Hiring Workers In a Tight Labor Market

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Last May, the U.S. unemployment rate dipped below 4 percent, the lowest it had been in 18 years. June’s rate ticked up to just over 4 percent, but the current tight labor market is here to stay. This is posing problems for anyone hiring both skilled and unskilled labor. All industry sectors are affected, especially those with a customer-facing component, like the quick lube industry.

In an interview with Marketplace, Tony Lee, vice president and head of talent acquisition at the Society for Human Resource Management discussed how companies are going to have to adapt.

“Companies are scrambling to try and find the right people for the right positions,” he said. “A lot of companies are realizing they’re going to have to change their standards a little bit.”

For industry leaders like Valvoline Instant Oil Change (VIOC), they’ve recognized this need to change. As the second-largest quick lube business in the U.S., closing in on 1,100 locations nationwide, that means adaptation.

Matt Furcolo, vice president of Company Operations for the Valvoline brand, indicated that while this is a challenging time in terms of staffing their nationwide locations, his team is up to the task.

“We’re growing our business, so finding good people that share our values is increasingly important, especially given the tightness of the current labor market,” Furcolo said.

It’s not enough to simply talk about “attracting” good people, however. Valvoline is taking tangible steps in recognizing the current labor landscape, according to the company’s Human Resources Director, Regina Green.

“Yes, it’s a challenging time to attract employees, but I’m fortunate that Matt and other managers recognize that,” she said.

Green detailed some of Valvoline’s initiatives on the hiring side: things like emphasizing the importance of the manager/employee relationship.

“We’re very big on the employee value proposition,” Green added. “If you want to differentiate yourself from your competitors, you need to give employees a reason to become part of our team — working at Valvoline is something you can be proud of, and we make sure our employees feel that.”

An area that might not be obvious to everyone is the importance of valuing individuals for what they bring to a culture. Green mentioned that the company is moving away from their standard uniform, which dates back more than three decades. Also, she said that Valvoline routinely surveys their instant lube employees, and a recent survey identified that in warmer-weather areas of the country, being able to wear shorts at work was important. According to Green, that change is in the process of being rolled out.

“It’s all about people,” Furcolo said. “I saw this displayed in one of our shops and I think it captures our focus on putting people first: ‘Valvoline makes the oil: our people make the difference.’”

Indicating that he wasn’t just offering empty words, Furcolo pointed to the company’s “Hands-on Assistance Program,” for employees facing a natural disaster or other extraordinary circumstance.

“This is an example of our culture of caring that we’re always striving toward,” he said.

All VIOC team members going through a difficult time — whether it’s personal hardship or a natural disaster — can apply for financial assistance.

Green also talked about ways the company continues evolving.

“Tattoos used to be an issue in hiring. We’ve recognized that there are other aspects to hiring that are more important,” she said.

While Valvoline does a criminal background check as part of the overall hiring process, criminality doesn’t necessarily rule out a candidate. Again, this is all part of expanding the pool of candidates necessary for filling positions in the ever-tightening employee-hiring realm.

Uniforms and more flexibility about appearance matter. However, all things being equal, it sometimes simply comes down to pay in attracting the best candidates.

Indeed.com’s Jed Kolko, the company’s chief economist, speaking at their Interactive Conference in Austin, Texas, earlier this year, made the case that job seekers are now in the “driver’s seat” in terms of finding a job. This includes the salary bargaining process.

“We’re already seeing some wage growth, though not as much as many people expected,” he said. “Paying people more needs to be a starting point.”

Valvoline’s Green mentioned that in Kentucky, where the firm’s corporate headquarters are, the minimum wage currently stands at $7.25 an hour. Currently, they start employees at a rate well above that, generally $11-$12 an hour. Of course, pay rates vary, so Green emphasized that this pay differential is factored across other regions of the country.

While pay is important according to Kolko, he also advised employers that they also need to “broaden their search parameters,” as well as finding ways to “train imperfect new hires.”

When Missouri’s state unemployment rate fell below 4 percent a year ago, Brian Hahs, district manager of Glueck Enterprises, had already begun implementing the types of things Kolko was suggesting. Hiring for six quick lube and tire shops his company operates in the Show Me State, forced his hand in taking a different track than was possible when employers had the upper hand. Hahs and owner Charlie Glueck are working diligently to get ahead of the issue.

“We work really hard at it. Charlie and I have been on a run for the past three years, working with the local community college and others to try to get a handle on this,” Hahs said.

For Hahs and Glueck, they recognize these hiring challenges are going to remain, due to demographics and other structural issues. One place Hahs believes they are “laying up capital for the future” is working with local school principals and other educators. This is their attempt at impressing on elementary school-age students the opportunities available for students who pursue post-secondary training at a technical school. Hahs said in Missouri, the state’s A+ Scholarship Program offers scholarships to eligible high school graduates who go on to attend a participating public community college, which includes vocational/technical programs.

“This is a great opportunity for a young person to pick up an Associate’s Degree, in addition to obtaining a hands-on automotive background,” he said.

Hahs said he uses online advertising exclusively, including Indeed.com. While he said he gets responses to his postings, the problem becomes applicants simply not showing up for interviews.

“I am in the habit of calling and confirming my interviews. Even when I call someone the night before, it’s not uncommon for them not to show up,” Hahs said.

In addition to not showing up for interviews, Hahs has found many applicants can’t pass Glueck’s mandatory drug-testing.

“I’ve had so many applicants fail drug tests that now, we have them pay for the $30 test. Then, after they’re hired and are with us for 90 days, we’ll reimburse them,” Hahs said.

Hahs stressed “soft skills” are especially important — these are the skills like the ability to communicate, listen and have empathy, the types of qualities that contribute to a positive customer service experience.

The hiring market will continue to be challenging for anyone looking to bring on new employees. Clearly Valvoline’s Green and Furcolo are doing more than simply wringing their hands about it. Along with Glueck’s Hahs, they’ve taken a proactive approach that will help them differentiate themselves from their competitors.

They know it won’t be easy, but they also recognize that demographics and labor market challenges call for a new way of operating if they want to properly staff their shops and service their customers.

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