Guest Column July/August 2022

July 28th, 2022 by Nathan Hobbs

Cherish Your People: Inflation Is Tough, but Remain Focused on Your Best Assets

By Jim Plavecsky

I recently returned from a road trip and spent time on the manufacturing floors of some of my top customers. I like to maintain a good rapport with the production line workers who use the products that I sell on a daily basis. I touch base with many of them as I conduct quality audits and gauge satisfaction levels on the plant floor. This trip was a shocker, as many of the people I knew were missing. The reason this time wasn’t sickness. For once, it couldn’t be blamed on a virus. This time the culprit was inflation.

The people I knew left to take higher-paying jobs.

To attract replacement employees, these window fabricators had to raise wages—in some cases up to $3 per hour—to attract workers and fill production jobs. It’s not easy to find replacements. The available pool of reliable factory workers has significantly diminished. Many employees became disillusioned with their jobs during the pandemic. This has been referred to as the “Great Resignation,” with a record number of Americans quitting. In April of 2021 alone, four million Americans quit their jobs. In August, a record 4.3 million resigned their positions.

The Great Resignation

It seems the pandemic caused people to re-assess where they are in life—their working conditions, the number of hours spent at home versus work, pay, and work conditions. With demand for many types of workers being at an all-time high, a record number decided that the grass looked greener either at home (not working) or in some type of job with more flexible hours. The recent escalation of inflation has exacerbated the situation and now more fenestration workers are leaving the industry for higher-paying jobs. With inflation on the rise and high gasoline prices biting into the discretionary income of working Americans, employers are tasked with ensuring that their wage rates are optimized to attract and maintain a reliable workforce.

Replacing employees who leave our industry isn’t easy. Starting and learning a new job in a hot, humid and dusty manufacturing environment tends to increase an already high attrition rate. Offering a higher starting wage was a must, especially considering the recent concerns about inflation.

One thing that must be considered when raising wages is re-evaluation of wages—not just the wage rate of new, starting employees. If you raise the starting wage rate without re-evaluating those of existing, seasoned employees, then you risk an upset in what is referred to as pay equity. Differences in wage rates are allowed when there are differences in factors such as education, experience, skill level and job performance. However, hiring new employees at a higher wage rate than you are paying your existing employees, without a good reason, could upset the whole apple cart.

Give Them What They Deserve

With the U.S. rate of inflation currently running at 8%, you risk losing your best employees if you do not consider this when deciding performance-related pay increases. Reward your very best so that the skills they honed and the experience they have gained over the years don’t end up benefitting another company or, worse yet, a competitor.

A company is nothing without its employees. They are the lifeblood of the organization. Costs are rising on every front, and it’s going to be a real challenge to remain competitive in a marketplace that is sure to eventually contract, but your company will be nowhere without its most valuable resource.

Jim Plavecsky is owner of Windowtech Sales Inc.

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