Summary
TRANSCRIPT

Using Labor and Economic Data to Win Business and Get Higher Bill Rates

Ron Hetrick: Ron Hetrick. Welcome today. I'm so honored to speak to you all. Hopefully we can learn some things. I'm going to be talking a little bit about economics, a little bit about data, what to show people. I'm going to be walking through a little bit of what it looks like to kind of pull data together and show it to clients.

Ron Hetrick: To basically this is about kind of winning business, getting higher bill rates. It's basically. What most of my career has been about. So first off, who am I? You know, who are you talking to right now? Ron Hettrick, I'm a senior labor economist and the director of staffing products here at Emsi Burning Glass.

Ron Hetrick: My background, I spent eight years with the bureau of labor statistics in Washington, DC. I was supervisor of the payroll survey. The one that comes out every month and tells you how many jobs we've added, or if it's recent months. Apparently not that many jobs that we're adding came out of the group that I was supervising.

Ron Hetrick: I then spent 20 years at the allegiance group working to kind of start most of the market analytics functions that were there in that company. They kind of evolved beyond me as the years went on, but kind of did that and then oversaw that as a product director for the data science team. At one point in my career, I spent a significant amount of time designing rate cards, consulting on rate cards, publishing basically approaches to how you do rate cards.

Ron Hetrick: I've been on every side of it. I've been on the client side. I've been on the staffing side. A lot of what's going to guide our conversations today is the least of the lessons I've learned basically throughout my career about what seems to matter to people. Last year a significant event happened.

Ron Hetrick: We published this article called the Demographic Drought of which I was the lead author. That article pretty much changed my life. Now I travel around the country and join news programs, constantly talking about the issues of why we don't seem to have many people around to employ right now. So before I go in and start to talk about, you know, the data itself, let's get an understanding for just what's happening right now.

Ron Hetrick: This is just a couple slides, but just to make sure I know that a lot of people out there are kind of in a bit of a frenetic energy that you know, what's happening. Why are we in this kind of acute pain? Now, this is not my normal demographic drought speech, but I am going to kind of break down the core things that seem to be hitting us right now.

Ron Hetrick: So, really one of the biggest drivers. Issues affecting staffing of all kinds is that our labor force participation rate went way down once COVID kicked in and then it got stuck. And this is not only here, it's happened in a couple other countries as well, but it's particularly acute here in the US so when you have this labor force participation rate that goes down.

Ron Hetrick: Basically, what it equates to is you have 5 million people that were missing from our labor force. And when you're missing 5 million people, what used to be a tremendous amount of job openings that we've considered record breaking 7 million prior to COVID kind of becoming a thing in March of 2020 we've blown that number completely out of the water.

Ron Hetrick: So that's the one thing you keep hearing over and over again, is these astounding numbers of job openings. But when you see it graphically, it really is kind of mind blowing to see. All of this demand for people that, as I said before, really don't exist right now. They're not in our labor force now, particularly an issue that's affecting staffing, especially if you're feeling jobs that are typically lower skilled is that we have an incredible mismatch of the kind of jobs that we're creating in this country versus the people that are available. So if I were to tell you of our 10.6 million job openings we have right now, 6.2 million of those jobs do not require a college degree of any kind, manufacturing, construction, retail restaurants, a lot of healthcare jobs, like literally like orderlies people who work in school districts, they don't require college degrees.

Ron Hetrick: But yet, we simply don't have many of those people around. We only have 2.1 million unemployed people. So we have to remember that being unemployed means that you are actively searching for a job. So we were not going to count the people that are out of the labor force, which we know is a big factor right now. But we do want to understand that the reason why you or your clients are feeling all of this pain is because basically as I always say, We have a service economy, but there's no one here to serve us in our service economy.

Ron Hetrick: So this is causing a tremendous amount of pain just six years ago, we had three times as many lower skilled candidates per job opening than we have now just six years ago. We are changing dramatically as a nation, thanks to the boomers retiring. So if this is the case, if we have all of these job openings and there's just not a whole lot of people out there, then it tells you that we're missing.

Ron Hetrick: We may be missing opportunities because the world is changing so much. So in particular. These particular graphs right here, the top is the number of job openings in manufacturing. I'm just pulling this one out as an example, but you look at this increase in manufacturing jobs, lumens. It's about a hundred percent increase in manufacturing, job openings.

