11/10/97 SIGN OF THE TIMES: HELP WANTED

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SIGN OF THE TIMES: HELP WANTED
All across the U.S., employers are strapped for workers
In central Florida--home to Walt Disney World, Universal Studios Florida, EPCOT center, and hotel rooms second in number only to Las Vegas--the unemployment rate is less than 3%. No one is more aware of this than Moira Oliver, director of human resources for the Hyatt Orlando. She has been forced to look as far away as Poland, Hungary, and Ukraine for men and women to make beds and do laundry for $5.85 an hour. In October, she was off to cooking schools in Switzerland and France to persuade students to do internships in Orlando hotel kitchens.
In the U.S., Oliver has begun to troll for workers in and around cities such as Brownsville, Tex., where unemployment is 11.6%. There she sweetens her job offers with promises of discounted rates on U-Haul rentals to defray the costs of moving to Orlando.
With 3,300 more spots to be filled in the area over the next six months as Disney World and Universal Studios open new attractions, Oliver admits she's in ''desperate straits. And it's only going to get worse.''
She's far from alone. In Detroit, Sears, Roebuck & Co. is offering charities $100 for each person they recommend and Sears hires. L.L. Bean, the catalog retailer, says it is building a new call center in Waterville, Me., a 90-minute drive north from its home base in Portland, because of Waterville's higher unemployment rate. In Pleasanton, Calif., computer-systems integrator Vanstar Corp. has 61 recruiters prowling the country for engineers.
The markets may be teetering, and a glut of manufacturing capacity in Asia may be driving prices of some goods into a deflationary spiral. But the overall U.S. economy remains robust, and in places such as Orlando, Portland, and Pleasanton, employers are more concerned about the local unemployment rate than the latest gyration of the Dow. Says Vanstar CEO William Y. Tauscher: ''There's not only an existing shortage, but the demand/supply equation is getting worse by the month.''
All around the nation, employers are finding that they must cough up more in salaries and benefits and pay more for recruiting to get fresh hires. The shortage was first apparent 18 months ago, in information-technology companies. ''Now, it's everywhere,'' says Gail D. Fosler, chief economist for the Conference Board.
GROWTH BRAKE? The Federal Reserve Board has kept a careful eye on the increasing labor-market tightness. But so far, because of continuing efforts to downsize by some companies, productivity gains from technology, and more aggressive use of outsourced and temporary labor, the inflationary impact has been minimal. Even so, economists like Fosler say that the rising price tag for a worker is already eating into corporate margins.
Thus the tight labor market leaves employers stuck between two unpleasant alternatives. If they pay higher wages and recruiting costs--in an economy that doesn't tolerate price hikes-- they may have to sacrifice profits. And if they choose to forgo hiring, they most certainly will sacrifice growth. ''So far, many would rather slow down growth and keep costs under control,'' says Northwestern University economist Michael K. Evans.
For those with an order backlog, there may not even be that option. Take Boeing Co. On Oct. 22, it reported a loss of $696 million and a $1.6 billion pretax charge, which it blamed in part on its inability to find qualified workers. Even after hiring some 38,400 workers, Boeing continues to hire 150 to 200 employees each week. And to satisfy this large appetite, Boeing has been cherrypicking candidates from some of its best parts suppliers. The technique has backfired: Suppliers are now falling behind in their orders for Boeing. ''We have had a lot of turnover, and it's because people are going to Boeing,'' says Bob Findley, president and CEO of Pacifica Engineering Inc., a design firm in Mukilteo, Wash. Starting with a staff of only 32, Findley has had to hire 30 people since the start of 1996.
Across the nation, on the Gulf of Mexico, Marine Service Industries Inc. is also feeling the pinch. The $100 million shipbuilding and repair company, based in Morgan City, La., has been coping with shortages for 18 months in both skilled and unskilled workers because of a surge in oil-and-gas exploration and deepwater drilling. With 350 jobs to fill, the company has had to turn down hundreds of millions of dollars' worth of projects because it lacks the labor force to complete them.
Because competition is so stiff for workers, Marine Service's wages have increased about 30% in the past 18 months, with the average wage for a welder now at about $13 an hour. Even unskilled workers, says Marine Service CEO Michael Clute, are commanding a premium. ''We have low-skilled workers being paid high-skilled wages,'' he says. ''If a skilled worker comes into the shipyard, is drug-free, and has no legal problems, we will hire him on the spot.'' The company is recruiting across the country, paying candidates $100 just to come for interviews. It has also hiked benefits packages and reserved a block of 75 hotel rooms to house out-of-state workers.
MORE PERKS. Then there's the scramble for holiday help. Monitoring a tightening labor market, the U.S. Postal Service started scouting in August for 40,000-plus temporary workers to handle the onslaught of holiday mail. Most years, the search starts in October. Even with aggressive advertising and recruitment efforts, such as dedicated phone lines to list openings and letters to former workers urging them to return, postal execs still fear they will be shorthanded. Kmart Corp. is more confident it will meet its holiday staffing needs. Still, it's taking extra steps, such as stuffing inserts into bills to Kmart credit-card holders advertising part-time seasonal jobs and adding employment advertising to the Internet site of its jumbo SuperKmart stores.
More and more, employers are throwing enticements--besides plain old cash--at prospective workers. Gates Rubber Co. started paying relocation costs for some new hires. Texas Instruments Inc. is doubling its 401(k)-plan contribution. And Hyatt says a ''critical'' staffing shortage for hotel jobs has prompted it to offer benefits, such as housing and transportation services, in resort areas. The chain also uses about 100 foreign workers under special work visas, including the 30 Oliver recruited for Orlando.
Oliver has plenty of companions when it comes to contracting for labor overseas. The cap of 65,000 visas for skilled foreign workers was reached in early September, before the end of the government's fiscal year, which hasn't happened in recent history. The number of applications last year rose to 138,306, up from 116,502 applications in 1995.
It's an interesting turn of events. In large part, this unprecedented economic upturn owes its life to companies that learned to stay lean and mean. Now, those same companies are relearning something else: They need people to keep that growth machine stoked.
By Gail DeGeorge in Miami, with bureau reports

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