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Gulf Coast employers struggle to fill jobs

By Nancy Hatch Woodward  11/29/2005

Drive through any major intersection in the New Orleans area and youll see a sea of Now Hiring signs. There are literally thousands of them all over the city. Ive never seen anything like this, said Kevin Kydd, regional HR director of HR for Strategic Restaurant Acquisition Corp. in St. Rose, La., the second-largest Burger King franchisee.

Even though Louisiana and Mississippi lost 251,000 and 60,000 jobs, respectively, immediately after Hurricane Katrina, competition is fierce for entry-level employees, said Julie Dicharry-Quistgaard, branch manager for the Baton Rouge office of Spherion Staffing, which provides staffing and recruiting services.

Its the food service workers, the receptionists, the data entry workers and the telemarketers who are the toughest to get right now, she noted. Whereas, on average, a receptionist usually made about $6 to $8 per hour, hourly wages have increased to $8 to $11. You just cant find people who will work for $6 per hour anymore, she said.

Burger Kings $6,000 hiring bonus has been the talk of the town, but the company has a few other tricks up its sleeve. You have to try to separate yourself from the rest of the pack in order to try to populate your business, Kydd explained. The bonus serves not only as an incentive to attract workers, but to help retain them. Hourly workers are paid $500 a month for a one-year period. That comes to almost $3 extra per hour. A $3,000 bonus is offered for part-time employees who work 20 to 34 hours a week. In addition, the company has increased its basic hourly pay to $6 to $7 for crew members.

Even then its hard to get workers. They come in for interviews and tell us they cant work for less than $12 an hour or that such-and-such company is offering more, and will we match it? Even when they accept a job with us, Kydd said, they may go home and find a message from another business that promises to pay them $1 per hour more than we are, and well never see them again.

Popeyes Chicken & Biscuits, a New Orleans-based restaurant and icon, realized that it was going to be competitive only if it got its units up and running quickly and raised its hourly rate across the board by $3, said Stan Stout, chief people services officer. In addition, the company informed its employees that the salary structure might be altered depending on market conditions.

Burger King and Popeyes are offering incentives to managers as well. Popeyes extended overtime pay to its management team. In addition, managers are being given a bonus based on a percentage of their weekly gross pay. Burger King is guaranteeing bonuses, in increments, to its managers and offering bonuses even during the training period. The first-quarter bonus is 100 percent guaranteed, the second quarter is guaranteed at 75 percent, and so on.

Laborers in short supply too

Contractors are also having a hard time finding able-bodied workers. Quistgaard said that her company had to raise its rates about $3 per hour for construction, warehouse and light industrial workers. We are competing with [the Federal Emergency Management Agency (FEMA)], she explained. FEMA is paying between $12 and $18 per hour.

Local contractors are feeling the pinch too. Were hiring in all of our crafts, said Don Bonewitz, safety and HR director for Durr Heavy Construction in Harahan, La. We are hiring [commercial] drivers, laborers, pipe layers, equipment operators and carpenters. Durr raised the hourly rate it is paying to entry-level employees, clean-up people and unskilled workers, offering $10 per hour instead of the usual $8. Bonewitz said he isnt having to raise the wages of most of his other workers, because they are working up to 80 hours a week and are making a lot of money in overtime hours.

Barry Kaufman, business manager of the Construction and General Laborers Local 689 in New Orleans, said hes glad to see these kind of wages. The workers in New Orleans have been underpaid for years, he stated. This has been a working poor city. Unfortunately, it took Katrina to expose it.

More than higher wages needed

Money isnt the only attraction. Durr has been providing limited housing for its people. The company has one house and numerous trailers, campers and tents on its premises for workers to live in. In addition, Durr has been providing meals for them.

Wardel Davis, a general contractor with Davis Construction in Biloxi, Miss., is paying his laborers $10 to $12 per hour and is providing tents for some. Even so, many workers dont last long. Those who are coming down seeking adventure usually only last about a week or so, Davis said. I have had several come in who were really talentedgood carpenters, good roofers and good mechanicsbut they were here today and gone tomorrow. They said they didnt know it got so cold down here, that it was too cold to sleep in a tent this winter, so they went back home.

Davis is bidding on a job worth $2 million to $4 million. When asked how he will find enough workers if he gets the job, he said he has contacted friends in Illinois, Ohio and California. They are ready to go. Well set up temporary housing for them on the six acres I have near Biloxi, and theyll bring their own RVs.

Transportation is another challenge, said Adrian Perkins, area manager for Popeyes in New Orleans. Many of its workers are living in other areas such as the West Bank or Baton Rouge, where they can find shelter and schools for their children, so the company provides van service. Burger King also provides transportation for its employees. In addition, the Department of Labor is providing transportation into the area from Baton Rouge. But sometimes that isnt enough, Quistgaard said.

We have held job fairs to try and get employees in the Metairie area, and we offer to provide transportation, but people arent interested in having to be transported back and forth unless its secure employment at a company they previously worked for.

I-9 form waivers

Professional Roofers Inc. is finding all the workers it needs, said Padre Parkman, general manager for the Gulfport, Miss., firm. But it is having to pay at least 20 percent more than usual. He said one of the reasons he may not have had as many problems finding workers is because he took advantage of the Department of Homeland Securitys I-9 waiver, which allowed employers a grace period, starting on Sept. 6, for providing documentation normally required by federal law to demonstrate that individual workers are entitled to work in the United States.

Davis Construction also took advantage of the waiver, but Quistgaard, who serves on the board for the Greater Baton Rouge chapter of the Society for Human Resource Management, said that illegal aliens arent really a problem in the area and that everyone seems to be getting as much I-9 information as they can. They dont want to have to go back and get that information afterwards, now that the waiver is over. Popeyes and Burger King said they followed the I-9 requirements all along.

However, Kaufman said some companies are bringing in Guatemalans and Mexicans to work when many people in New Orleans still do not have jobs. They can hire them cheaper and they dont have to treat them the way they treat Americans, he said. Americans know they get time and a half after 40 hours. These companies are working those poor people 100 hours and paying them next to nothing.

When will it end?

Obviously, no one knows for sure when things will get back to normal. Until the housing situation is corrected, the problem itself, no matter how much we pay in bonuses, will continue, noted Glen Helton, president and chief operating officer of Strategic Restaurant Acquisition Corp. There is just no population to expand the workforce to where it needs. I still need 115 managers right now.

Parkman said hes starting to see some of the high wages dipping back down. Bonewitz agreed, saying that the labor pool seems to be growing. Some companies say that they got back to normal without having to pay higher wages. Rick Robinson, PHR, executive director, field human resources, for Cingular, said his people havent had to modify their compensation structure and, quite frankly, we have an abundance of applicants. The company is finding qualified candidates in the region who have been displaced from their previous jobs.

Quistgaard said she believes that some relief may be coming soon for those still struggling to find workers. One of the main reasons that its hard to find workers, she said, is because the state government said that people who are unemployed because of the hurricane dont have to look actively for another job while collecting benefits. That waiver ended on Nov. 20, however.

Louisiana had almost 340,000 people receiving unemployment or disaster unemployment assistance. Some people have been sitting back, drawing their unemployment or getting their FEMA or Red Cross payments and wont look for work until they absolutely have to, Quistgaard said. Now that the waiver is ending, we will still probably have a hard time getting good qualified workers, but in terms of entry-level positions, I think youll see more people ready to get back to work.

Nancy Hatch Woodward is a freelance writer based in Chattanooga, Tenn., and a frequent contributor to HR Magazine.

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