Economic Development and Human Resources

Labor woes top survey concerns

Chamber survey shows availability of workforce and parking as top concerns, though 96 percent have positive perception of businesses climate.

January 19, 2018
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Results from the annual Grand Rapids Area Chamber of Commerce Government Affairs survey confirm talent and workforce development, as well as parking and mobility, remain the top concerns of the West Michigan business community.

Nearly 650 members contributed to this year’s survey, with two-thirds of respondents representing small- and mid-sized business.

For the second year in a row, “availability of skilled labor,” at 43 percent, and “general talent retention,” at 36 percent, are the top priorities for chamber members. Parking availability replaced federal government regulations in the top three, with 28 percent of respondents noting concern. Of the top five issues identified, parking availability is the only item unrelated to talent and workforce.

Despite concerns expressed in the survey, 96 percent of chamber members reported a “favorable” or “very favorable” perception of West Michigan’s business climate. This marks a 3 percent increase from 2017, with less than 2 percent of respondents holding “unfavorable” or “very unfavorable” perceptions.

Joshua Lunger, director of government affairs for the chamber, said the positive aspect regarding these top concerns is they have come into play as a result of major business growth in Grand Rapids.

“I’m glad these are the challenges we get to talk about and get to tackle because there’s a lot of positive news in this,” he said.

Lack of skilled labor

More than 85 percent of respondents hired or added new positions within the past 12 months as a result of business growth, an increase of 8 percent from 2017.

Nearly 80 percent of the same audience, however, stated difficulty in finding qualified applicants to fill these roles. This number has steadily increased from 51 percent in 2014 to 72 percent in 2017.

“Talent shortage is a major concern,” said one respondent.

To overcome hiring challenges, nearly half of businesses increased wages to attract qualified workers, almost double the amount from the 2016 survey.

Andy Johnston, the chamber’s vice president of government affairs, said the chamber is working to advance legislation to close the talent gap.

Some of this legislation includes flexibility to the Michigan Merit Curriculum that would allow students to pursue skilled trades, as well as legislation to help students exit high school with some documentation of their skills.

“We’re going to continue to support the collaboration between the business community and the education community so there’s an understanding of what jobs are out there and what skills are needed,” Johnston said.

Johnston said one of the most effective ways the chamber has been able to battle the “No. 1 issue” of lack of skilled labor is by providing employers resources from the Skilled Trades Training Fund that allows them to increase the skills of their employees.

“We were excited to see a budget increase last year,” he said. “We’re hoping to maintain or grow that budget this year.”

Johnston said it is important to consider reducing barriers to those integrating from the prison system so they can be more effective contributors, as well.

Parking availability concerns

As a barrier to business growth, parking availability has increased from a top-five to a top-three priority, with 28 percent of respondents highlighting it as a top concern.

Parking concerns also included mobility, availability of parking and employee commutes as primary concerns by roughly half of the respondents. Transit connections followed in third with 17 percent.

“Parking downtown continues to be a problem,” said one respondent. “We are located outside of the downtown area due to the parking limitations downtown.”

Lunger said the main issue surrounds the availability of parking permits, which are over 95 percent capacity.

“We have examples from members that they could essentially double the size of their company, but they’re concerned about this lack of monthly permit parking,” Johnston said.

The chamber completed a parking census of 2,000 people last fall to learn about parking habits downtown. Lunger said the chamber is going to engage members and stakeholders in evaluating that census and determine how to best enhance mobility and parking downtown.

“The end result that we’d love to see is that the employers downtown really have a wide set of options to choose from for how they address the mobility needs of their employees,” Lunger said.

Lunger said he thinks this will include taking advantage of the free DASH line, and he would encourage more parking developments like the McConnell Ionia lot with roughly 300 spaces that opened in December near the Downtown Market.

Ballot proposal concerns

The survey asked about four potential ballot proposals for 2018: paid sick leave, the legalization of marijuana, a minimum wage increase and redistricting.

The majority of respondents said the proposals, except for redistricting, would negatively impact their businesses, and they would oppose them.

Respondents felt most strongly about the proposal regarding possible paid sick leave, which would require all Michigan businesses with more than 10 employees to provide workers with 72 hours paid sick leave. There was 41 percent of respondents who indicated they believe the proposal would negatively impact their businesses, with almost 45 percent of those surveyed opposing the proposal.

The chamber has taken formal stances against the proposals regarding a minimum wage increase and paid sick leave.

“The more you increase barriers to labor force participation, like minimum wage, the more difficult it becomes to do business here,” Johnston said, adding he knows of companies in the district who have had to raise prices because of the wage increases.

The chamber has not yet taken a stance on the proposal regarding legalization of marijuana. Considering the prevalence of manufacturing jobs in the region that require drug tests, Johnston said the respondents’ answers likely stem from concerns about a reduction of the talent pool and decreased productivity.

He said the chamber will delve deeper into ballot concerns with members.

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