Low unemployment, seasonal hiring, and your business

A Booming Economy and Seasonal Labor

The US economy continues to roar – unemployment, currently at 3.9%, is at a 15-year low. Strong performance from the retail sector indicates a surge in an industry that’s had a tough decade – with some commenting that retail is entering a “renaissance” era. This month the world’s largest retailer, Wal-Mart, reported its best quarterly sales gain in a decade, and Target reported its largest gains in 13 years. Production increases in the manufacturing sector rose .8% in June, and .3% in July. As consumers continue to be optimistic (a 17-year high), logistics and distribution companies will face constraints that have not been present in the market for more than a decade.

These economic metrics are good news for the country – but it only means one thing to those responsible for operational performance behind the good news. The impacts of seasonality will reach crisis mode – companies competing for labor will spike wage rates or offer overtime as an up-front benefit.

The worst practitioners of these tactics will even market seasonal positions as having potential for full-time hire, when they already know a down cycle naturally occurs in Q1. Many companies that enjoy low turnover and high labor retention throughout the year will see workers jump ship for marginal wage increases – effectively starting a bidding war.

There are two paths for operations leaders to take:

1) The status quo: enter the bidding war and hope for the best. This scenario requires businesses to forfeit the maximum benefit and good fortune of a booming economy. Labor costs go up, productivity remains stagnate or declines – it requires giving up profit by over-committing to methods such as full-time seasonal hiring, or utilizing expensive augmentation via temp staffing

2) Embrace change: meet the demands of a new, booming economy with a tech advantage and a labor marketplace that drives individual performance, tailors labor to demand, and meets the needs of customers

The Veryable Solution

At Veryable, we believe operations leaders should be empowered to face challenges presented in this economy. By utilizing Veryable’s on-demand marketplace, your business can post Ops when your full-time workforce reaches capacity. For seasonal hiring, your business can end the annual, predictable cycle of trying to flex capacity through traditional full-time hiring or temp staffing, only to see all the training investment walk out the door in January. The best part of utilizing a marketplace is that you know what you’re getting – businesses on the platform rate the Operators based on performance. When the need arises, you can select your “favorite” Operators to come back to work.

Seize the opportunity to thrive in this economic upturn, and Veryable can help you make the most of it! Get a head start on building your labor pool at company.veryableops.com.

For more information about Veryable on-demand labor for warehouse and distribution applications, please view our website at: www.yourlaborpool.com or www.veryableops.com.

Overtime pay in a tight labor market – there’s a better way!

The US economy is currently experiencing larger growth than it has seen in a long time – the unemployment rate is 4.1%, Q1 US GDP is expected to hit 3%, and consumer confidence has reached the highest levels in 14 years.

The manufacturing sector is also pacing this growth – manufacturing productivity is expected to hit 3% in 2018, according to the National Association of Manufacturers.

Labor and economic booms

All of this is great news for businesses and consumers – but economic booms can bring unexpected challenges. Specifically, growth can create constraints in the labor market – it becomes more expensive to attract employees, more expensive to maintain current workforce with larger incentives, and attrition within companies can accelerate as long-time workers jump ship for higher pay somewhere else.

These circumstances lead to an offer that is becoming all too common in hiring processes – offering overtime pay as an incentive for joining a company. According to the U.S. Department of Labor, overtime hours for non-management employees in manufacturing are at the highest levels in 18 years, averaging 4.8 hours per employee. The listings are out there, and your company may even be offering it now – “position includes benefits and overtime pay!”.

Overtime was never designed to be an added benefit, and frankly, is being offered as an incentive by those who are not responsible for operational performance first hand.

Operations leaders know that overtime pay decreases productivity, drives workforce dissatisfaction, impacts profitability, and quickly becomes an entitlement that can be hard to unwind over the long run. The good fortune of operating in an economic upswing should not simply be forfeited as a means to attract talent.

The Veryable solution

At Veryable, we believe the opportunity of an economic boom should never be wasted – and the benefits of operating in one can be accelerated by creating an on-demand labor pool. Businesses now have the ability to post an Op in real time, and match labor force to the exact required output from increased demand. No more staff augmentation, no more long-term contracts, and no more weathering the re-hiring process. Most importantly, no more increases in overtime pay: post Ops when your workforce reaches capacity and bring in Veryable to reduce the backlog and work the additional hours. Add capacity to your current shifts and decrease it if/when demand and backlog decline. The best part: select your “favorite” Operators to come back when the need arises. The Veryable platform has thousands of operators with a range of skillsets and experience for all manufacturing environments.

Seize the opportunity to thrive in a high-performance economy, and Veryable can help you make the most of it!

For more information about Veryable on-demand labor for manufacturing and warehouse applications, please view our website at: www.yourlaborpool.com or www.veryableops.com.