21 Mar How Great Range Capital’s Portfolio Companies Recruit and Retain Employees as Talent Pools Evaporate
While economists and policy makers debate over the exact percentage that constitutes full employment in the U.S., most everyone agrees that we are either near or at that level. On February 1, 2019, the Bureau of Labor Statistics reported the unemployment rate at 4.0 percent through January with employment increasing in leisure and hospitality, construction, health care and transportation and warehousing.
The news of our nation being at or near full employment makes for great headlines. But, for companies currently recruiting quality employees from an evaporating talent pool, low unemployment figures necessitate rethinking their traditional recruiting and retention methods.
Labor is among the largest investment for Great Range Capital’s (GRC) portfolio partners, Apple Bus Company, HeartLand, GirtonLLL Transport and Labor Source. Many companies report that finding employees has become as difficult as the proverbial needle in a haystack.
All of our portfolio companies work diligently to recruit and retain the best labor force in their respective industries, and they achieve a measure of victory despite the obstacles. We asked Apple Bus Company, HeartLand, GirtonLLL Transport and Labor Source’s leaders in the trenches about their success stories, recruiting and retention tactics and words of encouragement for others who are responsible for hiring in today’s tight labor market.
Change Up Recruiting Tactics to Fill the Candidate Pool
Headquartered in Olathe, Kansas, Labor Source is a national leader in temporary staffing and labor services for the restoration and light industrial sectors. Mike Pitman, Labor Source’s chief executive officer, says, “Labor Source specifically recruits skilled and general laborers, so we and our customers see the challenges.”
Labor Source continues using guerrilla marketing tactics, like flyers, but these target long-term results that are harder to track. The media reports employers are raising wages to compete for employees, and Labor Source has increased compensation to stay with the curve.
“We upgraded our website to make it easier for applicants to contact us online, plus we’re using digital marketing campaigns instead of a billboard to drive traffic to our site. When we have an urgent need for labor in response to a catastrophic event, we now run digital ads with our phone number so applicants can quickly call us,” says Pitman. “We redesigned our website to appeal to a new generation of employees, but other than that, it’s a matter of keeping up with the times and taking big steps with our marketing efforts.”
Regardless of Labor Source’s success, Pitman still hands it to his peers in the staffing industry, since even Labor Source occasionally relies on third-party recruiters to fulfill urgent requests. He also leverages his own online network. “It’s amazing who you can find online. We’ve saved recruiting fees by reaching out to those in our LinkedIn network,” says Pitman.
Understand What Applicants Want and Expect, Then Offer It
HeartLand is the holding company for Keesen Landscape, Signature Landscape and Columbia Landcare commercial landscaping firms. Hiring seasonal landscape workers is never easy, so recruiting in a tough market is not a new phenomenon to HeartLand.
However, full employment, increased competition against construction jobs and an immigration-charged environment has made finding quality workers more difficult than ever. Furthermore, landscaping is a demanding job. Companies often hire several people to get one who stays. To drive hiring momentum, HeartLand launched an employee referral program in recent years that exceeded leaders’ expectations, with additional efforts launched to increase retention.
“Once we hire a person, we invest in making our companies great places to work. Like other companies, we feel the tremendous pressure on higher starting wages. That’s not enough because it’s an expectation today. We provide good tools and safe equipment, along with uniforms and additional paid time off,” says William Dellecker, HeartLand’s chief development officer. “We also hire seasonal guest workers on H-2B visas, a program that has had bi-partisan support for decades. Unfortunately, it’s been lumped in with larger immigration issues. On top of that, the government shutdown slowed H-2B approvals. These dynamics have only increased our efforts to recruit and return high-quality local workers in each of our markets.”
Longer-term, HeartLand views developmental opportunities as an investment in keeping top quality employees. Dellecker states, “Our company has to be an attractive place to be competitive. We are committed to being a company where employees can advance. Ongoing training and development are investments we are making in people. In fact, the current president of Signature Landscape started on one of themow crews 29 years ago.”
Reach Out to New Generations and Different Workforces
GirtonLLL Transport specializes in the transportation of agriculture chemicals, general chemicals and petroleum products. Not only do they seek drivers with a valid Commercial Driver’s License (CDL), but also hazmat transportation certification. Considering the nature of their freight, it’s common for companies like GirtonLLL Transport to hire applicants with years, preferably decades, of experience for the safety of both drivers and the public. In a perfect job market, experience can be a prerequisite to employment. In today’s market, experience can exclude potentially exceptional drivers.
Bob Fasso, GirtonLLL Transport’s chairman and CEO, is willing to reach out to a younger generation and a different workforce to find drivers. He is changing the company’s recruiting message and internal training processes to meet candidates where they are. “Many ads for drivers state, ‘Must have 10 years of experience or must have 20 years of experience.’ Obviously, that is going to exclude a younger market, which is where your new workforce comes from,” explains Fasso. “We’ve changed our recruiting message so that it isn’t exclusionary. Of course, the younger generation is going to be less qualified. GirtonLLL Transport offers them a path. If a driver has a CDL, we’ll certify him or her in hazmat transportation or other specialized certifications. You must be willing to train and continuously train. Embedding that in your culture is ultimately cheaper than constantly recruiting.”
GirtonLLL Transport also is targeting a different workforce to fill their drivers’ seats. The military is a natural sector. “We connect with military personnel who are in charge of helping soldiers who’ve completed their duty transition to civilian life again. Veterans are great candidates for our specialized industry,” says Fasso.
To effectively reach the younger, connected generation, companies must be online and actively monitor their online reputations. Fasso explains, “Everything is reviewable online today. Your reputation as an employer is no different. You’re responsible for letting people know about your company. The younger generation expects to find online reviews, and those endorsements help applicants understand what to expect about working for you,” says Fasso. “Every day, an employee or customer says something nice. Create a process to get those compliments online and have your leadership team help manage that process.”
For GirtonLLL Transport and others in the transport industry, it’s important to remember the number one thing that keeps a company successful is its drivers.
The Best Solution to Recruiting New Employees is Retaining Existing Ones
High driver churn rates exhaust the resources, budgets, efficiency and profitability of companies in the transportation sector. Driver churn is a double whammy in an industry facing employment shortages that have no foreseeable end. Apple Bus Company, a leader in providing student transportation services located in Cleveland, Missouri, is an industry exception.
Mike Oyster, Apple Bus Company’s founder and president, says, “We presently spend more on driver recruitment, training, driver wages and benefits as a percent of revenue than at any point in the company’s history and more than I have seen in my 40-plus years working in this industry.” In the tight labor market, substantial sign-on bonuses and wage jumps are common practices, which have a domino effect on all transportation companies.
Yet, Apple Bus Company’s driver churn rate is better than their larger competitor’s churn rate. Oyster attributes it to being school bus drivers’ contractor of choice. He explains, “To some degree, we tailor what we do to the wants and needs of each unique driver group. Ultimately, it comes down to the culture that we work very hard to establish and maintain. If drivers respect and feel good about the company they work for and the local management team, they are more likely to stay and much more likely to recruit their friends and family to drive for Apple Bus.”
Each company in Great Range Capital’s portfolio has their own approach to recruiting and retaining employees in a tight labor market. But, the results they get are why we invest in Heartland businesses: top quality employees working for talented leaders who’ve created a successful company by any measurement.