Employers are getting creative to woo workers amid labor crunch

FORT WAYNE, Indiana – Ethan Pearl had been searching for a job for almost a year when he walked into General Motors Co.’s on-site hiring event at the truck plant here on a rainy May afternoon.

The area doesn’t have many jobs that match his graphic design background, and working in fast food “wasn’t fun,” the 26-year-old Fort Wayne resident said after filling out an application to become a temporary worker making Chevrolet Silverado and GMC Sierra trucks.

To meet his budget, he’s looking for anything above $12 an hour, and GM’s offer of $16.67 an hour to start fits the bill.

Pearl had an offer in hand from GM that day and he was pretty sure he’d accept it: “This is the best one I’ve gotten.”

In the past, getting a job offer from GM or another automaker could take weeks, but the pandemic has taught businesses they have to act quickly if they want to get new employees in the door at all.

In today’s labor market, employees have options.

They are getting through the hiring process faster, they’re making more money and they have more of a voice.

The auto industry is adapting: Employers are cutting educational attainment requirements, offering incentives like sign-on bonuses and relaxing certain screening policies.

“What we’ve discovered through the process is speed is critical,” said Ash Winnett, GM’s executive director of human resources, global manufacturing.

“Because there are so many people in the market with job opportunities, we’ve realized that in order for us to really make sure that we’re at the front of the queue is to move a candidate or an applicant from ‘I applied’ through to ‘I’m offered a job’ as quickly as possible and that’s where we really seem to have made a difference in the last 12 months.”

Expedite the process

Companies like Amazon.com Inc., Apple Inc., Bank of America Corp. and Target have boosted their minimum wages to between $16 and $24 in response to a more competitive labor market.

The Detroit Three, meanwhile, point to their workers’ premium health care benefits and the sizable profit-sharing checks full-time employees received earlier this year.

But with wages and raises determined by negotiations with the United Auto Workers that happen every four years, they have to look to other levers to attract and retain the workers they need.

GM’s hiring leaders realized online job postings weren’t as effective as an on-site career fair where a candidate applies in person and is interviewed that day.

GM’s Fort Wayne plant is holding on-site hiring events through the end of June.

Applicants fill out an application, then get a background check and drug screening all in one day.

At the first event on May 19, 50 applicants came through and 33 were hired.

The plant that employs about 4,400 on three shifts is looking to hire about 400 for full-time and part-time temporary employees that GM says have a pathway to permanent employment.

United Auto Workers Local 2209 Shop Chairman Rich LeTourneau, who represents workers at the plant, has to balance output requirements and contract obligations like vacation procedures.

“We got a schedule we try to keep, and the reason we try to keep our schedule is because we want future products here. And the manpower and shortage of parts right now … the combination of both, it devastates our agenda.”

While a combination of factors, from concerns about contracting COVID-19 to a lack of child care, may have played a role in workers exiting the job market, manufacturing employment is seeing an uptick.

In the U.S., total nonfarm payroll employment rose by 428,000 in April, with the manufacturing sector posting one of the largest gains with 55,000 jobs added, according to the Bureau of Labor Statistics.

Manufacturing employment continued to trend up in May, the Bureau said on Friday, with 18,000 jobs added.

Rising inflation could push people back into the job market.

“Most economists have expected for a while economic imperatives were going to drive labor force … get us back to a higher degree of labor force participation. And it may be that’s what this bout of inflation will do,” said James Hines, a professor of economics at the University of Michigan.

Marques Norman, 39, came 250 miles from Warren, Ohio, to Fort Wayne to seek a job at GM after tiring of being moved around by temp agencies.

“It’s General Motors. Who don’t want to work for General Motors?” he said, sitting in the plant lobby waiting to apply.

Jobs, Norman said, are “real scarce, and when they hire you, it’s only for peanuts. I just want to build a career.”

He got the job.

Beyond bringing applicants on-site, GM has expedited the hiring process.

The automaker switched from a hair follicle drug screening to a mouth swab, which is “almost instantaneous,” Winnett said.

To get people in faster, LeTourneau said at the Fort Wayne plant, GM has halted testing for marijuana.

