Talent shortage creating recruitment and retention headaches

Ken Pelczarski | TLT Career Coach March 2022

Unprecedented demand for all levels of workers poses challenges for the lubricant industry.

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Note: In the survey results in this article, views expressed are those of the respondents and do not reflect the opinions of the Society of Tribologists and Lubrication Engineers. STLE does not vouch for the technical accuracy of opinions expressed in this article, nor does inclusion of a comment represent an endorsement by STLE.

We have all been adapting to an unprecedented job environment in the lubricant industry for the past two years due to the ongoing COVID-19 pandemic. Employers are facing extreme challenges in attracting new talent and retaining current employees. Individuals are frequently facing tough decisions regarding whether to leave or stay with their current employer.

The lubricant industry has historically experienced challenges in attracting recent graduates and other new talent. Industries such as foods, pharmaceuticals, consumer products and personal care usually have an easier time attracting new talent. They typically have more brand awareness and often are perceived as more glamorous and stable (less cyclic) than the lubricant industry. On top of these traditional reasons for talent shortage in the lubricant field, we now have two major reasons for the current shortage.

Let’s examine why we have a serious talent shortage in this pandemic job environment. I believe that the current shortage is due to a combination of two major influential factors listed here:

1. Many professionals, skilled labor and other industry workers have left the lubricant field either temporarily or permanently during the COVID-19 pandemic.
a. The labor participation rate has recently been at a 45-year low of 61.7% compared to the pre-pandemic rate of 63.4%. Approximately five million people have exited the labor force since the start of the pandemic, about half of which were early and natural retirements (most of these retired individuals will not return to the work force).
b. There are a multitude of reasons why many individuals are not participating in the work force (listed later in the article).

2. There are a record number of job openings throughout the U.S. since the summer of 2021.
a. The number of job openings in the U.S. reached a record high of 11 million in July 2021. In contrast, total hires in July 2021 were only 6.7 million. Job openings have been hovering around 11 million ever since.
b. There are simply not enough people in the work force to meet the industry’s high demand for goods production and services. According to the Bureau of Labor Statistics, there were 67 unemployed workers for every 100 job openings in October 2020.

Here is a detailed breakdown of the many reasons for our current labor shortage. Each of these factors has contributed to some degree to the job environment in which employers are having great difficulty finding, hiring and maintaining necessary talent.

REASONS FOR LABOR SHORTAGE
• COVID-19 pandemic safety risk
- Many individuals have wanted to eliminate the risk of acquiring COVID-19 from the work environment, especially during the first year of the pandemic.
• Retired due to the COVID-19 pandemic
- Many workers have retired earlier than planned due to COVID-19 risk in the work environment, especially if they were going to retire soon anyway.
• Childcare concerns
- Affordability and availability have become big issues for many families.
• Spend time with family
- COVID-19 risk was a good reason for many workers to stay home and spend time with family, whether it was to work on home projects, assist with caregiving or for other personal reasons.
• Time to evaluate career goals
- Many individuals found the pandemic to be a perfect time to take a leave of absence from work and plan the next step in their careers, perhaps involving a career change.
• Quit job because of issues with employer
- If individuals were discouraged about the future of their current job or were dissatisfied with their employer, they became likely to resign even without another job lined up.
• Plan to start own business
- Many industry professionals found it to be a great time to leave their jobs and start their own businesses, especially if they have always wanted to run a business. On-the-job COVID-19 risk is a common motivating factor.
• Remote work not available
- As remote work became prevalent during the pandemic, many individuals decided to leave the work force until they could find the ideal remote or hybrid work arrangement. This is especially true if these workers got a taste of remote work for the first time and learned how happy and productive they could be.
• High demand for goods and services
- The pent-up demand for more goods and services since the pandemic downturn in business has created a record number of job openings that cannot realistically be filled in the short term.
• Stay-at-home compensation
- Extra unemployment benefits through September 2021 as well as a couple of rounds of federal government stimulus checks have kept many individuals out of the work force.
• Vaccine mandate
- For those companies that decide to implement a vaccine mandate policy, they will inevitably lose a significant percentage of valuable employees who are unvaccinated. These employers will then experience a shortage of talent. At the time of this writing, the Supreme Court has ruled the vaccine mandate unconstitutional for private employers.

