Paul Van Metre:
All right, all right, here we are. People are starting to stream in. Welcome, everybody, to this month’s webinar. I’m particularly excited about this one because when I talk to pretty much any shop that I go visit, it is amazing how almost every single one talks about how labor and shortage of workers is one of their top things that they have to deal with. So Nick is going to share some interesting insights and some solutions on how to make that better. So we’ll just give people a couple more minutes to stream on in here. In the meantime, as for some of you that may have been on our webinars in the past, I’d always love to start with letting people share where they are joining from. So if you want to share where you are… I recognize some names, but not most. So go ahead and share where you are joining from if you’d like, and then we will get started here. Annapolis, Maryland, thanks for kicking us off, Nick.

Nick Meyers:
Yep.

Paul Van Metre:
Aurora, Colorado. Very good. Phoenix, Arizona. Hey, Yvonne, good to see you here. Yeah, if you are chatting with everyone, and looks like that may not be the default setting. Some of you’re just chatting to the panelists. Awesome. Well, let’s go ahead and get started. So Nick, welcome, thanks for joining me.

Nick Meyers:
Thanks for having me.

Paul Van Metre:
Yeah, you bet. So Making Sense of the Labor Market, Where Have All The Willing Workers Gone? So we’ll get into that in just a second. We always like to start sharing our mission. We deliver powerful manufacturing software by deeply understanding our client’s challenges in order to meaningfully improve their businesses and then turn their communities. And I can’t think of a better way to try to convey that with understanding labor challenges and how to overcome some of those so people can hire more employees and improve their communities. So let’s talk about that today. So Nick, do you want to give a little bit of introduction to yourself?

Nick Meyers:
Sure. I’m the president and co-founder of Werkberry. We are a candidate generation solution, primarily technical, meaning, that we apply digital advertising technology to cast a much wider net to generate more candidates for small business, and got quite the concentration in areas that seem to have the biggest need, which is manufacturing, construction, healthcare, education. And so we combine that with a done-for-you service for small business, like it’s never had been put together before for small business like that. And that means that we need to be really in tuned with what’s happening in the labor market and the jobs industry.

Paul Van Metre:
Yeah. Yeah. Awesome. Very good. Well, thanks again for collaborating with us on this. And for those of you that may not know me, I’m Paul, one of the co-founders here at ProShop, and I used to own a machine shop and had to hire lots of machinists. So I know the struggles of trying to find them and do that. Oh, a couple housekeeping items, I guess. If you have questions, which I hope and expect people will, please put them in the Q&A, that’s easier to keep track of than the chat tool, and then we’ll get to those at the end. And there will be a recording of this… Oh, sorry, wrong direction. So if you need to leave partway through, don’t worry, we will e-mail you the recording, probably tomorrow or later today. So, all right, Nick, why don’t you kick us off here.

Nick Meyers:
Sure. Quick agenda of what we’re going to cover today is, if we’re going to talk about the labor market in particular, you can’t really do that without a high-level understanding from a macroeconomic standpoint. They’re mixed in. So we’re going to do a little bit of looking at things like this pending recession, is it coming, is it not coming? It seemed like the recession that never was, that’s came around, and now, it’s looking more and more like a soft landing, hopefully, likely, knock on wood. And we have to do a little touch point on inflation. I promise, Paul, I wouldn’t go off the deep end on that because I can get wrapped around the axle on macroeconomics.
And then of course we’ll dive into, in more depth, the labor market. So unemployment is way down, obviously, meaning, employment is way up, the U-6 is at 7.2, which is very, very tight. Traditionally, that averages at 10.3 or so. And labor participation, which is the real driver of what we’re experiencing here, we’ll dive into that. And then of course, we ought to end it with some action items. What can we do now to survive in this tight market? Next.

Paul Van Metre:
Awesome. Real quick, what is U-6? Or are you going to explain that on this next slide?

Nick Meyers:
Yeah. So actually, I’ll explain that on a slide or two after this.

Paul Van Metre:
Okay. No worries. Go for it.

Nick Meyers:
Yeah. So inflation. The numbers you hear about all the time, the talking heads on all the news shows are always talking about CPI. And the argument is whether or not they include fuel, and energy, and housing, the three things that affects everybody. And so it can be very confusing in the CPI when you hear this. And so because it’s been thrown around so much more, people use it. And so it’s still important from a relative standpoint. CPI this month, relative to last month, that still tells you the trends that matter. But the PCE, it’s a better tool to target that, and it’s getting closer to that 2% target market, the Fed likes to target 2% inflation, and the CPI is at 3.6 versus 2.8.

Paul Van Metre:
So sorry, just so I’m clear on this, the PCE, that includes energy and those other core things that… food and energy that-

Nick Meyers:
Actually, yeah, let’s dive into that for a second. See, they both have two lines. They both have the option with and without including food and energy, but housing is sometimes done separately. So they both have that. The difference is that the CPI is, First of all, it’s a survey, where they survey about 20,000 retailers on 80,000 or so items, but all from urban America, that’s the CPI. And it’s looking at the price change from last month to this month. So what was the price of chicken or milk last month versus this month? And that’s the survey, and it’s very urban. The PCE, and that stands for the personal consumption expenditures, it’s not what the price of the things were, but what did people buy? So first of all, it’s much broader, it includes the rural areas, suburban areas, not just urban, and includes a lot more… the denominator is a lot bigger of the things that they look at, including services and so on.
So because of that, the CPI is much more heavily weighted on what we call shelter expend, what’s the cost of rent and housing? And that’s a big number. So when you’re dividing that over a smaller denominator, it affects that ratio more. So the PCE is a better broader indicator, and it’s also incorporates what I call substitutes. So if beef goes up really expensive this month, people may not buy as much of it and they’ll buy chicken. So it’s really looking at if it includes substitutes. So that’s where people are spending versus last month. And so it’s a broader… Does that make sense, that I cover that?

