Big Bonuses, Debt Forgiveness, Free Land and Free College: What It Takes to Attract New Hires

Businesses and local governments are piling on the incentives to lure new talent

By Aliah D. Wright and Tony Lee
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​Having trouble filling an open position? Not only are you not alone, but talent shortages have become so widespread that companies and lawmakers are trying whatever they can think of in response. Consider these signs of the times: 

  • Railroad companies Union Pacific and BNSF are offering up to $25,000 sign-on bonuses to entice workers to train as crewmen and work as diesel mechanics and electricians in North Platte, Neb.; Kansas City, Mo.; and Denver.
  • In Baltimore, new residents can get $5,000 toward the purchase of a new home, while New Haven, Conn., is providing $80,000 in incentives for new homeowners ($10,000 interest free, $30,000 toward renovating a home and $40,000 for college tuition).
  • In Marne, Iowa, city officials are giving people land to build homes on, while new arrivals in Harmony, Minn., can receive up to $12,000 to build homes.
  • Some 77 counties in Kansas will help denizens pay off up to $15,000 in student loan debt and waive the state income tax for up to five years in what it calls "rural opportunity zones."
  • In Vermont, remote workers who put down roots in the state will be eligible for up to $10,000 in moving expenses and other costs. State officials hope the new incentive will entice out-of-state workers to swap their office for a Vermont co-working space or home office.
  • A severe truck driver shortage has prompted lawmakers on Capitol Hill to propose lowering the age limit for interstate commercial truck drivers to 18, in response to lobbying from trucking companies nationally.

Not to be outdone, consider Murphy Oil in El Dorado, Ark., population 18,000. The shortage of workers with technology skills is so acute that the petroleum and natural gas exploration company has extended what it calls the "El Dorado Promise" to lure much-needed workers.

"If your children go to the public schools, the company promises to pay for your kids to go to college," said Al McEwen, president of Management Recruiters of Arkansas, an affiliate of global search experts MRINetwork. Murphy Oil's $50 million scholarship program pays tuition and fees to any U.S. university, public or private, for all El Dorado High School graduates who have been enrolled in the El Dorado school district since at least the ninth grade.

"If it's important to you that your children go to college, then we can provide that here," said Murphy Oil Chairman Claiborne Deming. "The offshoot is that we bring people here to our community who think that education is important—and those are the type of people we want."

The talent shortage is especially acute in the Midwest, according to U.S. Census Bureau figures. Companies of all sizes in various industries from the Dakotas to Texas are offering big incentives to lure workers—especially to rural areas and small towns where populations dwindled during the Great Recession that ended about eight years ago. University of South Dakota economist Mike Allgrunn likened the financial incentives to "a modern-day Homestead Act"—the 1862 law that gave public land to settlers to lure them West.

"There are jobs here, fairly decent jobs," said Marne, Iowa, Mayor Randy Baxter in an interview with The Wall Street Journal. "We just need people to come in and fill the jobs." Iowa's unemployment rate of 2.8 percent is one of the lowest in the country. "Low unemployment rates: Everyone thinks of that as a good thing, and it is, but there's a downside," Allgrunn told the Journal. "Eventually you run out of people to do the work."

The Struggle to Find Talent

For the first time in 18 years, the U.S. unemployment rate has dropped to a low of 3.8 percent, and the number of available jobs has exceeded the number of unemployed U.S. workers, reports the Bureau of Labor Statistics (BLS). There were 6.7 million U.S. job openings at the end of April, more than the 6.3 million individuals who were counted as unemployed at the time. Unemployed people are classified as those who don't have jobs but have recently searched for one.

The largest number of job openings are in business services (1.2 million), which includes accountants, software developers and clerical workers. Health care jobs followed closely behind with over 1 million unfilled jobs. Jobs abound in some of the lowest-paying fields as well—there were 844,000 accommodation and food service jobs open in April and 735,000 unfilled retail positions.

Aggressive hiring in recent years has stoked the labor shortage. Construction industry employment has risen by 286,000 over the past year, while the transportation and trucking industries have added 156,000 jobs over the same period. Both industries need even more workers, so companies in those fields are leading the way in offering a wave of new incentives to entice workers.

Ironically, the lack of construction workers has helped create housing shortages in many regions where workers are needed most, including across the Midwest. Until new housing is built, employers can't attract workers who wouldn't have a place to live, no matter how much companies boost starting salaries and sign-on bonuses, say economists.  

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"While these steps appear to be luring more construction workers back to the job market, firms report they would hire even more workers if they could find enough qualified candidates," said Stephen E. Sandherr, chief executive officer of Associated General Contractors of America.

The picture is no better in trucking. Avery Vise, vice president of Trucking Research for FTR, a transportation intelligence and forecasting firm in Bloomington, Ind., estimates that as of the first quarter of 2018, the U.S. has about 290,000 fewer truck drivers than it needs—four times the shortage it recorded two years ago.

To broaden the talent pool of available drivers, the DRIVE-Safe Act (or Developing Responsible Individuals for a Vibrant Economy Act), introduced by Reps. Duncan Hunter, R-Calif., and Trey Hollingsworth, R-Ind., would scrap a federal rule that bans drivers under 21 from transporting goods outside the state where they're licensed, lowering the legal age to 18. The bill would require teenagers to log 400 hours of on-duty driving and 240 hours with an experienced driver in the passenger seat before being licensed to cross state lines.

Highway safety advocates oppose the bill, saying that teenagers need more time to learn to handle long-haul vehicles, especially in urban areas, and that higher insurance rates will offset the revenue generated from the additional drivers. But proponents are undeterred.

"This legislation," said John Kearney, CEO and president of Advanced Training Systems in St. Petersburg, Fla., "will help train drivers to a level far and above current licensing standards. It creates opportunity."

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