Here I have listed a few obvious consequences of talent shortages in the lubricant industry.

CONSEQUENCES OF LABOR SHORTAGE
• Difficulty recruiting talent
- Employers cannot easily find and attract the number of workers they need to hire to meet the increased demands for goods they produce or services they provide.
• Difficulty retaining talent
- Most companies have lost valuable and supposedly happy employees who often are being recruited and enticed financially by multiple employers.
• Employers offering greater compensation
- Many employers are finding it necessary to offer higher compensation packages than they ever have in the past to attract talent.
• Employers offering remote and hybrid work
- Employers need to try to satisfy the desire of more new and existing employees than ever to have a remote or hybrid work arrangement. This is not always possible or easily accomplished depending upon the type of position.
• Employers offering more time off
- A big trend right now is for employees to want flex time or more time off to spend time with family or accomplish other personal goals. Employers often acquiesce to these requests due to the current labor shortage.
• Employers upskilling and reskilling
- Because it is so difficult to hire new talent in this job environment, employers are finding it necessary to spend the time and money to retool current employees or provide them training to acquire new skills.
• Business closings
- Countless businesses of all types and sizes have closed during the pandemic due to labor shortages, especially small businesses in the hospitality, food service and entertainment fields. The Wall Street Journal estimates there were about 200,000 extra business closures (on top of traditional numbers) during the first year of the pandemic.
• Inflation
- Inflation rose 7% in 2021, which is the highest rate since 1982. The high inflation rate is largely due to labor shortages, high raw material costs, product availability and supply chain issues.
• Supply chain problems
- Serious issues developed in 2021 with our supply chain. This has negatively affected product availability and timely shipping. The U.S. has consistently experienced a labor shortage of about 80,000 truck drivers during this crisis.

Opinions on difficulties in recruiting and retaining talent were gathered from my survey of more than 600 lubricant industry professionals in September 2021 from which I received 55 responses. My survey questions focused a great deal on what employers were experiencing during the second half of 2021 versus pre-COVID-19.



I want to thank every person who responded to this confidential survey. Responses are the primary basis for my TLT Career Coach columns in the January, March and May 2022 issues and also were the basis for my presentation, “State of the lubricant industry pandemic job environment,” that I presented on Nov. 8, 2021, at the STLE Lower Ohio River Valley Section (please email me if you would like a copy of this presentation).

In my September 2021 survey, I asked 23 questions of which 22 were multiple choice. Some survey questions are the basis for subject matter in this article and will be examined further. I hope you find it interesting to see how your views align with survey respondents.

Survey respondents to the questions here are composed of key decision-makers (i.e., company owners and middle to upper level managers) as well as sales, marketing or technical professionals with varying levels of decision-making authority. Survey questions, respondent comments and data analysis are covered here in each of three separate categories:
1. Recruiting talent
2. Retaining talent
3. 2022 versus 2021.

RECRUITING TALENT: A LUBRICANT INDUSTRY CHALLENGE
How difficult was it to recruit talent for open positions during the second half of 2021 compared to pre-COVID-19?
10 of 41 (24%) said, “Extremely difficult.”
11 of 41 (27%) said, “Somewhat difficult.”
20 of 41 (49%) said, “About the same as pre-COVID.”
0 of 41 (0%) said, “Somewhat easier.”

Respondent comments
• We have not tried, but I would not want to be trying to hire for any position these days.
• Extremely difficult. No one is applying for our job openings.
• Extremely difficult. Struggled to get candidates and many were not interested in relocating at this unusual time.
• Finding the right candidate is difficult.
• We are located in an area with limited available people having the experience we need. We are having to train and keep our fingers crossed they won’t get hired away.
• Extremely difficult. People don’t want to work or do physical labor.
• Finding qualified help is still an issue and will be post-pandemic.