Paul Van Metre:
Yeah. Yeah. And if you can see my mouse, so this darker blue line includes food and energy, and that’s where it’s getting closer to 2% now, right?

Nick Meyers:
Yeah, exactly.

Paul Van Metre:
Okay. Well, that’s news for everyone, I’m sure.

Nick Meyers:
Well, it’s good news in that it may be the Fed can back off of raising interest rates and start thinking about potentially lowering them. But when we talk about inflation in general, I assume people know what that means, but let’s just say, from a definition standpoint, it’s an increase in prices for goods or services due to an imbalance of supply and demand. So a little econ 101, if you remember from college or whatever, it’s usually in a stable environment. The analogy, if you remember, it was used almost ubiquitously, was there’s 100 people on the island, and everybody has $10, and they could make 100 coconuts and everybody buys one coconut for a dollar, and that’s this equilibrium. But then if there is demand pull… I put Taylor Swift here as an example, hey, the stadium only holds this many people and the demand is through the roof.
So prices for Taylor Swift tickets are going up because demand is pulling them up. Same on the coconut island. If, all of a sudden, the rumor was out that coconuts make you live longer and give you prettier hair and whatever, everybody wants more than one. That demand is pulling prices up. That’s demand-pull inflation, which by the way, monetary prices and interest rates can control that relatively well. But then there’s cost-push inflation. These are things when the coconuts… there’s a storm comes through and it wipes out half the coconut trees, and now you can only produce 50 coconuts. And so that’s artificially creating price pressure upward because of supply was hurt, just like we experienced after COVID, China, supply chain wrapped up, Ukraine. And the other thing that can cause supply side issue is labor. When you don’t have enough labor, you’re no longer in the driver’s seat, that pushes wages up, which pushes… is more of a supply side push on that.
Now, the unfortunate mission of the Fed is they’re supposed to balance these two things, unemployment and inflation. And they only have two tools to do it. Actually, if you listen to the news, they’ll tell you they only have one tool, which is interest rates, but it’s really monetary supply, how much money is put out into the system, and at what interest rate. And so they’re really hoping that everybody’s going to believe that raising interest rates is going to tame this type of inflation, when in a lot of the causes were cost-push. And so really, it would require more fiscal policy, not monetary policy, but we have problems with our dysfunctional Congress getting anything done there. But right now, all of that weight is on the Fed, and so all eyes are there. I hope that clears up something, but we can move on to the next slide here and see what matters on top of this inflation that seems to be coming down, knock on wood, that’s partially because the supply chain and other things are leveling off a little bit better.
But what we’re seeing is, if you look at the red line here is consumer loans and credit cards, things like that. And the blue line is personal savings, household savings amounts. So prior to the pandemic, if you look at 2019, 2018, just prior to that, we were on a not necessarily great trajectory, but it was fairly standard, it would stay fairly close to each other over a period of years. And then of course, with the pandemic, all of a sudden, everybody was told to stay home, don’t go to work, but here’s a bunch of money that was more liquid. There was a moratorium on evictions, so you couldn’t actually have to pay your rent and you couldn’t get evicted. There was a pause on student loans. Here’s additional funding for unemployment benefits from the fed, on top of the state.
And in a lot of cases, people were getting paid more than they were when they were actually working, and they had money to burn. So now, all of a sudden, again, that was pushing inflation because people… now they wanted that gas grill, they wanted that RV, they wanted that boat, they wanted that stuff that they had… So that’s where they had some cash flow. And in some cases, you’ll see that the drop… because some people were smart about paying off those debts, or not reporting debts that they didn’t have to pay currently. But as you can see now, we’re on a really scary path, the delta between savings… And so on a larger macro level, that can be a double-edged sword. On one hand, it’s going to be pushing people to demand higher wages because they’ve got bigger bills to pay, and they don’t have their savings, and that type of stuff. But the good news is that, maybe, it pushes more people back into the labor pool. More people are going to have to jump back into work. Okay, next slide.
So we’re going to dive into the real cause of what we’re here for, is jobs and labor. Let’s talk about that. And there are two big problems, good old-fashioned supply and demand. Next slide. All right. So I promised not to try to get into death by PowerPoint, but this is the US employment versus unemployment. So the blue line there represents, on the far left axis, is in millions of people working. You can see that in 1994, it was around 116 million people actually employed. And right now, you can see we have more people employed now than before the pandemic. So that’s what people are saying, “Well, people just haven’t come back to work.” Actually, in terms of raw numbers, we have more people employed now. However, keep in mind, our overall population keeps growing. So if we still had… Actually, I’ll talk about that on the next slide. But this red line here is the unemployment, and the green line down the center, that’s what economists refer to as full employment. And you’ll notice it’s not at zero, it’s at 3%.
First of all, to answer your previous question, this red line is the U-3, not the U-6, this is the U-3. This is what we call headline unemployment. This is the stuff they talk about all the time on the news. Now, it’s a terrible representation because it’s nowhere close to what real unemployment looks like, but it matters from a consistency standpoint. If you’re looking at the U-3 from a year ago or a month ago, it’s all relative. So it’s still relative to where it was. But we think of 3 to 3.5% as full employment because there’s structural issues, meaning that, well, there’s these 10 people out of work and are 10 jobs sitting over here, but the 10 jobs are looking for experienced machinists, and mechanics, and welders, and CDL drivers, and the people that are unemployed are dog groomers, or whatever.
And so there’s a mismatch in skills, that you can never get it 100%. And then when you have a real tight market like this, we have frictional employment where, “I’m okay quitting my job today because I’m very confident that I’ve got options to get re-employed here in short order.” All right. So let’s jump to the next slide. This is the unemployment differences. And so none of which is what you would think of as the actual unemployment. If you just said, “Well, how many people are there in America, and how many of them are not employed?” That should be the unemployment number. Well, if you looked at that number, it would freak you out because it’s going to be like 40%, because it would count a whole bunch of people. So the U-3, that headline unemployment, it literally means people who are able, ready, willing, and looking for work. So if you haven’t been actively applying, and you haven’t been applying for unemployment and so on, when your unemployment runs out, you no longer count as part of the unemployed on the U-3, which is-