GM spokeswoman Kim Carpenter said the automaker is “currently conducting some pilots to determine which specific substances we test for during these screenings.”

The automaker has also removed other parts of the hiring process, including a production simulation.

“Other companies aren’t asking candidates to spend two hours on a production simulation,” Winnett said.

“We believe … if you have the right attitude, the right behaviors, and the, quite frankly, athleticism to work in a production environment, that we can train you.”

Jeep and Ram maker Stellantis NV still conducts dexterity tests, but the automaker has halved their length to an hour and a half that a candidate can self-schedule, said Erica Brewster, Stellantis’ head of talent acquisition for North America.

The reduction was among reforms made in the middle of last year to streamline the process, resulting in the hiring of 5,500 people of 10,000 who expressed interest in 2021.

Candidates no longer need to have a high school diploma or GED.

Stellantis removed a math and measurements assessment as well as an interview.

New hires can be in a plant as soon as two weeks after initial communication with the company, down from four.

Stellantis still conducts a drug screening that tests for marijuana. It uses urine tests, which are less sensitive than those that test blood or hair.

Last year, the company began holding in-person hiring events every other month after hearing applicants complain about not getting a response from the automaker for months.

The next event will be 9 a.m. to noon Wednesday and Thursday at the Conner Center in Detroit. Online preregistration with Detroit at Work is required.

“We have a very full pipeline right now,” Brewster told the Detroit News last month.

Todd Dunn, president of United Auto Workers Local 862, which represents workers at Ford Motor Co.’s Kentucky Truck and Louisville Assembly plants in Louisville, said the automaker is competing with the likes of Amazon and United Parcel Service for employees: “We’re tending to steal workers from each other.”

Ford (along with UPS, Kroger and GE Appliances) participates in an initiative, called Everybody Counts, from Kentucky Gov. Andy Beshear’s administration that aims to help Jefferson County Public Schools graduates get a job at one of the participating companies, enroll in post-secondary education, or both.

Dunn also has seen more temporary autoworkers being converted to full-time status recently, and more leniency in hiring back employees who previously worked at the plants there.

“The complexity is super high on retaining workforce,” he said. “Overall, I think we’re doing a pretty good job managing it.”

Ford spokeswoman Kelli Felker said the automaker “made a number of changes in the way we hired for positions at our manufacturing facilities.

“We have held job fairs, hired recruiting specialists focused on different regions where our larger manufacturing facilities are located, streamlined the length of time it takes to be hired and executed hiring-focused social media campaigns on platforms including Facebook and Instagram.”

Wages rising

Impact Management Services, a Southfield-based staffing agency that serves mostly manufacturers, has seen wages climb for its 40 Metro Detroit clients, from an average of $13.50 in spring 2020 to $16.90 in May 2022.

“It’s an employee market now,” said Joe Pomaranski, vice president of solution development at Impact. “At Wendy’s, you can make $16 an hour, and the light industrial world of the automotive industry has to keep pace.”

In January 2019, the average hourly pay for a motor vehicle production employee in the U.S. was $29.87.

That increased by 4.6% to $31.23 by January 2022, according to Bureau of Labor Statistics data.

Wages for production employees at motor vehicle parts plants have increased almost 19%, from $21.40 in January 2019 to $25.44 in January 2022.

Employers have adapted by loosening applicant requirements, including changing what drugs are included in screenings.

At Impact, some clients have excluded THC, Pomaranski said, and treat it like alcohol. That means they only test for it if there is some type of incident.

Pomaranski tells new clients: “Anything that you do from a candidate pool at this point that adds restrictions is just narrowing the pool.”

In the auto industry, pay and benefit disparities are making temporary jobs a harder sell, said Scott Houldieson, an electrician who’s worked at Ford’s Chicago Assembly Plant for more than 30 years.

Temporary workers, for example, aren’t eligible for the supplemental unemployment benefit, or SUB pay, that full-time employees receive if they’re temporarily laid off when a plant halts production, something that’s become common during the past year and a half of supply chain shortages.

