In a family-owned business, everyone is expected to chip in — especially during a labor shortage. That's why Matt Young, CPA, CGMA, has been cleaning motorcoaches lately.
Young is the CFO of Capitol Tours, a charter and motorcoach tour company in South Carolina. But for the last few months, he's joined his father and mother — the owners of the organization — along with the rest of the staff to freshen up the company's buses between jobs.
"Who's been doing it? 'Johnny All-Staff,'" Young joked, referring to the all-hands-on-deck mentality that has gotten Capitol Tours through the pandemic and the labor crunch. "We clean them, and I work on them and maintain them."
Despite its best efforts, the company has been unable to hire any new staff since the pandemic began, leaving it short of cleaners and drivers, even as business starts to recover. Capitol Tours currently has 19 employees.
"I would hire another driver and another cleaner tomorrow if I had qualified candidates, willing to work," Young said.
It's a problem facing companies nationwide as employers try to fill roughly 10 million vacant positions, according to recent estimates — and job candidates are empowered to take their pick.
The AICPA's third-quarter economic outlook survey found that the availability of skilled personnel was the top overall challenge named by organizations for the second quarter in a row. About 40% of respondents said they were planning to hire more staff, compared with just 13% a year earlier. And a separate survey by ManpowerGroup found that companies' hiring hopes were at a 15-year high across sectors. But the rate of hiring has fallen short of expectations, and there's intense competition among hiring companies.
That's led employers to offer higher wages and new benefits, like flexible work schedules, and also to get more creative in their hiring strategies.
"Our employees in Wisconsin have done it all," said Tom Larchey, CPA, CGMA, the CFO of Big Lift, a distributor of electric forklifts and other equipment.
"They've gone to Home Depot looking for employees, local car dealers for the mechanical background — and oftentimes on their own time — to try and get qualified people," he added.
Big Lift's staffers have even quizzed delivery people at the facility to see if they have the skills to work for the company, which imports and manufactures equipment in Wisconsin. Meanwhile, the company has kept hourly wages above the regional average and maintained a worker-oriented culture, Larchey said.
"If you're not providing a reasonable, accommodative working environment, then you're just stuck," he added.
Despite the hiring push, Big Lift's hiring timelines have lengthened from just a few weeks to several months or longer for some jobs.
Nationwide, the manufacturing sector reported the greatest hiring difficulties, according to the ManpowerGroup survey. But white-collar jobs are seeing long vacancies and wage inflation, too.
In Irvine, Calif., the typical salary expectations of entry-level accountants have increased by $15,000, according to Thomas Oldham, vice president and controller at MBK Real Estate Companies.
"That's the labor market we're approaching; that's what the candidates are expecting," he said. The company's spending on wages is up 20% compared with pre-pandemic levels.
The AICPA survey found that labor costs had jumped to become the top inflationary concern. About 46% of respondents cited it as the most significant inflation risk factor, a jump from 30% in the previous quarter. The survey found that salary and benefit costs were expected to increase at a rate of 3.7%, the highest expected rate in at least four years.
Raising wages was the most common response to the labor shortage, as confirmed by 38% of survey respondents. Following that were flexible work arrangements (28%), signing bonuses (10%), larger performance bonuses (6%), and more time off (6%).
Increasingly, candidates seem to expect flexible work arrangements by default, Oldham added.
"In fact, it's almost a problem. Everyone's almost expecting that every position open is going to offer a remote option. And while that's appealing, it's just not practical to us," he said. The company has a limited remote-work arrangement, but it's lost out on candidates who want even more flexibility, such as Fridays off.
Still, the company has tried to offer other new benefits, particularly for the employees of the 38 senior living communities that it operates.
For example, MBK now offers free meals for employees at its communities' cafeterias, which often serve gourmet meals, Oldham said. The company also waived its wait period for health benefits and 401(k) contributions.
The company is trying to promote employees internally, and it's recruiting and relocating new staff from other regions. The overall strategy, he said, is to draw the best talent without overinflating spending on salaries.
"We're trying not to go with some of the flashier things. We're hesitant to go right into the wages," Oldham said, adding that a post-pandemic correction could wreck companies that overcommit on wages.
It's unclear when the labor market might ease for employers. In the meantime, companies are trying to adapt to difficult conditions. In a recent earnings report, Domino's Pizza said a driver shortage had caused a decline in sales, while FedEx said that labor costs had cut its forecast.
At Big Lift, the crunch has "definitely shifted our focus to treading water as opposed to long-term improvements for the facility," Larchey said. "We have a number of projects that will either improve efficiency or cleanliness, but those are on hold — because we are so busy and we can't hire enough to meet our needs."
In South Carolina, Capitol Tours has lost much of its usual business, including school trips. Instead, Young is trying to boost sales volume by bidding on one-off jobs. Those contracts often pay less. Even so, he is sacrificing some of the company's narrow margin in order to set minimum commissions and ensure that drivers get a decent cut.
His hope is to rebuild sales while retaining remaining staff through a difficult period.
"To the extent I can control cost and I keep my morale high for the employees I do have, it is a benefit," Young said. "We are celebrating 40 years in business this year. Hard work has always been a part of our business. Failure has never been an option, and operating through COVID has been no exception."
— Andrew Kenney is a freelance writer based in Colorado. To comment on this article or to suggest an idea for another article, contact Neil Amato, a JofA senior editor, at Neil.Amato@aicpa-cima.com.