Recruiting and Retaining Employees Amid the Labor Shortage
The following article was first published by Shipman & Goodwin LLP in its Employment Law Letter. It is reposted here with permission.
According to CBIA’s 2021 Connecticut Manufacturing Report, “nearly nine in 10 (88%) of manufacturers report difficulties finding and retaining workers, a 17-point jump from last year, and 41% describe the labor shortage as the state’s main obstacle to growth.”
Manufacturers are confronting this obstacle head on, offering training programs and investing in a variety of different state-funded and private programs in Connecticut that target and engage students in manufacturing fields in order to replace an aging workforce.
Manufacturers also are applying for H-1B petitions for highly skilled foreign workers.
With the upfront costs of attracting and investing in skilled labor, manufacturers may also be tempted to utilize other tools to attract and retain employees, such as written employment agreements, in order to exercise control over employees’ ability to leave their positions.
While this may seem like a good idea amid the current shortage of available workers, manufacturers should also consider the negative effects forcing applicants to agree to such contracts will have, especially in a competitive environment where they may have multiple different offers that don’t come with such requirements.
In addition, manufacturers must consider the growing tide against such agreements that contain restrictions on competition: several states have already banned them; the Biden administration has directed the FTC to examine ways to restrict them; and the Connecticut legislature has already raised bills to prohibit or restrict the use of such agreements, although they have not passed to date.
The new generation of workers may not value longevity in a position more than other important factors, such as retention incentives, benefits, company culture, training, and an overall sense of value to the company.
While compensation is key in retaining employees in a competitive market, we’ve seen since the beginning of the pandemic that these other factors may be equally, or even more crucial in attracting and retaining a skilled workforce.
What are some ways manufacturers can focus on these factors, and maximize hiring and retention?
First, they should make sure to comply with Connecticut legislation passed in 2021 that impacts workers, such as the law that prevents employers from asking for applicants’ ages or related information in job applications, and the law requiring that employers disclose the salary range for open positions.
Transparency regarding what to expect in terms of compensation and benefits, as well as how employees can grow with an organization, can be useful recruiting tools.
Several updated laws in Connecticut also focus on an area that should be of great interest to manufacturers—focusing on recruiting and retaining women in a variety of different roles.
These laws include a pay equity requirement, providing designated locations for breastfeeding mothers in the workplace, and providing paid family leave for both mothers and fathers to bond with new children.
Although manufacturers are required to comply with these state laws, those that focus on making these employee benefits an aspect of workplace culture and employee well-being will likely be in a better position to retain employees in the current environment.
Finally, manufacturers must, like all employers, adapt to the new reality of remote work for front office staff. Although there can be significant benefits to having all employees under the same roof, many candidates are looking for and will only accept remote positions.
If a manufacturer moves in that direction, it must ensure that it has appropriate policies and procedures in place covering topics like timekeeping and computer and technology usage by remote workers.
It also must ensure it knows where those employees are working from, as work in other states can cause problems from a tax and regulatory perspective.
The manufacturing industry in Connecticut has momentum it has not experienced in decades, but manufacturers need to attract and retain a skilled workforce to keep that momentum going.
Adapting to recent changes in Connecticut law, focusing on the work environment, and being flexible in the hiring process all can help with hiring and retention.
About the authors: Peter Murphy is a partner at Shipman & Goodwin LLP practicing in the firm’s employer defense and labor relations practice group. Keegan Drenosky is an associate at Shipman & Goodwin LLP practicing in the employer defense and labor relations practice group. Murphy and Drenosky help manufacturers and other employers anticipate and respond to the increasingly complex body of state and federal laws governing the employer-employee relationship.
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