Manufacturers increase perks to get new hires to move
Manufacturers increase perks to get new hires to move
Manufacturers, including some
in Nebraska, are paying relocation costs and bonuses to move new hires
across the country at a time of record-low unemployment and intense
competition for skilled workers.
Half
a million U.S. factory jobs are unfilled, the most in nearly two
decades, and the unemployment rate is hovering at a 50-year low, the
Labor Department said earlier this month. At the same time, Americans
are moving around the country at the lowest rate in at least 70 years.
To
entice workers to move, manufacturers are raising wages, offering
signing bonuses and covering relocation costs, including for some hourly
positions. They are betting that spending on higher wages and moving
incentives will help them find workers to fill their backlogs of orders.
Rather
than just extending these benefits as part of job offers, factories are
also advertising them in postings to encourage farther-away candidates
to apply. On ZipRecruiter Inc.'s job-listing site, 1.6% of manufacturing
positions include a pledge to pay moving costs, up from 1% in 2017.
"We've
had to get very aggressive with talent acquisition," said Michael Winn,
chief executive of Columbus Hydraulics Co., which makes parts for
Doosan Bobcat Inc. and The Toro Co. "We are having to draw people in
from distant places."
The
company since 2018 has made extra cash payments to new hires to move
near its factory in Columbus, Nebraska. Charlie Shoup received $2,000 to
move from Salt Lake City to near Columbus, where he runs the company's
technology systems.
"It
pretty much gave me enough cash to pay for gas out here, get myself
established with a solid place to live in a not-backwater part of Omaha,
and then I got a couple of shirts with collars on them," he said.
Shoup,
who has a degree in computer engineering, said that at Columbus he
makes more than double the $13 an hour he made in Utah at an electric
bicycle shop.
Manufacturers
say they are particularly eager to add moving reimbursements and
payments for specialists such as welders, engineers and machine
programmers. More manufacturing jobs require such skills as production
becomes more automated.
At
Caterpillar Inc.'s engine plant in Lafayette, Indiana, the company said
electricians and machine maintenance staff are eligible for $5,000 in
moving expenses if they lived at least 75 miles from the plant before
being hired.
Lockheed
Martin Corp. has moved skilled workers such as engineers to plants in
Texas and California and highlights jobs that offer relocation benefits
on its website. Raytheon Co. is offering up to $5,000 in moving benefits
for a $17 hourly position as a machine operator at a factory in
Arizona.
The relocation
payments and other perks some manufacturers have added recently coincide
with a run of difficulties for the industry overall. The U.S. factory
sector contracted for the fifth consecutive month in December, according
to the Institute for Supply Management. The industry shed 12,000 jobs
in December from the month before, the Labor Department said.
That
weakness stems in part from lower global trade and domestic energy
production as well as Boeing Co.'s decision to first slow, then halt,
production of its 737 MAX. Other manufacturers say business is strong
and that a shortage of skilled workers is impeding higher production.
New
Way Trucks is offering a $1,000 payment to workers who move near its
plant in Scranton, Iowa, as it adds dozens of positions to close its
backlog and decrease turnaround times.
Companies
are also raising wages. Wage growth at U.S. manufacturers reached its
highest level since 2016 in December, rising 3% that month from a year
earlier. The inflation rate in November was 2.1%.
G.H.
Tool & Mold, an auto-industry supplier owned by Tooling Tech Group
LLC, increased its starting wage to around $18 an hour last year from
$15 a few years ago. The company also has paid moving expenses for
workers relocating near its factory in Washington, Missouri. Julie
Scannell, the company's head of human resources, posts notices on a
Facebook group called "Leaving Illinois" to draw workers from that
depopulating state.
"We
are in an era right now that is unlike anything I've seen in 25 years
as far as trying to recruit people," Scannell said. "We are having to
really track them down a little bit and schmooze them more than we used
to."
Lockmaker
Allegion PLC flew the families of some skilled machine operators to its
factory in Colorado Springs, to entice them to move to the area after
it purchased some specialized equipment. The company also has started
grooming employees at an Illinois plant to perform sophisticated jobs
such as programming computerized machines.
"The war on talent: It's there. It's real," said Brad Kendall, a human-resources executive at Allegion.
Other
companies have added smaller sweeteners for new workers, according to
current online job postings. John Zink, a Koch Industries Inc.
manufacturing company in Tulsa, gives out free steel-toed boots; a
Globus Medical Inc. plant in Audubon, Pennsylvania, provides workers
with YMCA memberships; Whirlpool Corp. is paying workers at a factory in
Findlay, Ohio, a $250 six-month retention bonus.
"Employers are getting creative," said Julia Pollak, ZipRecruiter's labor economist.
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