244. Pandemic-Recovery Labor Challenges

Never has a balanced, global economy been shut down for a year. Then: rebooted with massive, blunt, stimulus and Build-Better funds. It will take months for the supply-and-demand for both products and labor to rebalance. And, then into what New Normal?

The “new jobs for April” forecast was a huge, over-forecasted miss by every “expert”. All we know now is that there is a record number of companies short of hourly workers.

What “Solutions” are Being Reported?  

Employers with big numbers of hourly workers – Amazon, Walmart, Target, Costco, McD;s, etc. – are mostly just raising hourly pay by 5 to almost 20%.

A seasonal, resort ice cream shop – with a great location – is hiring at $16/hour instead of $8 and assuming they can pass the wages on in higher prices. Your – business model, niche and time-horizon – should inform your labor solutions.

Some firms have added twists. Chipolte needs 20K new workers by June. They are: offering bounties to workers who bring in new-hire friends. And, selling a career path to become a $100K per year manager in 4 years. These moves hint at the “Good Jobs Strategy” that – Costco, Trader Joe’s and Southwest Airlines – have successfully invested in for years.

“Good Jobs Strategy?”

Is the title of a recommended book by Zeynep Ton. Read the best reviews. Buy it used for $2. The author crystallizes what LL Bean and FedEx discovered back in the late ‘70’s.

  1. Pay the most to screen and hire the best
  2. Expect the most by investing in cross-training
  3. Reduce costs for: turnover, supervisors and errors.
  4. Rally everyone to achieve with pride: service-excellence metrics tuned to best, target customers. Then, retain and win more best customers to grow sales and profits faster.
  5. Achieve 150 to 200% margin dollars per head for 130 to 150% of the going comp rate for the job niche (v industry averages)
  6. Repeat this virtuous cycle to hire more to service the growth.

And, your high-engagement culture will attract new, best-work-ethic prospective employees!

A Best Short and Long-Term Strategy for Distributors?

Most distributor locations are small with different tasks to be done. Not one task learned in minutes as in Amazon warehouses. Learn-n-earn, cross-training yielding high-pay and higher total productivity is the way to go. Now: solve both your near and longer-term labor objectives!

How Exactly?

Skim my “Core Renewal Roadmap” at merrifieldact2.com.