Paul Van Metre:
Interesting.

Nick Meyers:
Right. So at least the U-6 includes those discouraged workers who have only stopped because they’re not finding jobs that seem to suit them, and people who are marginally attached to the workforce, and people who are under employed, meaning that they’re working part-time, but they want a full-time job. So it’s a better representation, which is why I tend to refer to it. And so 10% U-6 is pretty healthy, and that means that there’s enough people for you to find people, but not so many that you can abuse them.

Paul Van Metre:
No, it’s 7%. We’re below a healthy mark, where there’s not enough workers.

Nick Meyers:
Yeah. Yeah, that’s absolutely true. Okay, next slide. By the way, we’re looking at the labor market across the country, and it’s pretty ubiquitous. However, it’s particularly pressing for anybody with skilled labor, even though healthcare, and construction, and manufacturing, these are bright spots and growth for the economy, the skill gap is even much greater. And we have not replaced ourselves in those because for more than two generations, the message through all these kids coming up is that, “You should all go to college,” like it’s the 13th grade. And then these kids think that they’re all going to be YouTube influencers, or working for Google sitting on a beanbag, meanwhile, the average age at the American machine shop is 58 years old. So we haven’t been replacing ourselves with that group. And the labor pool trends, that holds true for the skilled blue colors as well, meaning, they also want hybrid, work from home. They’re interested in applying where it’s easy, fast, mobile, no resume required.
They’re not spending their days surfing job boards, just like the rest of them. But the bigger issue is that most of the manufacturers, construction companies, or whatever, they’re still doing old school stuff. They’re putting a sign in the window, or using old job board type of technologies, and saying, “People aren’t willing to work.” Or in a lot of cases, like marijuana as an example, it’s not legal in every state, but the ones that is not legal, and has been decriminalized, or unenforced, and whatever, it’s become so prolific, that a lot of people are going to test out positive for that because they got high on the weekend kind of a thing.
Now, a number of our manufacturers say, “Well, my problem is that it’s a dangerous job, and my workers’ comp is going to require that I still do that.” And so that’s a navigation issue. But if you’re willing to say, “Hey, look, I don’t care what you do on the weekend, make sure you pass this drug test coming up,” and if you ever hear inebriated, you’re fired. So that kind of thing. Anyway, next one. I just want to stick that one in here for-

Paul Van Metre:
Yeah, that’s interesting.

Nick Meyers:
… our audience today. So again, not to be the bearer of bad news, again, these are U-3 numbers, but still, it’s all relative. So the U-3 running around 3.8, 3.9% is tight across the market, but look at where it actually is for durable goods manufacturing-

Paul Van Metre:
Yeah, 2.1.

Nick Meyers:
You’re that white line down there.

Paul Van Metre:
Yeah, the very lowest.

Nick Meyers:
So it’s insanely tight labor pool market. Anybody who wants a job there has one. Next. All right. So labor force participation rates. So with our population, we saw that even though, in the raw numbers, remember the other blue line, employment is actually higher than it was prior to COVID, but given our population growth since 2020, there should be 2.1 million more workers working today if we just had the same participation. We’re off by basically 1%. We went from 63.4, we’re now at 62.5. So that 1% of 200 million workers is 2.1 million people who are not participating. And then the boomers retiring off at a breakneck speed is keeping people out of that. So that’s not all that unanticipated. So this is the labor force participation rate, which is the real-

Paul Van Metre:
So there’s a question here and I’ll go ahead and ask it now, are you saying that about 35% of people just don’t want to work at all that are-

Nick Meyers:
Actually, the raw overall numbers would be actually much worse than that. But now, this is of the potential labor force. So this counts everybody over the age of 16, who is civilian, so not counting the military and so on, and not incarcerated or infirmed. So you take anybody who’s in jail, in prison, or handicapped, or whatever, they’re not counted in that pool. So the one big flaw with this standard is that it includes a whole bunch of people who are retiring. And part of that decline has been because the baby boomers… and we have an aging population that we haven’t replaced ourselves. So as the baby boomers are retiring now at a breakneck speed, this has been happening for a while. So some of that should have been expected. But yeah, the labor participation rates are… that’s the cornerstone of the problem. So actually, skip forward, I think I have something on prime age. Yeah, this I… back one.