Ron Hetrick: Since the beginning of the pandemic and manufacturing production workers, average hourly earnings have gone up dramatically. So if you are working on a rate card, that was like two years old and hadn't been updated. Then this is a completely different world. All you hear about right now, great resignation.

Ron Hetrick: People were quitting like crazy. When we look at these things and we break it down by different types of jobs, especially lower skilled jobs. And I'm going to show you this later on in the presentation. That's where we're seeing all of this incredible increase. So once you play someone if we truly have 6.5 million job openings and only 2.1 million people to fill them as it stands today, then it means that you may only have one chance to play someone.

Ron Hetrick: So if you don't get the best price possible, Excuse me. You may not be able to recover that money back. So this is all about that. It's my passion. It's what I've been passionate about. For years in this industry, I could see this coming where we were going to be missing workers. And so my focus switched to, then we needed to optimize the revenue.

Ron Hetrick: And profit made for each person that is placed. That's the way you have to basically do it. So let's talk about what it is that you need. I don't know what your background is for the people attending this. You could be in leadership, you could be in sales, you could be in market research. You could be in any of those things.

Ron Hetrick: And when you go to a client, you need to understand something. So what is it that clients want? When I was working in developing rate cards, a lot of times I would be on the client's side where the client would have rates that I thought were actually pretty awful. And I would tell them, look, you've got to change these things.

Ron Hetrick: And they would say, you know, I need some kind of proof. And so it's trying to change my focus too. People don't want you to tell them that something needs to be higher than you. I see it so that they can make an argument within their organization to get higher rates. So what they need to know is, Hey, what's happening right now in my market.

Ron Hetrick: Is this market capable of meeting the needs that I have now and into the future? Am I priced correctly? If you've been in staffing, then you know that everybody wants to say, well, well, what if I increased by a dollar? What if I increased by $5? Is that going to change everything for me? Am I now going to get to see candidates?

Ron Hetrick: Just because I did that? Or is this an issue that may be. Increases rates. Oh, you want it? And you're still not going to be able to increase that candidate flow. That's something they want to know. What do they need to change? Is there something in the wreck itself that needs to change in order to get the job filled?

Ron Hetrick: Are they asking for literally everything under the sun and they're never going to get that. So what do they need to kind of take out of there? What are my competitors doing? This was crazy popular, especially when I remember when I would have used to work with you. Everybody always wants to know, well, what are they doing well, what are they doing?

Ron Hetrick: I want to know what they're doing. So there's an aspect of that, that you want to be able to kind of tell them, well, this is how they're hiring right now. And then lastly, obviously if you're in a staffing company and you're one of the 30 companies that called them this week, they're going to want to know, well, how are you going to fill it because no one else is doing it.

Ron Hetrick: What is your plan? I'm not going to be addressing that last. That's kind of what you all do, but I'm just kind of saying these are the data points that people were kind of looking for. So if that is the case, then the data points that you have to bring to the conversation are, I need to tell you about this market.

Ron Hetrick: Number one, you gotta, I gotta let, just let you know what's happening here in this market. Then we want to switch to the occupation that they're trying to hire. And we want to know what's our kind of supply demand and price, like is something happening now with this particular occupation? That is this, that is very unique.

Ron Hetrick: It could be just that particular one. Thirdly, the sector that that occupation is in. So, Hey, this job requires this general skillset. Well, what about all of the jobs that require that general skill set? And you really can think about that versus what I was saying earlier with lower skilled jobs. A lot of those are very transferable, so whoever's going to pay them the most.

Ron Hetrick: They're going to take, you know, if it could be, Walmart's paying 15, $16 an hour. But if the manufacturing plan is paying 13, then that is no longer a competitive situation for that manufacturing plant, because I can make more money for less hours. So this is something we have to understand is what's happening around us, a secondary to this.

Ron Hetrick: We want to kind of get a feel for the commercial sector that they're in. So. In general is the industry that they're in or what's happening around it. What's going on with that? And then lastly, you do need to kind of give people a clear clue as to, well, what are the competitors doing? Are they hiring at this particular time?

