Bosses’ challenge: Keep top workers from leaving
With the local jobless rate now below 5 percent, more employers feel pressure to make pay competitive and offer perks to get and keep key employees.
Seattle Times business reporter
In April, Jennifer Hwang’s bosses at Seattle startup Julep told her to report immediately to a conference room for an unexpected meeting.
Approaching, she noticed the room’s windows were papered over so that no one could see in or out.
“It just seemed like a very serious issue,” said Hwang, 28.
But anxiety soon turned to joy: Julep’s executives had called Hwang there to express appreciation for her hard work and to give her an iPad Mini.
“I felt like Oprah,” said Jane Park, founder and CEO of Julep, a fast-growing beauty brand backed by venture capitalists. “It was my most fun day of work ever.”
As the economy improves, corporate profits increase, and the job market strengthens, some employers are getting creative to hold on to key employees.
The Seattle area’s jobless rate has fallen to 4.8 percent from 7.2 percent a year ago. If workers during the recession had little choice but to hunker down in their jobs, the tighter labor market now signals more options.
Indeed, the number of workers voluntarily leaving their jobs in the Western U.S. is up more than 10 percent over the past two years, data from the U.S. Bureau of Labor Statistics show. Some human-resources professionals are calling 2013 “the year of retention.”
“I can’t tell you how many employers are calling me and saying, ‘We haven’t done anything with pay for at least three to five years. I need to make sure we’re still competitive,’ ” said Nancy Kasmar, manager of compensation and benefits consulting at Washington Employers, a human-resources organization with more than 1,000 member businesses.
“They have to start working on the employee value proposition.”
Kasmar said retention requires not only a competitive salary and benefits but also an array of nonfinancial strategies, including career-advancement opportunities, work-life balance and recognition from managers.
At Julep, Park said she competes with the likes of Amazon.com for software engineers and Starbucks for brand marketers.
She can’t afford the gold-plated benefits of Seattle’s large, publicly traded companies, she said. So instead, she offers a range of perks, from free organic snacks and staff yoga to stock options if and when Julep goes public.
“We’re launching comprehensive health benefits now, but at that point we had very rudimentary benefits,” she said of the April gadget giveaway to Hwang and the entire Julep staff. “This was a way to reward people and say thank you with the resources we had.”
So far in 2013, the Seattle area has gained an average of 4,800 jobs a month, an 80 percent increase from the same period two years ago.
The region benefits from strong growth in its health-care and technology sectors, which recovered quickly from the recession, said Katie Bardaro, lead economist at PayScale.com, a Seattle-based company that tracks self-reported salary information.
“Workers in those industries are more likely to see not only increased job opportunities but also fairly strong pay,” she said.
In general, worker pay fell as much as 2 percent in 2010 and began to rebound in 2011, according to PayScale. Since then, local workers have reported pay raises, on average, of as much as 3.9 percent, compared with a national maximum increase of 2.9 percent.
Workers with in-demand skills in health care and technology are doing the best financially, but workers in less-robust industries also are at least starting to see a pickup in hiring.
About 23 percent of employers in the Seattle area plan to hire more workers in the third quarter, up from 15 percent in the previous three months, according to a survey by staffing firm Manpower.
Job prospects look best in construction, manufacturing, transportation and utilities, wholesale and retail trade, financial activities, professional and business services, and leisure and hospitality, reports Manpower.
“It’s just tougher to hire right now because the unemployment rate has dropped and demand is increasing,” said Manpower spokesman Tyler Dion.
To fill positions, employers are giving bonuses when employees successfully refer them to job candidates. They’re also “looking under rocks they haven’t explored before,” Dion said.
“They may not be hiring for the exact skill set they want. Instead, they’re hiring people with a cultural fit and then teaching the skills,” he said.
The economic recovery also is prompting some employers to step up their efforts to engage employees or risk losing the best ones to other companies.
“We’ve seen a significant uptick in the last 18 to 24 months in organizations talking about employee engagement, leadership development and more effective communication around career pathing,” said Brandon Cherry, who runs the San Francisco office of management consulting firm Hay Group.
A Gallup survey recently found that only three of 10 Americans were engaged at work, while 50 percent were “just kind of present” and 20 percent were actively disengaged or miserable.
Gallup noted that workers in still-struggling sectors faced fewer opportunities and may be holding onto their jobs out of necessity rather than choice.
The millennial generation was more engaged than other age groups in the workplace, but they also were the most likely to say they’ll quit in the next year if the job market improves.
As hiring picks up, labor activists are raising concerns that low- and mid-skill workers have seen their living standards eroded amid paltry wage growth.
Thursday, some workers at fast-food restaurants across the country, including Seattle, walked off the job to demand a $15-an-hour “living wage.” And in SeaTac, activists are trying to put on the November ballot a measure increasing the minimum hourly wage to $15 for airport-related businesses.
The Economic Policy Institute of Washington, D.C., recently released a report showing that between 2007 and 2012, real wages declined for all but the top 30 percent of earners nationwide, despite continued productivity growth.
Marilyn Watkins, policy director at the Seattle nonprofit Economic Opportunity Institute, sees firsthand the pay gap among workers with different skills. Four years ago, her son graduated college with a computer-science degree and instantly began making more money than she did.
“He’s very employable, with vast amounts of discretionary income,” Watkins said. “But there’s a lot of twenty-somethings who still live at home, can’t afford to move out and are working part-time jobs.”
She added that when her nonprofit has internship job openings, it’s inundated with applications from people who graduated from college several years ago.
At WhitePages.com, an online directory-assistance service, staff vacations, free dinners and Fridays off during the summer are just some of the perks it offers its employees to keep them excited about work, said Chief Financial Officer Jason Eglit.
$40 an hour
The company also is spending about $2 million to spruce up its downtown Seattle offices, including the addition of a whiskey bar and kegerator (a special sort of refrigerator for draft beer). And to attract new hires, particularly software engineers, it pays its summer interns $40 an hour.
“There’s no doubt a war for technology talent here in Seattle,” Eglit said, noting that the battlefield includes Amazon and Microsoft, as well as startups.
“So far this year, we’ve grown our work force by roughly 30 percent, and we’re very much interested in hiring more.”
Local publicist Roger Nyhus, president and CEO of Nyhus Communications, said employee recruitment and retention is on top of his mind “24-7.”
He said he’s promoting employees more quickly, giving on-the-spot rewards such as gift certificates to local spas, and offering $500 for each referral that leads to a new hire. Also, employees may now bring their dogs to work on Fridays.
“Harder to find”
“It’s getting harder to find super-qualified people,” he said. “We have to offer a competitive package. And once they’re on board, we have to keep them engaged long term.”
New hire Gina Maffei, 35, who joined Nyhus this past spring after a decade in Washington, D.C., can attest to the pickup in hiring. A California native, she began looking for a job on the West Coast a year and a half ago but became discouraged and gave up a few months later. Then, last fall, recruiters contacted her through the social-media website LinkedIn.
She said she took a small pay cut in exchange for a relocation package and has since received a raise.
“I’ve only been here five months,” she said. “But already, I’ve been approached by a couple of recruiters.”
Amy Martinez: 206-464-2923 or email@example.com. On Twitter: @amyemartinez