Paul Van Metre:
Back one. Okay.

Nick Meyers:
All right. So this is one I prefer to look at in these conversations, it’s the employment to population ratio. Now, the top one is overall, and that shows you, similar to labor participation rates over 16. The employment to population ratio is around 80%, now, 60% overall. But if you come down here to what is a better tool, let’s look at what’s called prime age workers, 25 to 54 years old, you can see that we’re hovering there at about 80.5%, which is, overall, that’s the entire population of the working age, non-infirmed, non-incarcerated civilian population of prime age workers. So that’s pretty tight. But still, 20% of those prime age population is not working. Now, this is a pretty common first world problem. Skip to the next slide, I think it’s the… Yeah. You’ll notice that the G20… When you have a first world nation, a wealthy nation, there’s a lot of families who… it’s a one breadwinner, they have a stay-at-home spouse because they don’t have to work.
People can retire at 50 or 55 because they’ve already made their bones. Then you get the 20 somethings that return from college, and they’re occupying mom’s basement because they’re not going to do that job or this job, and parents are allowing that. So in these first world nations, we have a lower participation rate because they can, because you have choices. Now, but if you look at this, we’re down there towards the bottom, 62.5%. If we could just get as high as Canada, we would have eight and a half million more people in that workforce, and all of a sudden, we’d be at a much healthier U-6 unemployment rate. Now, hey, if we could jump to Germany up there, at 79.8, that’s 45 million more unemployed workers that would be willing in the workforce if we just got to that participation level.

Paul Van Metre:
Wow. So you said 1.4 available and 2.45, what is our available number right now? Is it below 1?

Nick Meyers:
Yeah. Actually, there’s an even better way to look at how many people are available per job opening. Let’s go forward. Oh, actually, I’ve added this slide in particularly for our today’s audience. We were looking at raw numbers and saying, “Look, at 80% of the prime age workers being involved, that’s a percent, percent, percent. Percentage of a big number is a big number, and so on. So it’s good to look at that overall area. But when you look at the raw numbers, it’s very telling to say that we have about 53.5 million… these are [inaudible 00:27:17], by the way, there’s a 16 to 64 years old, so this is working age, and that’s 53 million people in that working age that are just not participating in the labor force. Now, that’s a big number. And for this particular group, if you look at the dark green, the low bar down there, those are these working age, US born men.
And so back in 1960, only 5.3 million working age, US born men were not participating in the labor force. And now, it’s 20 million. That’s 20 million folks that are just not participating in the labor force. So you can see that when you have traditionally male dominated industries, construction, and engineering, and manufacturing, that hurts your pool. So let’s go forward.

Paul Van Metre:
Wow. Yeah, that’s fascinating.

Nick Meyers:
The pain is not spread evenly. So taking a look on the left-hand side here, this is the national job openings versus the number of unemployed workers. And as you can see, we have still over 9 million… 9.1 actually, 9.1 million open jobs right now, and there are 6.1 million unemployed but willing workers, that are participating but are not currently employed. And so that’s more than one-to-one. We don’t have enough to cover one-to-one, but if you look, it’s not spread evenly. If you look at it evenly, there are 68 willing workers for every 100 jobs.
And if you’re in California or New Jersey, you’re a little bit better off, because you’re one-to-one or better, you have more workers than you have openings. And if you’re in the yellow states, you’re feeling that pinch because it’s less than one. And if you are in those orange states, like Colorado, South Carolina, where I am in Maryland, it’s less than half of a worker for every open job that’s out there, and we haven’t gotten into the deep dive in the minutia. And what you can do, by the way, on the US chamber of Commerce, I’ll try to put the link in the chat later, but if you just Google US chamber analysis, BLS data, you can drill down into your state, and in some cases, they’ll have your industry at least high level like manufacturing in general.

Paul Van Metre:
So there’s a question I’ll ask now, “Where do they get the number for how many jobs are open? It’s 9 million number.

Nick Meyers:
Oh, okay. Well, there’s two primary sources. So if you post a job anywhere, you go to old school job boards, you go to Zip, or Indeed, or they take all of those aggregators. And then they also have scrapers for if you post it on your careers page. So they scraped your careers page. We provide careers pages for small businesses that might not otherwise have it. And then the BLS, and the NFIB, and the Chamber of Commerce also do surveys so then they can apply statistics. So they knew how many were before.

Paul Van Metre:
Got it.

Nick Meyers:
All right. And so the bad news is that from a trend standpoint, it’s not going to get any worse. Even if the Fed and this administration are successful in driving us to a slowdown, or recession, or whatever, you’re just not going to help the supply problem on the willing workers. All right.

