As jobless rates sink, employers feel a shift in labor market

Bruce Yakley just ignited a firestorm in South Dakota by bluntly telling a newspaper that his manufacturing company can't keep hourly workers because millennials don't seem to value hard work.

Yakley, CEO of a truck trailer manufacturer called Trail King Industries based in Mitchell, complains about young workers showing up late or declining to work overtime when two more hours would get an order out the door.

And nothing bugs him more than never knowing at the start of a shift just how many of them will decide to skip work that day.

What he's describing is a serious business problem, not some sort of personal gripe. Trail King's order backlog already extends through the end of 2015. And despite the company's best effort, 279 recent hires as assemblers, painters and welders were fired or quit. There was a net gain last year of just one.

Yakley might have a point about changing values toward work, as an explanation of why this has been happening. On the other hand, the baby boomers would likely have been a sorry collection of slackers 30 years ago if they could have just rolled out of bed any day they wanted to work and easily gotten jobs.

That's the reality of the job market now in Mitchell.

What's to be learned here is not just that millennials need to be taught to care about their work. It's that finding and keeping the right employees has to be a strategic priority for any business as we approach an era of near zero percent unemployment.

Yakley's problem finding and keeping employees is one that business managers just about anywhere in the country will have to face one day, Hisel said, given demographic trends. Being in rural Mitchell, Yakley just got it first.

Yakley got lit up on social media for his inflammatory comments about young workers to the Sioux Falls Argus Leader newspaper earlier this month.

But in a conversation he comes across as matter of fact about recruiting and retention, not particularly provocative.

He clearly thinks the work ethic has eroded, but he also readily volunteered that he's got younger employees in the shop he thinks of as "rock stars." And he's certainly been paying attention to what's been happening in a tightening labor market.

"As far as I am concerned, the unemployment rate in the Dakotas is zero," Yakley said. "If you want a job, there are jobs available. We're in a small town. We are 15,000 in the middle of farm country. And there are a thousand open jobs in this town."

About 550 folks work in the production area, building big trailers for the trucking industry. As business picked up coming out of the Great Recession, hiring and retaining more workers became one of the company's biggest challenges.

Among the ideas Yakley said he implemented is offering an "unlimited" number of scholarships at the local Mitchell Technical Institute and hiring a person just to recruit high school students. Trail King recruiters even go into middle schools now to talk about careers in manufacturing.

To the obvious question of whether Trail King just needs to pay more, Yakley said someone out of high school makes $13.50 per hour. Trail King provides bonuses for attendance and retention, and another bonus for referring an employee who stays an entire year. Profit-sharing checks are handed out once a quarter, and the last one was $370.

"We are above the 75th percentile in Mitchell" in compensation, he said, and with bonuses and some overtime a "20-year-old welder can make $50,000 his first year." Maybe $50,000 isn't a lot in the Twin Cities or Chicago, he said, but it sure is in Mitchell, where the median household income is about $43,600.

The company has also tried a few things to keep workers. It threw overboard a system that canned a worker who collected eight points, at the rate of half a point for being late or a full point for missing work altogether. Too many people were getting fired.

"I had one employee I thought was a good young person, he worked here about six or seven months," Yakley said. "He never showed up again to work. Just no call, no show. So I saw him at the Wal-Mart, and I said 'Paul, where were you?'

"He said, 'I'm not working. I just wanted to take a month off. I'll find a job again when I'm ready.' "

Wages clearly will be going up in Mitchell, but paying 50 cents an hour more to someone who simply wants to take a month off — and easily can — doesn't seem like it will make much of a difference in keeping him.

Hisel said it's important to understand that there's nothing unique about Trail King. That's why the focus of economic development has completely flipped since he took the job in Mitchell 30 years ago. It now has enough employers. What the region needs are employees.

And thanks to Yakley, he added, across the whole state of South Dakota "we're going to have a conversation about generations, about work and what it means, and what it will mean in the future. That's never a bad thing."