Ron Hetrick: Is the reason why you are feeling this pain because your competitors are really trying to fill jobs, or is this something that maybe intrinsically wrong maybe with your, in your organization? So you want to be able to kind of give people. So, where do you come from? Where do you kind of go to, to get this kind of information?

Ron Hetrick: So, number one, and I'm going to actually show you a little bit of this, the bureau labor statistics, where I used to. There's tons of things on there, and you can literally get lost in that site all day long. And if you're not an economist, a lot of this stuff is going to be more dangerous for you than it's actually going to be helpful because you actually have to understand why they collect it?

Ron Hetrick: How does this data get presented? Can it even be used in a time series? How do you go about these types of things? And we're going to, I'm going to show you a particular page in this, but I've included a link here. Well, so you have the current population survey. That's the household survey that is where unemployment rates come from.

Ron Hetrick: They happen for state areas nationally, and it also happens for occupations and such. They also talk about other types of factors, but usually around the labor force, unemployment and employment. And then we have the current employment statistics, which is the payroll. So that tells you this industry, the finance industry is hired, has hired this number of.

Ron Hetrick: People like over the past year. So they're focusing on the payrolls of companies. The one series that everybody's talking about now jolts the job openings and labor turnover survey. That is another one that everybody's paying attention to, especially those job openings numbers that I just shared that have become a particular interest.

Ron Hetrick: And then lastly, the one that everybody got and goes to his occupational employment statistics, which just kind of tells you for an occupation, how much of that is in your market? How much is nationally, how much is in the state? She can kind of get a feel for the raw number of people that companies say are in that particular occupation.

Ron Hetrick: So when that's one place that you can get data, another one is job boards. There's a number of job boards out there that have metrics on them. You can get various things. Sometimes you pay for that. Sometimes they have things, other things available. Aggregator tools. I'm going to be sharing one that I designed here at Emsi burning glass today, just as a means to kind of walk you through, trying to bake is basically take all of this data and put it in one spot so that you don't have to go out to everything else to try to get it.

Ron Hetrick: And then lastly, all of this stuff needs to be combined with your reality. Your own data should include your internal data and the anecdotes. And then I have both this bolted at the bottom. There is very little value in anecdotal information in and of itself. But when you use anecdotes to breathe life into the data that you're showing a client it's invaluable.

Ron Hetrick: So once a client sees how bad something is or they see just how dire the situation is, that's when you start to say, Hey, look, I got. We have people that we're working with now that have really had to greatly increase their rates lately. And it's still been very difficult, but now they have a context of which to look at that.

Ron Hetrick: So presenting that kind of information without any kind of context, just doesn't help at all. So this is the core. This is the secret of everything. And sitting on the client's side and having done data analysis now, and having constantly waiting to go on the news and all kinds of other things, where people ask you questions and they want answers.

Ron Hetrick: This is the secret to data that makes people happy and it needs to have the forest. It needs to be clear, and has to be concise. It has to be contextual and it has to be comparative. Now, what do I mean by clear, concise, contextual and comparative. The data points have to inherently make sense. You have to be able to look at it and go, yep, I got it.

Ron Hetrick: I get it. Anybody should be able to get this. It shouldn't take a doctorate. Maybe it takes a tiny bit of, you know, maybe a five-year-old may not be able to understand it, but any reasonable thinking, adults should be able to look at something and go, yeah, I got it. I understand what you're trying to say.

Ron Hetrick: Concise is not burying people in data. It drives me crazy. That year, for years, we had this concept, we call it big data and I was like, is big data the enemy of getting anything done? Actually, the answer is small data. It's digging through all of your big data to find that. Incredibly important data point that is going to move the needle for the client.

Ron Hetrick: So it's not about bludgeoning people with data. That's probably the worst thing you're ever going to do. If you want to lose someone, throw a ton of data at them that they really are only trying to be like, look, just tell me what do I need to know that it's going to make this decision easier for me? And if they don't understand that.

Ron Hetrick: Then it's worthless. It literally has no value if it's something that they can't understand. And it's not exactly the thing they're trying to answer. Thirdly, it needs to be contextual. So it's a data point. Is it good or bad? Is this like, I can throw a number out and I'm going to do this on the next slide.