Paul Van Metre:
Sorry, I just want to make a sense of this. So this is in the future, so 2020 to 2030. So they’re predicting just slower population growth. Is this because of COVID deaths or this is-

Nick Meyers:
No. No, no, it’s primarily because of the aging population, and we’re having fewer babies, and we still have a pretty broken immigration… I mean, legal immigration path. So because the baby boomers are retiring and the greatest generation is dying off and so on, and we’re not replacing ourselves, and the millennials and the Gen Xers are having fewer babies. So it’s dropping.

Paul Van Metre:
And I’ve read that almost all first world countries are having the same exact problem with not enough new babies, right?

Nick Meyers:
That’s correct. Right. So we could get into real serious depth here if we start talking about the JOLTS report, but I get a lot of people calling or emailing me going, “Man, last month they said that 3 million people quit their jobs, and then they turned around this month and said, ‘We had a surprise January of 333,000 new jobs,’ what gives?” That’s because the great resignation is a misnomer, it’s the great rotation, where people were quitting their jobs to take other jobs. So what they should have said, instead of saying, “Oh, 3 million people quit their job last month,” they should have said, “3 million people quit their job and 3.3 million people took new jobs.” That’s a more accurate way of saying, because it was a big rotation. But it’s interesting, of the 9 million jobs that are open out there, 78% of them are small business, small to medium-sized business.
So less than 250 employees, that’s who’s out there hiring and driving this economy, which is fairly typical. So you can look at the job openings, all were on the right. Those job openings have peaked here, but they peaked in 2022. But if you look there, at 9 million, we were averaging… when we first got into this, it was about 5 to 6 million open jobs every month that they’re still open. And now, that spike is still almost double where we were before. So this is the demand side, has not cooled off.

Paul Van Metre:
Yeah. So this is back 10 years or so. Yeah, that’s a much bigger number. That’s amazing. And for probably most of the folks on this webinar, this full half from 1 to 49 employees, most machine shops, most fab companies out there, they’re generating half the job openings, the whole-

Nick Meyers:
That’s correct.

Paul Van Metre:
… whole economy. Wow.

Nick Meyers:
We just talked about this, but the separation… So if you have 3.4 million people quit their jobs in December, and then we had net 330,000 new jobs, yeah, because 3.7 million people took new jobs, that’s the rotation. And that’s where it gets a little bit confusing when you’re hearing those from the news. But 80% of those, again, are small to medium-sized business. So you guys have the greatest job openings and you have the greatest turnovers because this is the nature of this small business. So let’s move.
Again, in nature of time, this is saying basically the same thing. So if you look at where those jobs are coming from, the largest employers, with 31,000, but the rest of it is all from people under 250… or under 500. So SMB, small to medium-sized businesses, is defined as less than 500 employees. Well, everybody hears about Walmart, and Amazon, and Netflix, or whatever the big… it’s Main Street, not Wall Street, that’s the driving force of our economy. 99% of all businesses in America are small businesses, and they were responsible for 62.5% of the net new job growth coming out of the last recession, which is why it’s so important to our economy. Now, Wall Street is different than our actual underlying economy, but we can skip forward. So to sum some of this up, we are in these unprecedented times after this shift from the pandemic, and the economic and political response has left us with a labor participation problem with a strong business economy, which has shifted the power dynamic.
We’re now in a market where the candidate is king. For decades, you might’ve been able to be picky and choosy and say, “Do it or you’re fired. Because if you don’t like it, I got 10 more people waiting outside to take your job.” That’s not the case now, and they know it. And so they’re looking for instant gratification, they look for a job the way they look for a cheeseburger. Now, we’ve taught them… the traffic time on the old boards like Indeed, and Zip, and all these guys, traffic time there is way down. What they do is they go to their cell phone and they say, “X, Y, Z job near me.” And now it’s pointing them to wherever those jobs happen to be posted.
But then they want to apply from that mobile phone in 60 seconds with or without a resume, they’re not spending their days surfing. And we have a smaller and older labor pool, and as we talked about, we’ve got a massive labor participation problem. And what do they want? So all these surveys of candidates out there. Of course, they want greater pay, because of inflationary pressures and so on, but after that, they want a job that is meaningful, something that shows them upside, something that they don’t hate, they want flexible work-life balance, upward mobility. One of the things that comes up a lot is child care, which by the way, coming back to, unfair to put all of this on the Fed, if Congress would do something about low cost or no cost child care, we could open a whole lot more people up to participate in the labor pool. But I don’t want to get into politics.
Anyway, so we have some serious wage pressure, as I’m sure you have all experienced, 14% higher over the last year and a half, before the typical skilled blue collar, and the reality of work from home. And so what do you need to do now? Skip forward. Well, I’m not going to spend much time on this because manufacturers don’t have a whole lot of opportunity to do work from home or hybrid solutions. That said, you should know that that’s a lot of people out there that are looking for that kind of thing. So some of your roles, whether it’s accountants, or the accounting department, or the sales, or your quotes, or whatever, anything that can be done remotely, you need to offer a hybrid remote type of a situation, and you’ll cast a much wider net for the available job seekers.
The other thing, you can… well, we’ll talk about that on the last slide, about options you can do. Just because you can’t operate a CNC machine from home, we can’t do your welding, and that’s from home, you can’t cut hair from home, but you can allow people some level of flexibility. We can talk about that too. Next slide.
Oh, yeah, I like this. The analogy is that if you grew up on grandma’s pond and you could drop a can pole with a piece of bread on the end of the stick, and the panfish, they would come jumping on your bait, they would come after… that’s not the case today. There are fewer fish in the pond and they’re not as ravenous. Doesn’t mean there’s not fish in the pond, just means you need to be a better fisherman. And so that means-

Paul Van Metre:
That’s a great analogy.