Data summary: 21 of 41 respondents (51%) stated that it was either “extremely or somewhat difficult” to recruit talent during the second half of 2021 compared to pre-COVID-19. The previous comments also show that it is hard to locate qualified candidates, let alone hire them.

Did your company need to offer higher compensation packages to attract job candidates during the second half of 2021 compared to pre-COVID?
1 of 39 (3%) said, “Yes, much higher compensation as well as being creative in other areas.”
4 of 39 (10%) said, “Yes, significantly higher.”
13 of 39 (33%) said, “Yes, somewhat higher.”
21 of 39 (54%) said, “No, about the same level of compensation.”

Respondent comments
• We are considering it due to nobody applying for our job openings.
• New employees are seeking more flexibility as a priority over increased compensation.
• The amount paid for the position has not increased that significantly, but the experience level of the individuals is lower. Productivity wise, it is a significantly higher cost.
• Dependent upon the position.

Data summary: Nearly half, 18 of 39 respondents (46%), stated that higher compensation packages were necessary to attract job candidates during the second half of 2021 versus pre-COVID-19. These types of job offers are now common in the lubricant industry but may upset internal equity among existing employees.

RETAINING TALENT: A LUBRICATION INDUSTRY CHALLENGE
How difficult has it been to retain talent in the current job market?
4 of 52 (8%) said, “Extremely difficult.”
14 of 52 (27%) said, “Somewhat difficult.”
33 of 52 (63%) said, “About the same as pre-COVID-19.”
1 of 52 (2%) said, “Somewhat easier.”

Respondent comments
• I might wish to increase headcount, but the entire world has decided to play musical chairs, so we are really too busy trying to replace people leaving.
• I have not seen a change in rate of movement of personnel.
• Somewhat difficult. We raised wages for hourly personnel and offered a one-time bonus to all employees.
• We are not planning to increase headcount, but we are bleeding employees. We are a company of 120-125 employees, and six have left in the past month. Unfortunately, our company has not kept pace with increased salary or compensation package (such as work from home). Because of this, we expect more people to leave and to have a difficult time finding suitable replacements.
• Somewhat difficult. We are a very small company of seven people. If we lose one to another company, it has an impact even though it’s just one person.
• Somewhat difficult. Workers are looking for better pay, more benefits and less physical labor.
• We have always provided excellent pay, benefits and work flexibility/training to our employees, thus have never experienced difficulty attracting and retaining employees.

Data summary: 18 of 52 respondents (35%) stated that it is either “extremely or somewhat difficult” to retain talent in the current job market. I have learned from several of my own clients that they have lost multiple employees to competitors, with those individuals sometimes receiving 30%-40% salary increases.

In your opinion, are lubricant industry employees more loyal to their employers now versus pre-COVID-19?
0 of 49 (0%) said, “Yes, much more loyal.”
3 of 49 (6%) said, “Yes, somewhat more loyal.”
35 of 49 (72%) said, “About the same level of loyalty.”
11 of 49 (22%) said, “No, somewhat less loyal.”

Respondent comments
• Somewhat less loyal. There is more opportunity for employees to change companies. Companies are desperate to hire in some cases.
• The senior-level employee is definitely more loyal to the company; the newer personnel are temporary employees for two or three years, then they move on and up.
• I believe about the same loyalty, but the isolation and remote working conditions are having an effect on relationships.
• I think it depends. Lower-level employees across all industries are losing loyalty to companies that underpay them.
• Somewhat less loyal. Due to competitive offerings in the job market, job change is more common now than pre-COVID-19.
• Employees with lower paying jobs and fewer benefits are quick to move on. Larger companies that can offer really good benefits probably have a more stable workforce.
• About the same. Loyalty is a two-way street.
• Somewhat less loyal. Workers have left because they find better paying jobs that don’t require as much attention to details.

Data summary: A significant number of employers, 11 of 49 respondents (22%), stated that employees were “somewhat less loyal” in the second half of 2021 versus pre-COVID-19. Only three of 49 respondents (6%) stated that employees have been “somewhat more loyal.” Comments indicate that lower-paid and newer workers are less loyal than higher-paid and senior-level workers.

