Issue link: https://iconnect007.uberflip.com/i/1433652
70 SMT007 MAGAZINE I DECEMBER 2021 Matties: What advice do you give our industry about labor? DuBravac: It's clearly a very competitive mar- ket. It will be very competitive in 2022. Prices will be going up and, as an economist, it looks to me like the reserve wage has gone up. We've never come anywhere close to having this many open jobs in the economy—as of the last count, almost 10 and a half million open jobs. We've never seen levels like this before. At the same time, we still have a fair amount of unem- ployment. Why haven't some of these individ- uals who are unemployed taken these jobs that are open? Some of it looks like the reserve wage has gone up. ey're not willing to work in certain jobs unless the total compensation package is improved. But beyond that, workers are also looking for a more holistic view of their work environment. For younger generations, like Gen Z, some want to be associated with a good cause. ey want to believe in the mission of the organization. For others, it's training opportunities. By my estimate, probably about a third of those who are unemployed are not getting a job because there's a skill mismatch—the skills gap. Some- times it's the employer who thinks they're not qualified. Sometimes it's the worker who is maybe not applying to certain jobs because they feel they're not qualified. It goes both di- rections. Some companies are taking an inter- esting innovative approach, what they call "re- turnships" as opposed to an internship, which might be targeting a young, first-time employ- ee. Instead, returnships can offer training op- portunities to those people who have been out of the workforce for some time. Speaking of benefits that might be attractive, help with childcare is something that employ- ees are struggling with. ey can't go back to work because they don't have childcare. I think we've lost roughly 100,000 workers in child- care services from pre-pandemic levels. is is about 10% of the number of workers who had been employed in this sector. is has a rip- ple effect. Childcare providers have fewer em- ployees so they're not able to accommodate as many children. And then suddenly that child- care center is booked up. As a result, parents can't find childcare so they can't go back to work. Maybe some of these employers offer in- house childcare, childcare credit, or some- thing else to help facilitate that. ere are some real tactical options that can help employees overcome some of these obstacles, and some of them will cost money. Companies will need to take that into account as well. Matties: With this labor gap, it shis the calcu- lus for business owners regarding automation. DuBravac: Right, a higher cost of labor changes the labor-capital equation. You have seen au- tomation show up in lots of interesting plac- es. ere's been some automation in the Ital- ian wine industry because they can't find la- bor to pick grapes and do other manual tasks. White Castle is using a robot called Flippy to cook french fries because they're struggling to find workers. White Castle recently announced that they cold-called, sent emails, made phone calls, and sent texts to 550,000 individuals who had applied to work at the restaurant in the last four years. I think they had about 30,000 who showed interest. So, you've got this company For younger generations, like Gen Z, some want to be associated with a good cause. They want to believe in the mission of the organization.