Nick Meyers:
What do we have to do today? And if you were going to take a screenshot, this was to be the one to say, “What do you need to do today?” First of all, keep that mindset that you’re not in the driver’s seat anymore. These candidates have a ton of options, and they know it, they’re actively looking. Review your roles. And not to be too harsh on this, but the job can’t suck. If a job sucks, you’re going to… Don’t waste a lot of money advertising it because there’s a lot of… or what can you do to make that job suck less? And you’ll probably pay more. Everything costs more, I get that, but consider your cost of vacancy. I see machine shops, we had one in northeast, in Erie, Pennsylvania that we ended up filling their entire second shift that they didn’t realize. I’m like, “You have this much business opportunity. You have a 350,000 CNC machine sitting there vacant because you can’t fill it. How much is that costing you not to fill that role?” Advertising pays, it doesn’t cost, and that comes to finding people as well.
So expand your reach. Certainly, use current technology, that’s a shameless plug, but you need to shorten the apply flow and make it candidate friendly so you can increase your apply process by 350%. Get the ATS out of the way, by the way. If you’re using a compliance tool, an old school compliance tool, they have a 67% fallout from when candidates start and apply before they finish. They’re falling out because the ATS is trying to do its job of compliance. So it wants to make you answer all the same questions that was already on your resume, replug this in, replug that in, and people aren’t willing to go through some 20-minute online apply process. So you can-

Paul Van Metre:
ATS is applicant tracking system. That’s like an automated software that makes you answer lots of questions and upload things. Yeah.

Nick Meyers:
Yeah. So the ATS, they’re 700 different… some of them call themselves hiring platforms, some will say it’s an applicant tracking software, some will say HCM, human capital management, but they’re all built for mid-level and higher enterprise companies that have complex onboarding, multiple levels of requisition approval. They’re subject to EEOC and Title IX, and all this other stuff. And they’re built for HR managers to stay out of hot water and have consistent process… manage that process. But they’re not candidate generation tools. And so now, if you have to have an ATS because you do a lot of government contracts, or because you’re over 500 employees, or that type of thing, that’s okay, we operate out in front of that. Just don’t let that interfere with your generating of the candidates. Just like I say, the same thing is like, “Well, you don’t start the process by kicking off the drug screen, or the background check or whatever, that comes later, in that, once you’ve already established a mutual interest between you and this candidate, then do what you need to do.
You’ve got to review your compensation. And probably, the biggest thing I see my manufacturing machine shops running into now, is they say, “Okay, if I have to pay this much to get a CNC machinist, what do I do with all of my people who have been here for years that are making less?” You’re going to have to at some point right size, otherwise, they’re going to be falling out the back door faster than you can bring them in the front door. Or you could cross your fingers and hope that this economy changes, or that they’re able to drive some serious recession and you’ll be back in the driver’s seat. But as we just went through, it doesn’t look like that’s on the cards. That’s a great comment from Anthony, by the way. Yeah, there’s a lot of machine shops that you can get your employees to be vested in your success with profit sharing, not necessarily ownership, but you can have profit sharing bonuses and that type of stuff. So they’re vested in doing that.
But you’ll need to review compensation or make sure you’re paying wages. I can tell you, one of the reasons we stood up higher desk done-for-you services is I’ve circled back to a machine shop in Erie, I’m like, “Hey, how come we stopped using Werkberry?” “Well, I tried it, it didn’t work.” I’m like, “What do you mean it didn’t work? Let’s go take a look.” We opened up his ad and I said, “Well, we generated all these clicks.” People were seeing the ad, but they weren’t clicking on apply. So I’m like, “Let’s look at your job ad.” He wanted a second shift experience CNC machine operator for $11 and 50 cents an hour.

Paul Van Metre:
Oh, no, that’s crazy.

