Impact of Labor Supply on Investment, Site Selection and Development

Strategies to Identify and Develop New Talent in a Tight Labor Market

How does the labor supply impact investment, site selection and development at a time when workers have become more of a scarce resource than at any time in recent memory? Panelists grappled with that question in a CRE.Converge 2022 session moderated by Bret Swango, CFA, senior vice president at Colliers.

Swango set the stage by noting that a recent Deloitte survey found that the labor shortage is the number two concern of CEOs, right after inflation. Job openings remain near all-time highs, he said, while the demand for blue-collar labor has abated slightly. Yet wage pressure remains, with two job openings available for every unemployed individual.

Julian Alvarez, the commissioner representing labor at the Texas Workforce Commission, said his state has been working to upskill its workforce, keeping an open mind about whether workers necessarily need four-year college degrees. Using state and federal money, Texas has targeted underrepresented populations, those leaving incarceration, and military veterans, he said.

“We’re listening to employers, and they’re telling us what they want,” Alvarez said. “Colleges are playing a major role. … [Students] are going to graduate with marketable skills. We need a skilled workforce.”

Such efforts have included a registered apprentice program through which high school students are taking community college coursework to be medical assistants; by the time they’re in college, they’re already employed in the healthcare field, he said.

Steve Johnson, chief people and compliance officer at Bluecrew, discussed his company’s mission to match W-2 workers with available jobs, typically in light industrial settings. He said that employers need to think about greater agility in hiring.

“You are no longer thinking about hiring one worker for one job, training them and getting them up to speed, and having them as a full-time worker,” Johnson said. “You are competing with Door Dash, Instawork, and every other app out there. The power dynamic changes. How do you think about instead of one worker for every FTE [full-time equivalent], having seven workers? How do you think about on boarding and training programs? How do you have a more flexible and agile workforce that meets your demands but also meets workers’ demands so they stay with you?”

Bluecrew is constantly onboarding new workers to its platform and has them ready to roll, reducing the typical staffing firm timeline from days to hours, Johnson said. “We’ve built into our platform that the customers get to see the Bluecrew worker clocked in for that day,” he said. “You can pick and choose how you want to schedule. We provide onboarding, initial general training, and we expect you to provide specific workplace training.”

A smoothly running workforce system requires a rotating flywheel comprised of companies, communities and colleges that need to integrate their efforts, Johnson said. “Don’t think about what talent you need, but what talent you are supplying back into the community, to keep that flywheel moving,” he said. “That’s the ongoing life force in the community: incremental skills, building from entry level to middle and upper level.”

Zebra Technologies conducts annual warehouse vision studies of between 1,000 and 2,000 users of the company’s products, global and cross-industry, focused on operations and information technology; the most recent incorporated the thoughts of warehouse associates, said Mark Wheeler, the company’s director of strategy and supply chain execution. Where past surveys often focused on order accuracy and turnaround time, labor concerns have taken center stage.

“The perspective has changed from, ‘labor is an infinite resource,’ to, ‘it’s a constrained resource,’ and therefore it’s a risk to the business,” Wheeler said, adding that, “85% of respondents said they prioritize labor as a top issue, and over 90% of end-users said they’re more likely to work for a company that provides technology that’s up-to-date and easy to use.”

Robotics and automation solutions that have entered the market in the last five years are fundamentally different in terms of flexibility and scalability, Wheeler said. “You can deploy them to a smaller facility and relocate them from one facility to another,” he said. “In the American market, we tend overbuild based on long-term capacity. In Europe, they tend to build out and occupy what they need. These new technologies will allow us to be more like Europe in that regard.”

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