Help Needed: In tight labor market, employers are paying more, changing job requirements

Brasserie Provence server Emmalee Whitlock prepares tables for dinner service. | Photo by Boris Ladwig

More people are quitting their jobs, federal statistics show, and that’s hurting especially small Louisville retailers and restaurants, which already had been scrambling to find people to fill open positions.

About 2.4 percent of people with jobs quit them in July, the highest rate since the recession, according to the Bureau of Labor Statistics. In retail, the number hit 533,000, or 3.3 percent, and in accommodation and food services, it reached 690,000, or 4.9 percent.

While wages so far have risen little, employers are beginning to increase their starting pay and taking other actions — offering insurance, more flexible hours, or more hours — to keep their employees and to find more applicants for open positions. Nonetheless, the Louisville labor market remains tight.

Brasserie Provence, a French restaurant in eastern Louisville, just this month started offering health benefits through the Kentucky Restaurant Association. The restaurant still needs more cooks and servers but has adapted to the staff shortage by cross-training employees and dropping some more complex menu items.

Kern’s Kitchen, a Louisville institution that makes the famed Derby Pies, has increased its starting wage — but still deals with people who don’t show up for an interview. Many, in fact, don’t even call to say they won’t be there.

The owners of Rainbow Blossom, a natural food market in eastern Louisville, recently narrowed applicants for a marketing assistant position to four, but all had taken other jobs before they were offered the position.

Guy Genoud

“Everybody is looking for people,” said Guy Genoud, co-owner of Brasserie Provence.

If you drive down streets in commercial areas, “help wanted” signs are everywhere, he said.

That’s especially true in the restaurant business. The city is growing, Genoud said, but the restaurant sector seems to be growing faster.

As a family-owned restaurant, Genoud said he cannot generally offer the kinds of wages or benefits that national chains can, which means the French eatery occasionally loses employees, from dishwashers to sous chefs, to downtown establishments that pay more.

Sometimes, they come back a few months later because they realize that the higher expenditures for gasoline and parking downtown cut into their wages, Genoud said, and because they miss the brasserie’s family atmosphere.

Nonetheless, he struggles especially when he has to find help in the kitchen, in part because people who work in a burger place cannot simply come into the kitchen of a French restaurant and prepare escargots, duck foie gras terrine or Chateaubriand.

Thankfully, Genoud said, the brasserie has a good core of people: Of his 20 employees, 80 percent have been with him for years.

Genoud said that although he’s currently looking for workers including a hostess, he can’t allow a staffing shortage to compromise quality or service. He has responded by cross-training employees and by reducing the number of entrees the brasserie offers. With fewer staffers, he said, he has had to carefully think about how costly and time-consuming a dish may be to execute and whether it’s worth keeping it on the menu.

And when the restaurant gets very busy, Genoud said, he asks employees to stay longer. He said he’d rather pay good employees overtime than waste his time and money on people who don’t stick around but jump from one new restaurant to another to take advantage of the early rush after a grand opening.

People who have an interest in working at the brasserie can stop by the restaurant and ask for Genoud or the chef. If applicants have experience, especially in a French restaurant, that would be great, he said, but attitude, common sense and a willingness to learn are more important.

“To be in this profession, you have to have a passion for it,” he said.

Employees’ market

A cashier at Rainbow Blossom helps a customer. | Courtesy of Rainbow Blossom

At Rainbow Blossom, managers are dealing with high turnover, especially among recent hires.

“Newer people don’t stick around,” said Summer Auerbach, the store’s second-generation owner.

The business employs about 100, including food service workers, office staff and cashiers. Rainbow Blossom offers a 401(k) plan with company match, employee discount and health insurance. The lowest starting wage is $10, up about $1 from a year ago.

“People can always find a job that pays more,” Auerbach said.

At least Rainbow Blossom can offer a fun, flexible, laid-back, indoor work environment that sets the business apart from industries in which employees have to deal with heat, humidity and bug bites, she said with a laugh.

The store used to attract job applicants just by putting a sign in the window but has expanded its message to social media and online job portals. And while it gets applicants and issues job offers, it is struggling to get positive answers.

Rainbow Blossom recently narrowed 30 applicants for a marketing assistant to four, but by the time it sent out job offers, each of the candidates had already accepted a different position.

“The people have the choice,” Auerbach said.

Alan Rupp

Alan Rupp, president of Kern’s Kitchen, told Insider that the Derby Pie maker, too, has increased its starting wage by about $1, to $11 or $12, depending on the position.

While the business still receives plenty of resumes for open positions, many of them just don’t show up for the interview.

“No show, no call,” Rupp said.

It’s bad for business, he said, because employees lose precious time as they block out parts of their day for interviews and tours.

Shorter hiring window

“That’s a symptom of a tight labor market,” said Charles Gascon, regional economist with the Federal Reserve Bank of St. Louis.

Recruiting companies are pushing business owners and hiring managers to condense their hiring time and more quickly extend a job offer, he said. Unlike in the first years after the recession, businesses can no longer expect to leave job postings open for a month.

“That time to hire has definitely declined,” Gascon told Insider.

Charles Gascon

Employers also increasingly are reducing — or even eliminating altogether — preferences for experience or certain skills, which allows them to increase the candidate pool.

Gascon said that employers in some sectors, including food, retail and hospitality, are trying to overcome the labor shortage by investing in technology, such as automated checkout counters, which also increases worker productivity, the rise of which has been the primary driver for increasing wages.

The Fed still expects strong GDP growth in the third quarter, somewhere near 4 percent, thanks to continued business investment and consumer spending, he said.

People who previously had been too discouraged to look for work are still coming off the sidelines and re-entering the workforce, which means the labor pool is still growing, Gascon noted.

In other cases, businesses also are simply increasing the number of hours that their employees are working. And that, too, in many cases means workers have more money to spend, which boosts economic growth.

Source: U.S. Bureau of Labor Statistics

A tight labor market also can allow people who have languished in a job with which they are not satisfied to look for new opportunities. Once those workers find new jobs, Gascon said, they tend to be reinvigorated, which also boosts productivity, GDP growth and wages.

“I think that overall, the tight labor market is a sign of positive economic growth,” he said.

Auerbach, too, said that while businesses, including hers, may be struggling more to find or retain employees, the low unemployment rate and high numbers of people with jobs mean that more people have more cash to spend, which boosts business revenue, including at Rainbow Blossom.

“I’m not going to complain too much about the job market,” Auerbach said. “It means business is good.”