Ron Hetrick: I can give you a number, but I'm not. If I don't give it any context, then it's just a number. You know, New York City is a huge city. It has huge numbers of all kinds of things, but that doesn't mean it's a good city to hire certain skill sets. It's actually a terrible city to hire manufacturing skill sets, even though they look like they have a lot, they simply have too many kinds of companies.

Ron Hetrick: They're trying to hire something that they don't have a lot of now, financial skillset. Sure. They've got a lot of those types of things. So do you need to have that context and I'm actually cheating into the next one, which is comparative. You have to be able to see. This market of which I've now told you is doing this historically, it's getting better.

Ron Hetrick: It's getting worse by the way, when you compare that to other markets, it's the worst. This is the worst market you could possibly do this in, or Hey right now I know things don't look good. Right, right. Now, if people are trying to hire nurses, not every market can be the worst market to hire nurses.

Ron Hetrick: There are markets out there that compared to other markets are a good market to hire nurses. It doesn't mean it's going to be easy. It just means that it's easier to do it there, then it's going to be elsewise. So you need to make sure if you're giving something to somebody, it has to answer these four questions.

Ron Hetrick: Or once again, it's just, doesn't bring the kind of value that you want. So let's give you an example, 4.3%. This is Baltimore Maryland's current unemployment rate. The most recently published for November of 21. So this is a concise number. It's a number that can't get any more concise than that. It is not clear.

Ron Hetrick: It is not contextual and it's not comparative. So let's show you all the ways that this number of 4.3% is not helping and when, how we can help it. So first off. If you don't know anything about unemployment rates, 0.3% means nothing to you, but the general rule of thumb when you're doing labor economics is if you have an unemployment rate below 5%, it's probably pretty tight.

Ron Hetrick: It's going to be pretty tight to find people. It may not be easy to put a posting out, get the kind of people, the quality people you want in the time that you want. As that number goes down, as that percentage goes down, it gets a lot more brutal. And once you get below 300, It becomes almost a crisis. And there are some occupations that are around one person or even lower, especially in healthcare where you are literally dealing with.

Ron Hetrick: There's no one out there. It is going to be really awful trying to find people right now. So let's first give this 4.3% that context. This is a tight market, but it's not a brutal market. Second, this has trended sharply downward since June. So even in the past five, six months, It has seen a tremendous job in Baltimore. The unemployment rate in Baltimore was 6.4%, a very pretty easy market down to 4.3%.

Ron Hetrick: So not only is it about an unemployment rate, but it's how fast it's changing. Remember what I said about context? What does this 4.3% look like when we go back historically? Well, six months prior, it was 6.4%. So we know it's come down sharply. Now we can go down to the next line. Do you know that before COVID it was actually 3.4%.

Ron Hetrick: So it was way worse before COVID. So if you're in a situation in Baltimore right now, looking at your number and going, Hey, this thing's pretty bad. Know that it was way worse, and it's probably heading there again, but it's still as this point still shows us that there is some gap to improve. Now, another context that we can give is this competitor.

Ron Hetrick: Let's look at it versus the national rate. Our current national rate of unemployment is 3.9%. So Baltimore is not as tight as the country in total. And then we can look right around nearby cities. Phili Is at 5.9% way worse than Baltimore. DC is at 3.6 way tighter than Baltimore. So now we've taken this number of 4.3%.

Ron Hetrick: We've put it in the context of history. We've characterized it as a good or a bad number and we've compared it to the things around it so that now people have a better understanding of what's happening. So just as I put this in, at the bottom, this is specific for the staffing industry. In case you didn't know, very low unemployment rates are generally really bad if you're doing lower and skilled staffing.

Ron Hetrick: So if you're doing, you know, manufacturing office clerical with any things that are dealing with. Lower skill sets. It's very tough in the market to place people when the unemployment rate is very low, but when you go to the high-end, it's actually very good. The reason for that is that when you have an incredibly tight market and enables people at higher end skill sets to treat themselves more like free agents.

Ron Hetrick: So they're more willing to take on gig work, shorter term assignments. Things that pay a lot of money and you can get a premium for them because of the desperation to fill those types of jobs. Now, right now we're able to secure much better rates for lower skilled workers, but that doesn't help us to get a much, much higher rate if we don't have anyone to place in those jobs at that lower rate.