What level of growth opportunities were available to employees at your company during the second half of 2021 compared to pre-COVID-19?
0 of 51 (0%) said, “Much greater opportunities.”
19 of 51 (37%) said, “Somewhat better opportunities.”
27 of 51 (53%) said, “About the same level of growth opportunities.”
5 of 51 (10%) said, “Somewhat less growth opportunities.”

Respondent comments
• Somewhat less. Many positions require additional training or education for movement, and this has been restricted due to the COVID-19 pandemic, so this has reduced the opportunity for growth/change.
• We were very careful to communicate regularly with our employees that their jobs were secure.
• Somewhat better. We hope to offer better benefits, including schooling, more lunches and bonuses.

Data summary: A considerable number of employers, 19 of 51 respondents (37%), stated they offered “somewhat better opportunities” in the second half of 2021 versus pre-COVID-19. Only five of 51 respondents (10%) stated they have been offering “somewhat less growth opportunities.” It is encouraging that employers seem to be trying hard to take care of their existing employees by offering new training and/or new responsibilities.

Has your company had to take special measures to keep employees happy during the pandemic? (Percentage total exceeds 100% because respondents were allowed to choose more than one answer.)
12 of 53 (23%) said, “Yes, we have raised compensation and/or benefit levels.”
6 of 53 (11%) said, “Yes, we have offered more opportunities for personal growth and additional responsibilities.”
31 of 53 (58%) said, “We have offered remote and/or hybrid work arrangements.”
16 of 53 (30%) said, “No, we have been conducting business as usual.”

Respondent comments
• More free lunches, gift cards, giveaways and morale boosters.
• Additional compensation was extended to hourly personnel, and a one-time bonus was offered to all personnel to help maintain employees and improve morale.
• We increased communications and included social happy hours.
• Yes, we have raised compensation. We also have offered more opportunities for personal growth. During the height of the COVID-19 pandemic, we offered free lunches on Fridays during most of 2020.

Data summary: A considerable number of employers, 37 of 53 respondents (70%), stated they are taking one or more special measures to keep employees happy during the pandemic. Employers have raised compensation and benefit levels. They also have offered more opportunities for personal growth. The most popular measure being taken by employers by far is to offer remote and/or hybrid work arrangements, mentioned by 31 of 53 respondents (58%). Once again, it is encouraging to see that employers are working hard to keep existing employees happy.

2022 VERSUS 2021
I asked the following closing question in my September 2021 survey.

Do you have any final thoughts on how the lubricant industry job environment will be different in 2022 versus the second half of 2021?

Final comments in the “recruiting and retaining employees” category are listed here.

Recruiting and retaining employees
• Hopefully we will be able to fill the vacant positions we have and retain current employees. We have had a difficult time getting people to show up for in-plant interviews after the initial video chat/phone calls.
• Companies should pay attention to competitive job offers and provide incentives for seasoned employees to stay and to grow within organizations.
• The lubricant industry job environment is on a roller coaster ride now. It will become more difficult to attract talent into a declining industry that is petroleum based.
• I think there will be a lot of personnel movement because of a shortage of good workers.
• An awful lot of knowledge and relationships are leaving the industry. Where retirement was a constant trickle, an awful lot of people are just done all at once.
• It’s more important for us to hire early career, tech-savvy, quick learning entrepreneurs than more experienced, less tech-savvy employees. Also, our industry is far too homogenous. We need much greater diversity, which is what we’re striving for in our company.
• I believe the number of job openings will increase in order to address an expected increase in labor shortages (via the COVID-19 pandemic or otherwise) and worldwide materials shortages.
• Companies should always be open to onboarding good talent. Better people will usually benefit the company no matter the business conditions.

What does the current labor shortage mean for employers? What does it mean for employees and job candidates? There are a record number of jobs to be filled throughout the U.S., which translates into many career opportunities out there for individuals. It does, however, remain difficult, as always, to find the right fit whether you are an employer or a job candidate.

