CEO of LS & Associates Staffing Service in Sherman Oaks, said companies have increasingly adopted the mantra of doing more with fewer employees.
"I don't find a lot of firms that are downsizing now, but when they let people go they aren't refilling those positions," she said. "They aren't bringing in the people they need to cover their bases, and people are being asked to take on more responsibility."
Segal's firm specializes in providing clerical workers for law firms, and these employees often handle the paperwork for as many as five attorneys, she said.
"Many of the junior attorneys end up doing their own paperwork because they haven't hired enough people," she said. "These firms are what I like to call top-heavy. They don't appreciate the lower-level office clerks and reception people."
Kaplan said some industries will continue to struggle to fill key positions.
"With the advent of the Sarbanes-Oxley, demand for accountants, accounting managers and account executives has fueled a boom," he said. "When you have to do a search for a VP controller or a chief accounting officer ... those are tough positions to fill."
Executive fundraising positions and some roles with nonprofits and universities are likewise tough to fill, Kaplan said, but the field of executive recruiting has seen healthy growth.
"The executive search industry has experienced a 10 to 20 percent growth rate over the past year and there's no indication that there will be a decline in 2007," he said.