Ron Hetrick: So I'm going to walk you through two things here. The first thing I'm going to do is give me one second here. Switch out.

Ron Hetrick: I'm going to give you first the

Ron Hetrick: I put us in an infinite loop here? Hold on.

Ron Hetrick: Okay. Hopefully. We can see that. All right. So this is the BLS website. I'm looking at state bases. This is local area unemployment. So I've just navigated into BLS. I've gone into their metropolitan area, employment unemployment. I've given you a link to the deck. Once you're in this, all you have to do is basically navigate your way to this report, which is Metro. to1.htm, but just get over the BLS and work your way to this particular report.

Ron Hetrick: Now, once you're in this report, you have the unemployment rate for every single major metropolitan, even minor to mid-size metropolitan area in the country, right here and there in this last column. So I don't want everybody to have to learn how to be an economist, but it is so valuable to go into a table like this.

Ron Hetrick: And like, if you're, for example, Birmingham, Alabama, I don't know if anybody realizes Birmingham, Alabama currently has an unemployment rate of two and a half percent.That is insanely low last year at this time, they were at 3.2%. So this is something that is so educational. When you know what I was just telling you, you can start to go down and look at different markets and see some of these markets still have really high unemployment rates.

Ron Hetrick: Some have incredibly low, I think it was Nebraska. I think they're one of our leaders in the clubhouse. Here we are. So Nebraska has a 1.2% unemployment rate. I talked to somebody who works in a school system in Nebraska that is just trying to fill cafeteria workers right now. And it is impossible.

Ron Hetrick: They are begging parents because if not, they have no one to feed the students in their school. So this is what I mean by talking drastically differently. You know, you are literally sitting in an absolute crisis if you're in the state of Nebraska right now, versus even areas that have maybe 3 or 4% unemployment.

Ron Hetrick: So that's the first thing I want to tell you about is get familiar and get comfortable, not even just for your clients, but for yourself, because if you're dealing with low unemployment rates that are this low, you know, that finding people is a premium, I don't care what anybody says and any company, any of your competitors that walks into a client and says, we can do this.

Ron Hetrick: No problem. The owner should be for you to tell those clients, yeah. Ask them exactly how they're going to do this. They must have a magical pool of people buried underneath the earth, but this is something that you have to understand that once you have a feel for how brutal a market is, it makes you a lot more confident in your ability to present the data that's going to help you make your case to get higher bill rates.

Ron Hetrick: So. With this in mind, I'm going to show you, this is a tool that we built here at Emsi burning glass. I'm going to walk you through a couple occupations, just so you can see just how different things are. So in this first particular case, we're just going to use a, it's a job description for a full-stack developer.

Ron Hetrick: And we're going to put that person in Chicago. So here's our full stack developers job descriptions as an actual job description. We're going to do Java developers and we're going to choose Chicago and let's see what the situation looks like right now will help. If I take that back, there we go. All right. 

Ron Hetrick: All right. So if we were trying to fill Java developers in Chicago, you can see that overall, this market is brutal to try to do that right now, they have, this is where I was talking about earlier. When you look at the surface, there are 43,500 software developers in the city of Chicago. Once we take into account Chicago's unemployment rate, once we take into account the unemployment rate for the occupation, and we put all of that together with the number of postings that are out there that would be trying to hire this person over the course of a month.

Ron Hetrick: R 38 81 here is going to be over the course of a month. And you look at the amount of people per job opening, and you compare that to other markets. You find out that this is actually a really terrible supply. So, so much for our 43,000. When we look at the amount that could be available to take a job.

Ron Hetrick: And this also includes people who are turning over right now, we have a lot of quits. So it also includes those people. So this is pretty much any realistic person you have to try to put to work. Now we can actually go down and see the job description itself. So it's pulled out all of the different skill sets.

Ron Hetrick: And if you look at some of these things, this dark red means that these people are not saying anywhere on their online profiles that they have, this particular thing, or very few are doesn't mean that they don't. Very few are saying that. So the more of these red skill sets that you see in a job posting, the more impossible it's going to be for you to kind of smoke this out of the gate.