“If you’re a temporary worker and you’re laid off and collecting unemployment, are you going to continue waiting for that call back? Or are you going to go find something else?” said Houldieson. “If you want to keep workers, you need to make them feel good about their job.”

Ford last week made a move applauded by the UAW: The automaker will convert nearly 3,000 temporary workers to permanent full-time status ahead of schedule and provide all hourly employees health care benefits on the first day of employment.

The changes, announced as part of a $3.7 billion investment announcement, come nearly a year ahead of contract negotiations with the UAW.

The union on Tuesday raised its weekly strike pay from $275 to $400.

The supplier struggle

Auto suppliers are in a particularly difficult position.

The supply-chain issues snarling production have depleted inventory levels and raised prices – boosting automakers’ bottom lines.

But suppliers with fixed-price contracts have to negotiate for increased revenue to cover rising raw material and labor costs.

Some executives say they’ve even taken pay cuts to cover higher wages for employees.

The unionization movement sweeping the country arrived last year at Dakkota Integrated Systems LLC’s new Detroit plant that makes instrument panels for Jeep Grand Cherokees.

At the 500-person plant, the starting wage is $15.50 per hour with incremental wage increases throughout the four-year contract with the UAW, which was finalized in December.

Roslyn Wallace, the supplier’s chief human resource officer, doesn’t see a labor shortage, even as more than 25% of Dakkota’s hires don’t stick around. Rather, she sees a cultural change.

“People no longer have to go and get a full-time job,” Wallace said.

“Young folks, they’ve got this entrepreneurial spirit. They don’t want to have to abide by rules, punch in and go to work. They like to have a lot of discretion with choices that fit their livelihood.

“We are no longer at the top of the pecking board.”

Dakkota is looking to lean into that shift.

A new college tuition assistance program offers $5,250 per year to employees so long as they progress in their degree or certification, with no requirement to stay at Dakkota afterward.

Dakkota also is in discussion with the UAW to institute a part-time option.

The employees wouldn’t receive benefits, but their pay would be slightly more: probably between $16 and $18 per hour, Wallace said.

“They might work with Uber and pick up three days at Dakkota,” she said. “We’re going to try it.”

Having enough workers is also a challenge for smaller shops like Troy-based Precision Global Systems Inc., a contract manufacturer and machining supplier that employs roughly 50 manufacturing workers.

Typically the ones who stick around have manufacturing experience or have family members who do, PGS President Richard Najarian said.

PGS is offering $100 bonuses for referrals, and when employees work their full 40 hours for a week, they will receive a gas gift card to help offset the increased cost of getting to work.

“We have to invite more workers to come in in order to get qualified workers to stay versus right before COVID,” Najarian said. “If you want a consistent schedule working for 40 hours with the possibility of overtime hours, manufacturing is the way to go.”

At Tier One automotive supplier Denso Corp., job candidates no longer need manufacturing experience, or a high school diploma or GED for production positions at the company’s our thermal manufacturing facility in Battle Creek.

The Southfield-based company is accepting applicants with backgrounds in other sectors such as hospitality and retail and supporting them with mentoring programs and technical training.

“The last couple years since the pandemic started, Denso has experienced the same challenges as our competitors with the labor market,” said April O’Neal, director of human resources for North America.

“It’s pushed us over the last couple years to be more creative in some of our approaches and even enabled us to try things that we’ve never tried before.”

New initiatives at Denso include offering English as a Second Language, or ESL, classes for candidates coming from Battle Creek’s large Burmese immigrant population. And several Denso sites, including in Battle Creek and Southfield, have dropped a THC testing requirement for job candidates.

“The pandemic has allowed us to be much more open to new sources of talent, and it’s worked out really well for us,” said Santosh Singh, Denso’s vice president of human resources for North America.

Despite the challenges, John Walsh, president and CEO of the Michigan Manufacturers Association, is optimistic about the future of manufacturing in the state.

Where his members were reporting just a few months ago that they were struggling to attract applicants for open positions, they’re now seeing multiple people apply per posting.

“And now as we get increasingly past the pandemic, we’re starting to see people returning,” he said. “Wages are up. So we’re hoping that the future is going to be better but it’s still darn tight right now.”