Nick Meyers:
Right. You could go down to Starbucks and make $17 an hour. So we got to take a look at that. When I say lower your expectations, I don’t mean from a quality standpoint, but far too long, most of us have wanted to hire ourselves, what are we comfortable with? And you end up hiring the same type of 30-year-old male that is accustomed to this type of thing. But if you look at younger or older people returning to work, there’s a fair… and give a fair chance to some of the legal immigration population.
If they don’t speak great English or whatever, that’s okay, they’re not customer-facing. You can teach them a machine shop, but if you are willing to open up that pool, you can fill these roles. And stop over screening. Again, you’re not in the driver’s seat. I see people hiring salespeople and the job requirements says, “Requires a college degree.” Why? There’s no degree in sales anyway. You’re going to get somebody who’s got a history major, or underwater basket weaving, or whatever. If they have sales experience, and those type of things, don’t over screen simply because you were trying to filter out all of the wave of applicants. You don’t have a big wave of applicants to fight through anymore. I’d say that we innovate, re-evaluate your hiring managers.
This is a common one. You’re entrusting that first impression to some old curmudgeonly foreman who was… And he’s not necessarily making it the most welcome environment, and he may very well be your problem. We talked about this, embrace work from home, more flexible hours. Yeah, you can’t run a machine from home, however, you might be able to let those people punch out at three o’clock to go deal with after school and family time with the kids, and come back and finish their shift off hours, or let them work 4/10s instead of five days a week. There’s things you might be able to do to accomplish some of this life work balance flexibility that people are seeking. And the last one I was going to say is walk the talk. So there’s a lot of people who when they describe their company culture, it doesn’t resemble their company culture when they really get into brass tacks.
And so that’s something that I can’t do from here, you’ll need to take an honest look in the mirror. So the next thing we’ll talk about, what do you got to do now? Certainly, use current cutting edge technology. So we advertise a job like any consumer product. We have over 950 publishers, and for what you would spend on one of the premium job boards to sponsor job, we give you all of them, plus search and social, whatever. There’s no reason to be paying that much money for one job board. Next slide. And by the way, all we’ve done is figured out how to democratize access to this programmatic recruitment. This is exactly how the big guys have been doing it for over a decade. This is an actual pop-up from my cell phone. The older I get, Paul, the more creature of habit I become. Every morning, I get my cup of coffee and my cell phone, and I’m looking at AP, Newswire, or Flipboard, or one of that, and it popped up on my cell phone, “Amazon now hiring in your area.”
I click on it and this is what it says, “No resume required. Apply now. We promise to get back to you within three business days.” And the entire process, from phone screen to offer, will take no more than three days. Nobody knows consumers like Amazon, consumers and candidates are the same thing. And that’s what you’re competing with out there. And that’s what we can do for you from a digital advertising perspective.

Paul Van Metre:
That’s really raising the bar, isn’t it?

Nick Meyers:
Which means your ad, of course, it’ll be on all the job boards, but it’ll also be on search, and social, and that type of thing, and look a little bit different. But that’s where people live on the internet. In fact, we’ve got 950… no, it’s like 972 or something right now, publishers that includes every job board and aggregator you can name. Yes, it’s got Zip, and Indeed, and LinkedIn, and the Ladders, and Execunet, and all that stuff. But when you’re talking about certified welders, or CNC machinists, CDL drivers, or whatever, those guys aren’t on the Ladder, they don’t have LinkedIn profiles, by and large, they’re not surfing the job boards. We find more of them on Fantasy football sites, and O’Reilly Auto Parts, and Craigslist, and Facebook because that’s where they live on the internet. So next.
So that’s us, that’s Werkberry. First of all, it’s a holistic three-part solution. You don’t need an ATS, just a simple agnostic hiring platform. It’s your one-stop shop where you never have to go to a Zip, or Indeed, or any of that, and you keep all your jobs, and careers, and your company profile all in one place. And with the touch of one button, you turn on right ad, which is the second leg of the stool, the most cost-effective way to advertise a job, bar none, casting a much, much wider net. And then we offer done-for-you hiring services, because most of these skilled labor places, machine shops, and manufacturers, and construction guys, they’re not professional recruiters, they don’t know how to write a killer job ad, or even use the correct title, or make sure their compensation and how’s it stack up to the competition in that market, or have the ability to get back to candidates within hours not days, comfortable doing a phone screen, “We just send you the recording. Here’s the recommended candidates, and you make the decision.”

Paul Van Metre:
Wow. Yeah, I know that there’s a lot of steps to do it right and make that first impression. And yeah, like you said with the Amazons and everything else, the bar of how much complexity or effort people are willing to put in, it’s so much different than it once was.

Nick Meyers:
Absolutely.

Paul Van Metre:
Thank you, Nick, so much. That was both fascinating on the side of the economy, and all the employment metrics, and then what to possibly do about it. And ironically, I gave a talk at a local aerospace conference just a couple of weeks ago and talked about some of the very exact same things you’re talking about. And some of it was from a great book that I read called Winning the War for Talent. But just the fundamental shift in our population and it’s just not going to ever get better again, at least in the next decade or more. So people have to adapt to how they’re hiring. They have to make their companies much more appealing looking, and like you said, you got to walk the talk. You can’t just say you’re a great culture place, you actually have to be that.

Nick Meyers:
Which is harder than it sounds.

Paul Van Metre:
Yeah. And on my podcast, one of my most recent guests said they spend more effort and time selling to potential employees than they do selling to their customers. Because they’ve got plenty of demand right now, there’s plenty of work, that they got to always make sure they have a really strong funnel of people that are interested. And they’re going into high schools, and middle schools, and local job fairs, and they’re putting their logo on the shirts of the local baseball team, and in the local stadium, and making sure that their logo, their name is at the top of mind for people from the time they’re 12, to the time they’re 18 or 20, or deciding what to do in their career.
So yeah, I just want to reinforce that message to people. You always got to be selling to prospective employees. And of course, you talked about lowering the bar of expectations, and I just want to share a couple of things that could be useful to that. And I’ll share this one experience, a story that happened to me. So I was at this shop near Portland, this is actually a picture of their company, and I was talking to this really young guy, must’ve been 20, 22, I don’t know what he was. And he was on night shift, and he was setting up a 5-axis mill. And I asked him how long he’d been there? And he said, “Oh, I started about six months ago.” And so I asked him, I figured he’s been a machinist for a few years, what shop did he come from?
And he said, “Oh, I came from KFC.” And I said, “I don’t know KFC. Which shop is that?” And he said, “No, I mean, Kentucky Fried Chicken.” And I said, “What?” I said, “Is this your first machining job?” And he’s like, “Yeah, for sure.” And I’m like, “How is it that you’re on night shift setting up a 5-axis mill when you’ve only been in the industry six months?” He turned around and he showed me a screen, and he is like, “The guy’s on day shift and the programmers have given me full visual instructions on how to set this machine up. And I’m pretty mechanically competent, so I just follow their instructions.” And I was like, “Holy cow.” Talk about lowering the bar of what someone needs to come in with potentially years of experience to open up the door to someone that’s mechanically inclined, and has an interest, and is a good cultural fit but needs support on the skills. So anyway, I just thought that was fascinating.