Ron Hetrick: Especially if the bill rate that the client is charging is just not that competitive. So that's another aspect that you want to do is to say, look, I want to work with you, but you're asking for so much and I can't fill this right now. We already have a tremendous amount of demand, which I'm going to get to in a second.

Ron Hetrick: And your bill rates here, that's just, you're asking for everything and it's going to be very difficult. So that's our first part. The second thing we want to understand is this price aspect. This is actually not uncommon in higher skilled jobs. We're seeing a lot of flat pay rates. So this advertised wage shows that you're seeing this gray line.

Ron Hetrick: Is saying, when we look at the median of all the postings out there and we take the max, so if they said I'm going to pay, you know, 40 to 60, then we take the 60 and we say, okay, if that's where the market tolerance is, let's see how that's moving along. Now, if you look at that, it's really not moving a whole lot.

Ron Hetrick: This great resignation we're seeing is a lot of people switching jobs, but a lot of companies have actually been holding their pay rates fairly constant. I can show you example after example of this. So this is our first thing is just understanding where we're at.

Ron Hetrick: And we do see lately it's been up. It is above what BLS typically has here. Now, another thing we would want to do is say, this is just for the companies themselves, but what happens if we include staffing companies and our 59 become 65. So what that tells us is the staffing companies who are trying to do these kinds of shorter burst term assignments are paying higher than the market in general.

Ron Hetrick: So this also is another indication of a bit of desperation of people trying to find people. Using whatever means they can also be very common at the high end for companies to pay staff, to have staffing companies pay more. Because once again, assignments tend to not be locked in. They're making a trade-off for pay versus certain kinds of benefits.

Ron Hetrick: So that's something we have here as well. It's just the ability to see, but Hey, there is, if I were to put a staffing posting out there, I am going to be probably getting a paying person a lot more. I want to make sure that I factor that into the bill rate, which is one of the reasons you have to be a little careful just looking at pay rates around that.

Ron Hetrick: So when we take this back off and we're going to go down and we're going to look at demand, This demand that Chicago, although we had this crazy spike in March of 21, if we look at this past year, it's been slowly working its way back up. When we compare Chicago to other markets, we do see a very high demand.

Ron Hetrick: There's a lot more than we had last year at this time, as far as unique postings go, not a lot of companies more, but just understand. Once again, that there is an upward trend and there's a lot of competition around this that it makes, it basically puts our demand and supply at a very strong level.

Ron Hetrick: And we would want to say to this client, If I place this person, they're a heavy risk to quit because our demand and supply are definitely out of whack. We don't have a lot of supply to satisfy this demand. I want to make sure I'm pricing for the long run. By the way, in the US, this particular job is in the top 10% hardest to fill.

Ron Hetrick: So yet another contextual point. Remember what I told you, you need to be able to tell people like this, Hey look, even in this market, if I told you it wasn't that hard, understand that Nationally everybody's trying to find this right now. So this is just an example of one of those. Now I'm going to switch gears completely, and I'm going to clear this out and I'm going to bring in another job in, so at this time we're going to do, if this is the perfect value of looking at a similar type of job and seeing just how different things are, because you don't want to get hyper-focused on just an occupation.

Ron Hetrick: You want to focus on the entire segment that goes around it. These are production workers. So our helpers production workers are the SOC classification for Dallas, Texas. And if we look at this and we go down to this demand, we're like, Hey, I'm not up against a whole lot here. This is actually not that bad, you know, but we're not talking about, you know, production workers as, Hey, I work in a production job.

Ron Hetrick: Therefore I only take production jobs. That's some really unique characteristic about me is I only work in a production. We know we have 103 postings that we can identify in the market for that, but let's include jobs that are similar. Oh, by the way. Not to mention our pay rates since even mid-year of last year have gone up several dollars and we were up almost 12% in a year's time.

Ron Hetrick: So yet again, if you're stuck on a rate card or if the client's not doing higher pay rates, understanding how these things are kind of shooting up is going to be very valuable. Now, one of the things we're going to do is we're going to show similar jobs and all of the sudden our 103. Postings that I was up again have become 3000 and that's much, much higher than it was the year prior.

