Our economy was shut-down for a year, then rebooted with massive, blunt, stimulus and build-better funds. It will take months for the supply-and-demand for both products and labor to rebalance. And it’s no secret the country is facing major labor shortages.

The “new jobs for April” forecast was a huge, over-forecasted miss by nearly every expert. All we know now is that there is a record number of companies short of hourly workers.

What “solutions” are being reported?

Employers large amounts of hourly workers — Amazon, Walmart, Target, Costco, etc. — are mostly just raising hourly pay by five to almost 20%.

Meanwhile, a seasonal, resort ice cream shop – with a great location – is hiring at $16/hour instead of $8 and assuming they can pass the wages on in higher prices. Your business model, niche and time-horizon should inform your labor solutions.

Some firms have added twists. For example, Chipotle needs 20K new workers by June. They are offering bounties to workers who bring in new-hire friends and selling a career path to become a $100K per year manager in four years. These moves hint at the “Good Jobs Strategy” that Costco, Trader Joe’s and Southwest Airlines have successfully invested in for years.

What is the Good Jobs strategy?

“Good Job Strategy” is Is the title of a recommended book by Zeynep Ton (buy it used for $2). The author crystallizes what LL Bean and FedEx discovered back in the late 1970’s. The main principals of this strategy are:

  1. Pay the most to screen and hire the best;
  2. Expect the most by investing in cross-training;
  3. Reduce costs for turnover, supervisors and errors;
  4. Rally everyone to achieve with pride: Service-excellence metrics tuned to best, target customers. Then, retain and win more best-customers to grow sales and profits faster;
  5. Achieve 150 to 200% margin dollars per head for 130 to 150% of the going comp rate for the job niche (vs. industry averages); and
  6. Repeat this virtuous cycle to hire more to service the growth.
  7. And, your high-engagement culture will attract new, best-work-ethic prospective employees!

Best short and long-term strategy for distributors

Most distributor locations are small with different tasks that need to be done. Not one task is learned in minutes. Learn-n-earn; cross-training yielding high-pay and higher total productivity is the way to go. This can solve both your near and longer-term labor objectives. For more details on how to do this, skim my “Core Renewal Roadmap” at merrifieldact2.com.