Indiana Department of Workforce Development Commissioner Fred Payne.Ask almost any Indiana company what their biggest challenge is this year and it’s a safe bet you’ll get the same response from many. It’s labor shortages all the way these days, and competition for employees has been fierce. This has left employers with all kinds of questions about why this is happening and what efforts have been successful in reducing the impact.
To learn more from the forefront of the issue, Building Indiana Business got in touch with experts from the Indiana Department of Workforce Development (DWD). Commissioner Fred Payne provided insights on some of the biggest questions that employers have been asking.
Building Indiana (BIN): Almost every major industry in the state cites labor shortages as their top concern, even going back before the pandemic started. We’ve seen this with trucking, healthcare, construction, manufacturing, education, tech, retail, and others. In terms of our state specifically, where have all the workers gone? How and why has this become such a big issue?
Indiana DWD Commissioner Fred Payne: Many of the workers who transitioned from their jobs for one reason or another during the pandemic have yet to return to the workforce due to a host of factors. First and foremost, many in the Baby Boomer generation and others at or close to retirement age retired sooner than anticipated. This contributes to the decline in the state’s labor force participation rate.
Beyond that population, some two-salary families decided that they could get by on just one income, meaning a spouse left the workforce, some may have been displaced during the pandemic perhaps to take care of an aging parent or family member. Or a single parent with child-care issues left a job to care for a child or children. The good news is that those parents should eventually re-enter the workforce.
And finally, those who left their jobs to get more schooling or training should also re-enter the workforce with a more ideal work situation for him/herself.
This reduction in our labor force has presented challenges for employers that are finding it harder to hire for the job openings they have.
BIN: Can such a complex labor force situation like the one we’re currently in be resolved? And what steps can Indiana take?
Payne: Yes, the situation Indiana and most other states are currently facing can be resolved, but it’s going to take a combination of efforts and engagement with employers, not-for-profits, educational institutions, and communities of trust. Many workers aren’t simply quitting and leaving the workforce; they’re instead reassessing their situations with a goal of finding a job more fulfilling than the one they left.
DWD and the state’s current efforts include:
BIN: From what the DWD has observed, what are some of the smartest decisions Hoosier firms have made regarding employee retention strategies?
Payne: Generally speaking, employers are being more creative in the way they are addressing job flexibility, pay and the benefits they offer. And they’re getting more creative in how they recruit people to stay competitive in such a tight labor market, i.e., incentives, signing bonuses. Employers are engaging with their current employees to identify solutions together.
BIN: How has the national employment movement to create greater fairness, equity, and inclusion impacted companies and employees here in our state? What type of changes have been occurring?
Payne: There has been a movement for companies to have a more focused approach to equity and inclusion by hiring trained professionals, at a high level, who help develop strategies. Employers have responded by being more transparent about their equity efforts.
At the state government level, Indiana created the State Office of Equity, Inclusion and Opportunity, and hired its first cabinet level professional to oversee the state’s strategy for addressing equity and inclusion within state government.