Consider taking the following actions if you are an employer during the labor shortage.

Employee retention
• Place increased attention on employee retention to lessen necessary external recruitment.
• Work hard to retain all employees, not just “A” players.
• Communicate more frequently with employees.
• Listen closely to employees’ concerns, desires and goals.
• Offer remote or hybrid work arrangement if it is important to an employee.
• Offer flex time and/or additional time off as requested by an employee. 
• Offer increased childcare, tuition reimbursement, healthcare or other benefits.
• Build morale by establishing new group programs, events and activities.
• Inform employees of planned and possible growth paths for them.
• Retool, upskill and retrain existing employees to fill open positions.
• Encourage and financially support new education to put more growth opportunities on the table.
• Evaluate and consider upgrading internal pay scale.
• Implement a new bonus incentive plan for exceptional performance.
• Be careful about creating internal inequities through any of the actions previously stated.

Employee recruitment
• Take special measures to stand out among competition.
• Promote positive features of working for your company in job descriptions, advertisements and interviews.
• Make competitive financial job offers (learn first how other companies compensate for similar positions if possible).
• Adapt to new trends in the pandemic job environment.
• Learn what is important to a job candidate, and maximize the job offer within that category:
- Remote or hybrid work
- Flex time, extra time off or vacation
- Base salary
- Performance-based incentives
- Childcare benefits
- Tuition reimbursement
- Healthcare.
• Be clear about growth opportunities and possible career paths within the company.
• Be creative regarding where to find candidates (e.g., technical societies, military, trade shows, industry meetings, community events or online discussion groups in your field).
• Hire not-so-obvious strong candidates who have the right skill set but limited pertinent experience (upskill as needed).
• Hire solid, reliable, steady, well-thought-of, long-term employees who may not be “A” players but will make a positive impact.
• Be 100% transparent about company culture to maximize a job candidate’s comfort level.
• Be technology-ready for tech-savvy job candidates to find your company and apply for a position.
• Be careful about creating internal inequities through any of the actions previously stated.

Consider taking the following actions if you are an employee or job candidate during the labor shortage.

• Maximize the opportunity to achieve your career goals in the current job market that has high demand for your talents.
• Research your current market value through industry contacts, articles and surveys.
• Evaluate and update your career goals in this pandemic job environment (e.g., remote or hybrid work, new learning, more time with family, career change, start a business).
• Explore thoroughly whether you can achieve your goals with your current employer (I am a firm believer in making the most of your current job before changing employers).
• Avoid being reactionary and jumping too quickly to a new employer.
• Network actively and get a feel for what the job market has to offer.
• Communicate regularly with your employer to establish a comfort level.
• Share with your employer what you have learned about the job environment and your market value.
• Stress how satisfied you are with the company and how things could be even better through mutual discussions and planning.
• Express to your employer what is important to you regarding both short- and long-term goals.
• If remote or hybrid work is important to you, present a well-thought-out reasonable plan to your employer promoting that you will be even more motivated, productive and successful
with this arrangement.
• If you are searching actively for a new position, pursue as many opportunities as you can within a short time span so you can be confident that you have found one of the very best long-term opportunities for yourself in this dynamic job market.
• When you do find the position you want, negotiate strongly for things that are important to you (e.g., base salary, bonus incentives, tuition reimbursement, remote or hybrid work, flex time).

In my 45 years of lubricant industry recruitment, demand for all levels of talent has never been higher while supply of talent has never been lower. In this unprecedented pandemic job environment, employers and job candidates alike need to adapt to new hiring trends to achieve their goals. I am hoping we return soon to a balanced job market in which employers can find the talent they need to operate more efficiently and profitably while job candidates can find excellent career growth opportunities.

I wish all lubricant industry professionals a year of personal growth, health, happiness and prosperity in 2022. Ken Pelczarski is owner and founder of Pelichem Associates, a Chicago-based search firm established in 1985 and specializing in the lubricants industry. You can reach Ken at (630) 960-1940 or at pelichem@aol.com.