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The Human Factor

By David Smith
President, The Employers’ Association
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How close are we to "bringing to fruition" the predictions made by this contributor last December? Are we putting off until the end of the year what we probably should have done yesterday or are we ahead of schedule? Below are several predictions made by this contributor - and an analysis of current status:

Unemployment will remain high during 2010. New life science jobs will remain open until unemployed workers accept they are not going to return to their previous lifestyle without making an intellectual investment into their own future. We must be open to new realities - both in our words and actions - to reach success.

Michigan has finally passed the mantle of having the nation's highest unemployment rate to Nevada. The fact that our problems are still being blamed on an administration that has been absent for nearly eight years is troubling. In business, management takes corrective action when an individual makes a mistake or fails to meet an established goal. It seems that our elected officials (regardless of their political affiliation) spend more time establishing blame than they do resolving problems. I question the example our children see when elected officials continue to say, "It's not my fault!" rather than "I'll fix it." An elected official's responsibilities are a result of his or her individual actions - responsibility that mandates the acceptance of accountability rather than its deferral.  Four years after "the promise" made by our governor, I have yet to be "wowed." Surprisingly, I have yet to see the transparency and bi-partisan governance promised by our federal leadership.

Smaller organizations may grow and thrive, but they do not create the huge numbers of jobs that the industry once provided. In addition to jobs in nursing, eldercare, medical assistance, etc., information technologists continue to be in high demand. Business is gaining efficiency through technology and needs skilled individuals to make the transition. We will not so much have a lack of jobs as we do a lack of qualified candidates.

Small companies are expanding and production is returning to plants that are operating with fewer people making more things. Since efficiency is up, expanded opportunities will not likely return our workforce to previous levels. New companies are entering our region, but employees able to do available work are coming with the company from outside of our current workforce. We need to make systemic changes within our infrastructure in order to grow new jobs in Michigan - and must continue to make those changes from the top down if we are to thrive.

Efficiency within our industrial and service base is admirable. If we are to grow our state's economy, efficiency and teamwork must become a part of our governmental processes, too.

The days of high pay without commensurate knowledge are gone. The days of providing "across the board" pay adjustments to all employees is quickly slipping away as it does not adequately address the variance of pay we see for different positions within the region. Many employees will see pay frozen at 2009 levels during the year. Organizations providing increases to key employee groups will probably adjust pay rates by an average of 1.5-2 percent, but West Michigan employers typically provide pay increases to employees doing critical work exceptionally well rather than across the board to all employees.

While many companies have frozen or reduced pay during the past several years, the lowest paid employees have been reduced from the workforce so higher-paid workers (on average) are present, pushing up the pay rates needed to be competitive. As the economy improves, most companies expect higher turnover as workers seek "greener pastures" elsewhere - some saying they expect at least one quarter to one half of their workforce to actively seek other employment.

Automotive suppliers seem to be stronger than in the recent past but the furniture industry has yet to fully recover. The service sector is growing, yet many non-profits depending on state funding are justifiably concerned. Our economy is improving, but balances precariously on edge with any shift or delay from current growth trends poised to deal a staggering blow to our recovery. While pay cuts are being restored (in most cases), a handful of employers view the current pay rates as being the "new normal" and, due to this short-sighted perspective, will probably experience high turnover within the near future.

Doing business as we have always done it and expecting different results is insanity. We must strive to identify needs not currently met then use our creativity to develop solutions not yet tried if we are to continue moving forward as a region.

We predict a slow rebound in the economy, measured and deliberate hiring activity, an increase in life science and technical jobs, the maintenance of current levels of manufacturing employment, and low to moderate pay adjustments for the year. The light at the end of the tunnel is hope.

Perhaps it is time we all returned to our roots - a free-market based economy in which demand (rather than mandate) establishes supply. Long-term success always has come to ethical people who produce excellent products and/or provide exceptional services at a competitive price. Though our region's economic engine has not yet returned to "full steam ahead," it is rumbling to life.

Within each of us is a Human Factor that makes us unique. We should strive to maximize our own abilities rather than minimizing others as we seek accomplishment. We should continually reach for the stars rather than accepting what is handed to us by others. We should make our dreams become reality rather than living within the comfort of our memories as we move forward - for in doing so we acknowledge the light at the end of the tunnel to be hope.

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