As hiring problem grows, automakers, suppliers get creative

September was supposed to be the month when an absent North American workforce suddenly reemerged and reported for factory duty.

After a year and a half of pandemic infections, home confinement, interrupted auto production, idled factories and furloughed workers, Sept. 6 marked the end of federal unemployment assistance that was enacted to ease the impact of smaller paychecks, failing businesses and people's reluctance to go to work during the pandemic. The assumption was that the program's end would send workers back to the job.

But many in the industry remain skeptical.

"I don't see it happening," said Charlotte Hoffer Canning, chief culture officer for Hoffer Plastics Corp., a family-owned injection molder in suburban Chicago.

"As much as I would hope and wish that the expiration of the unemployment benefits is going to solve this, I don't think it's going to," she said.

Economic data reported over the past month indicates that job openings are rising significantly. Hirings also are up, but they are not coming close to filling the number of vacant positions around the industry — especially at a time when the market is red-hot and consumers are clamoring for new cars and trucks.

Canning is trying to recruit more than three dozen people to work at Hoffer, which normally has a workforce of about 350. She admits that it's tough.

The auto industry had a hiring challenge before the pandemic arrived, she points out, and it will still have one when the pandemic is over.

This is the buried crisis of the auto business: Companies have a dire need for more workers and a stubborn problem hiring them. The pandemic has masked and complicated that.

Jobs data from the U.S. Department of Labor has shown respectable growth in the number of motor vehicle employees being added over the summer. In August, automakers and parts manufacturers hired 24,100 workers. One month earlier, the sector brought back 10,500 workers. But even now, U.S. auto plants and suppliers have 73,400 fewer workers on the job than they did when the pandemic arrived in March 2020. The U.S. manufacturing sector overall still has 378,000 fewer workers than at the start of the pandemic.

In its Monthly Workforce Report for August, recruiting software platform company ICIMS reported that job openings were up 69 percent this year through July, but the number of applicants rose only 2 percent.

A month earlier, ICIMS reported that the manufacturing sector had seen the number of applicants per available job fall to 13 in the second quarter of this year, compared with 20 in the first quarter of 2020.

"This isn't unique to the auto industry," said Steve Wybo, a Detroit-area automotive consultant who works with numerous suppliers around the country. "The labor shortage is everywhere. Automotive. Restaurants. Hospitals. Last Saturday morning, I went out for a cup of coffee here in Michigan. I drove past three different Starbucks near my house here in the Detroit area, and they were all closed. At 8 o'clock in the morning. Not enough workers."

Wybo, senior managing director for Riveron's automotive practice, is also skeptical about worker recruiting getting any easier anytime soon.

"People have been talking for months about the end of the unemployment benefits being the moment when the workforce would all get off the couch and get back to work," Wybo said. "But half the states ended that program awhile ago, and nothing changed.

"No," he added. "This is bigger than the pandemic. It's going to take more than a lack of unemployment benefits to fill all the vacant auto jobs."

One thing the pandemic contributed that worsened the industry's situation was making some automotive workers question their careers, Canning said. Many people already might have been on the edge of making a change when COVID-19 began shutting down businesses and frightening people, she said, so they yielded to the moment.

"A record number of moms have left the workforce in the past year, and a record number are not coming back now," Canning said. "Look at all the difficult life issues they're facing. The whole remote-learning phenomenon for kids and the ongoing issues with schools. And day care centers — they're having their own trouble finding workers."

The pandemic also shook some older employees out of the workforce.

"We saw that here," Canning said. "People who were on the verge of considering retirement — maybe they were 62 and thinking about it. When the pandemic hit, they made the decision to say, 'Yep, I'm done. I'm out.' "

It also opened some workers' eyes to a different reality, Wybo said. It allowed factory employees — accustomed to strict hours and inflexible work environments — to stay home for months of unemployment that put new opportunities in their head.

"Automotive was already a hard industry to attract talent because of the conditions of factory work," he said. "So when you're getting free money and have time to sit at home and think about what you want to do with your life, there's what I call the Amazon effect: You realize you could go work in an Amazon warehouse or a Target warehouse making 14 bucks an hour. And it's air-conditioned, and the pace is a little more relaxed. You've had your nose to the grindstone for years, and along comes this world-changing event — it's caused a lot of workers to rethink things."

The question for many companies now is what to do to get workers back. And new ideas are popping.

Hiring bonuses have become common, with companies offering candidates $1,000 or more to take a job. Wybo said some of his clients have been paying as much as $5,000 in signing bonuses.

Cash bonuses to employees who recruit a friend or family member also are taking hold.

Mirror-maker Gentex Corp. in Zeeland, Mich., has begun offering equity in the company to recruit hourly employees, the first time it has ever done so, Chief Technology Officer Neil Boehm said. The offer is being well received, he said, "but we are still several hundred people behind where we need to be when the market comes back."

In a bid to encourage more Hispanic job seekers, Gentex also has hit on the idea of designating Spanish-speaking assembly lines in its plants. "Before, they wouldn't come and apply for a job because they didn't speak English," Boehm said. "We started on one line, and now it is on three shifts. It's been very successful for us."

Canning said Hoffer is promoting job openings on Facebook and Instagram. She also said that since people younger than 30 seem to live on their cellphones, the company's human resources department texts them instead of calling to recruit.

She also is promoting Hoffer as a career "brand" — advertising the business as a family-owned company, with family values and integrity, where no workers have been laid off during the pandemic and where they can develop skills and save for retirement.

"I'm also over marketing here, and we are marketing ourselves to candidates," Canning said. "This isn't your grandfather's old factory. It isn't a dark, dirty place to go work. We are innovative in what we do and need for young people to understand what we offer."

Hoffer has resorted to increasing its wages as well — twice so far this year — to $15 an hour.

Just how long the industry's labor shortage will last is difficult to forecast. The situation has been somewhat overshadowed this year by the global semiconductor shortage. Because of the supply chain problem, automakers have been curtailing production off and on, which has reduced the pressure on suppliers and support companies to crank up their operations while they look for workers.

But the pressure will resume sooner or later, predicted Laurie Harbour, president of supplier consultancy Harbour Results Inc. And when that moment comes, the industry will have to come up with still-better solutions to recruit workers.

Some smaller suppliers have used the semiconductor interruptions as opportunities to build up inventory, despite being understaffed, Harbour said. While customers are closed, some suppliers are steaming ahead to stockpile components — even if their lines have to run at slower speeds because workers are absent.

Wybo believes the current labor shortage will eventually be resolved but that hiring auto workers will remain a persistent, long-term challenge.

"It's here to stay," he said. "To deal with it, companies are going to have to get a lot more creative in the way they treat people and attract people. There's just a lot more competition out there now for other jobs."

Automotive News reporter Richard Truett contributed to this report.