Street Talk

Street Talk: It’s the skills, stupid

Health disconnect.

June 21, 2019
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As the second half of the year begins, over 82% of employers report they are actively hiring for open positions. However, 80% of those employers are having trouble finding candidates, with 70% reporting a skills shortage, according to a survey released June 18 by Chicago-based global outplacement firm Challenger, Gray & Christmas.

The survey was conducted over three weeks in May and June among 150 human resources professionals at companies of various sizes and industries nationwide.

“The tight labor market typically means workers have their pick of jobs,” said Andrew Challenger, vice president of Challenger Gray. “This survey suggests that while opportunities abound, employers are looking for select skillsets and having trouble finding qualified talent.”

Of those surveyed, 43% of employers reported while they have plenty of applicants, those who apply do not have the requisite skills. Another 43% of employers reported they are not receiving enough applicants, 27% of whom said the candidates who do apply are not qualified.

“This presents a difficult situation for hiring managers who need to fill positions. It’s far more costly to hire someone who does not have the requisite skills and who will potentially only last a short time than to wait for the right person to come along,” Challenger said.

In separate studies from Glassdoor and the Society for Human Resource Management (SHRM), the cost of hiring in the U.S. is around $4,000, according to Glassdoor, or over $4,100, according to SHRM’s calculations, as well as nearly two months of lost time. The cost of turnover for that person could be up to six to nine months of the employee’s salary, according to SHRM.

“Onboarding someone who does not have the necessary skills to operate in the position sets that person up for failure. The untallied costs include the cost to productivity and the hit to morale, not only to the person who is not up to the task but also that person’s colleagues, who now may have to work harder,” Challenger said.

Challenger’s survey found 83% of companies are hiring mid-level professionals, including supervisors and managers. Another 74% are hiring entry-level workers, while 61% are hiring for director level up to the C-suite.

“This is good news for recent college graduates or those who are just starting out in their careers,” Challenger said. “It’s also a boon to workers who have experience but may feel stuck at their current companies.”

According to the Job Openings and Labor Turnover Survey (JOLTS), hiring edged up to 5.9 million in April, the most recent month for data, from 5.7 million in March. Meanwhile, the quit rate, which measures workers who voluntarily leave their positions, was 2.3% in April, up from 2.2% in the same month last year.

The majority of respondents are hiring HR professionals (50%), while 42% are hiring general laborers/assembly workers. Another 32% are hiring IT professionals, including network administrators, while 21% are hiring software developers. Another 32% are hiring marketers, public relations professionals, writers and content creators.

Sixty-seven percent reported they are hiring in operations, while 53% are hiring in their sales departments. Half of the respondents reported they are hiring in their HR departments, while 43% are hiring for their marketing departments.

The majority of companies (71%) use an internal hiring function and employee referrals to find talent. The next most-used mechanism to find talent is LinkedIn, with 65% of companies reporting they use this site to find candidates, followed by Indeed with 56%.

Market mover

Late last year, longstanding real estate firm Martin Commercial Properties announced it had ended its affiliation with Los Angeles-based CBRE, Inc., but a recent appointment in CBRE’s Detroit office hopes to strengthen CBRE’s presence in West Michigan.

Drew Miller joined CBRE Inc. in Michigan as senior vice president of the firm’s Detroit office.

According to CBRE, Miller’s role will help “strengthen and expand CBRE’s market share in Western Michigan, where he has worked for 15 years, providing advisory and transaction services to West Michigan-based companies on a local and global basis.”

Miller specializes in delivering real estate solutions to multimarket corporate, industrial and professional services clients. He is a West Michigan native and graduate of Hope College in Holland.

“Drew brings a wealth of experience to our operations and will certainly strengthen our presence in western Michigan,” said Paul Van Devender, managing director for CBRE in Detroit. “We are excited to have him on board and look forward to the excellent results that he will deliver for our clients.”

Miller’s results may be just what CBRE needs to reestablish itself in West Michigan. Martin Commercial Properties officially ended its affiliation with CBRE in January 2019. The Grand Rapids-based firm, founded by the late William Martin and now run by his son Van Martin, had been affiliated with CBRE for 20 years.

“The exciting thing for us is we now have the freedom to operate anywhere — any of the major markets that exist in Michigan or outside of Michigan,” Van Martin said. “Before we were kind of restricted. This kind of takes the shackles off.”

According to an earlier Business Journal report, the split was mutual between the two firms. Van Martin added, in several cases, CBRE tried to acquire its former affiliates while it began to shrink its affiliate program.

According to Martin Commercial Properties, CBRE had split with several other former affiliates, as well, including the Boulos Co. in Portland, Maine, which ended its 17-year affiliation around the same time as Martin Commercial.

On hold

A pilot by the Michigan Department of Health and Human Services to improve coordination between physical and behavioral health services is being postponed until Oct. 1, 2020.

The state said the delay is in order to complete design of the financial integration pilot model.

Three pilot sites were chosen for the Medicaid Health Plan Pilot initiative, meant to see if the changes can lead to expanding care with financial efficiency.

Muskegon County Community Mental Health (HealthWest) and West Michigan Community Mental Health were identified to conduct a joint pilot. The other two sites chosen were Genesee Health System and Saginaw County Community Mental Health Authority.

Progress has been made on the initiative, including developing a proposed care management workflow; identifying an approach to key public policy needs; and defining key data sharing requirements critical to whole-person care.

However, further work still is needed to reach agreements on risk-management and ownership of the specialty behavioral health provider network; utilization management, claims processing and other managed care responsibilities; and rates and payment structures.

Following resolution of these items, time will be needed to secure federal Centers for Medicare & Medicaid Services waiver approval, establish new contracts, finalize technology and reporting changes, establish new payment flows and potentially create new legal structures and undergo accreditation reviews.

To allow time for these implementation activities, outstanding elements and design of the integrated model is being targeted for Oct. 1, 2019.

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