Nick Meyers:
That’s fantastic. And actually, it makes a lot of sense if I think about… because this younger generation, even my kids… I asked my son, “How come you don’t call me…” Like I would call my dad to learn how to put in a new sink or a new toilet. He said, “That’s what YouTube’s for.” I’m like, “Oh, that’s a good point.” They all learn off of these type of video things. That’s great that ProShop can enable that.

Paul Van Metre:
Yeah. And then another client, focused on machining, great client in Colorado, they were able to start a night shift because they got all their day shift folks to document their setups, and their notes, and put it all into the system, which enabled them to have a successful handoff to a night shift, and have people know what to do and keep the machines running. But they incentivize them with some cash bonuses, and making it a fun little challenge to, “Whoever can document the jobs the best, I’m going to give them 400 bucks,” or something like that. So that was a really great win, and hopefully, gives people some ideas. We’ll share a couple of things in the chat. I know Abra has already shared the talk I gave at PNAA about employment, so check that out. And then this is a video we actually made a few years ago how clients of ours are using their usage of ProShop to appeal to and attract employees.
And the gentleman here, this guy who was in this video, he said, “I came to work at this shop because of ProShop.” He had the option to go to a more traditional shop that was all paper-based, old tech, not really cutting edge, versus he could see what this company was doing with all the technology, including ProShop, and paperless, and more dynamic. And like you said, they have a choice. There’s so many more openings than there are workers, so you got to make your company really appealing. Oh, I don’t think we’re actually going to watch that one, I think because of our time commitment here. And then of course, we have a number of tools and modules to actually help the onboarding process, making sure that you can document the training that people need, what roles they are having in the company, and you can even let them see advancement.
If I wanted to become a lead machinist, or a day shift lead, or a programmer, what do I need to learn in order to take those roles? And of course, we also think that by just systematizing and improving their business processes, we know that frees up clerical staff to do more value-added things. One of our shops, about 20 person shop, he knew that we famously say, “We’re going to help free up your overhead staff.” And he’s like, “There’s no way in the world you’re going to help me free up anybody. I got 15 machinists, and five in my office, and I need those five at a bare, bare minimum.” And sure enough, within a year, those five people, he only needed four of them, and one of them moved into a more production-focused, value-added role. So it definitely is very possible to free up staff.
So Nick, great stuff. So in conclusion here, got to get creative with your technology and your recruiting, make sure you are appealing. And in that talk I gave at the conference, I talk about writing job ads that are actually going to catch the interest of somebody. When people are surfing those boards or clicking through, there’s so many options, and if it’s just generic bland speak, they’re not going to be interested in clicking on that ad and finding more. But if you can really speak to them with compelling… Like, “If you like tinkering on motorcycles, you’re going to love working here,” that type of thing. And then I know we’ve all heard about, and probably people have experienced, you hire someone, and then in a week or two, they leave, because your onboarding and your culture were not what you promised, and they have options, so they’re going to leave.
And then of course, once you get them in the door, you got to work on efficiency, and focusing on making sure the whole company is working as efficiently as possible. So that is doing more with less and making the best out of what you got in this very, very tight market. So we’ve answered pretty much all the questions as they’ve come up. I guess, Nick, how do I sign up for your service? So I guess maybe the next slide here would be the thing to go next to.

Nick Meyers:
Yeah, absolutely. Reach out to me at [email protected], and mention that to you we’re at the ProShop contact, and they’ll forward that to me, and I will get you some information. And so basically, look forward to it, the basic value proposition is that we generate more quality candidates easier, faster, and cheaper than is otherwise available. But there’s no magic pill or silver bullet, so there’s a lot more to it… We’re going to generate more candidates easier, faster, and cheaper, but the rest of it… I can’t fix a machine shop that’s got a culture problem, or it has an onboarding problem, or whatever.

Paul Van Metre:
Absolutely. Great. Well, thank you so much, Nick. I hope you all found that valuable. You probably wouldn’t be here if labor wasn’t one of the challenges you’re facing today. So hopefully, you got some takeaways that will help you do a better job. And appreciate you all coming today, and we’ll see you on the next webinar. Thanks again.

Nick Meyers:
Thank you.

Paul Van Metre:
Appreciate it.

Nick Meyers:
That was wonderful. All right, great, guys.

Paul Van Metre:
All right. Cheers.

Nick Meyers:
Thanks. Bye-bye.