Ron Hetrick: So when we look at that, it's like, you have to understand if I'm doing these jobs. I could work in restaurants. I can work in warehouses. I can do all kinds of other types of things that I have to make sure when I pay someone, I'm keeping them from those other opportunities. Because if the opportunity you're trying to fill is not that attractive.

Ron Hetrick: There are so many other things that could be attractive at this time. The point of this particular thing is to not get overly focused on just the occupation that you're doing, but try to look at the world through your candidate's eyes. If you want to maximize the bill rate that you get for a candidate, your job is to show the client the total demand for someone who's like that person, not just their specific skill set or their specific occupation.

Ron Hetrick: That is a critical aspect of where we are. Our data shows an Emsi burning glass. That job postings are dramatically changing. People are dropping things left and right, people that used to require college degrees are starting to drop college degrees. People are starting to drop as we're advising them.

Ron Hetrick: A lot of the skillset demands that they have. So therefore, if the clients are doing that, then your job is to paint a realistic picture of the person they're specifically trying to hire. And then the last thing I was going to show you as my kind of aside here, because I know we've got people on here. The industry is going to show you just what recruiters look like right now.

Ron Hetrick: I'm just going to pick a market here. We're going to Los Angeles. Los Angeles actually has a slightly higher unemployment rate than others, but let's just take a look at what this looks like right now. And I'm going to tell you that this graph looks like this everywhere. So the reason I'm going to show you this.

Ron Hetrick: Let me switch off to play with some similar jobs. So this is since last year on October 22, where we are in the present, you can see this absolutely insane increase. I can pick any market I want to, and you're going to see this kind of increase. Now, I'm going to show you if you're working in staffing and you've been losing people, I want to show you why you're losing people.

Ron Hetrick: This pay rate doesn't it has not changed. There is no wage inflation here. You cannot have this kind of demand and have companies digging in their heels and saying, I refuse to pay more unless you're incredibly comfortable with attrition. This is a classic case of turnover. If you want to see elevated quit rates, look for pay rates.

Ron Hetrick: That is stuck when demand is going crazy. And you will see people jumping ship all over the place to take those types of jobs. This is what I was circling back to earlier. We are seeing across a number of professional occupations that pay rates are actually holding fairly steady. But yet we know the quit rates in these occupations are incredibly high, which tells us that people are getting basically a pay increase by just switching jobs.

Ron Hetrick: So maybe another company just by standard has paid more. So they're going to go take that higher wage, but companies themselves have really tried to hold off, especially at the higher end and the white collar jobs in paying more money. But just as something that's just another thing is really valuable.

Ron Hetrick: If you're ever talking to a client, who's looking for something and you see a runaway demand. And yet you see pay rates that are stuck. That is a formula for them to win. Hey, if you go a little bit higher, when everybody else is trying to dig in their heels, we will probably be able to get somebody who's going to lock down into this job.

Ron Hetrick: Versus if you're just another one of those companies out there that toes, the same line. Hey, I did a benchmark. I did a pay rate benchmark. So this is our pay. This is what we're going to pay. That's a loser. You don't pay what you're benchmarking to now, you're paying for tomorrow, not yesterday. Every piece of information you collect is dated the second you get it.

Ron Hetrick: So as your pricing and staffing, one of the things you want to make sure of is I don't want to keep reworking this and re-recruiting this job. So the way I'm going to do it is I'm going to make sure that I negotiate for where things could go, not for where they are right now. And the one way you do that is you beat the market.

Ron Hetrick: In this particular case, government data is saying the median wage is 33. The max rates that people are doing, aren't even coming close to that. So we do see a lot of people, at least in LA hiring recruiters that are trying to do it on the cheap. So yet another thing that we want to do. So that is basically my presentation.

Ron Hetrick: I am not wanting to go for any eternity on speaking. I don't even like to hear myself speak that much. If there are any questions, please see them and put them out there. I'd love to, I love to hear.

Ron Hetrick: And Jacob, are you still there? 

Ron Hetrick: I don't know why I met here. I hope there is. Okay, cool. 

Jakob Feinböck: Yes. Yes. I'm here. 

Ron Hetrick: Did we have, I am sorry. I don't look at chats when I'm talking, because I'm sad and I would just completely fall off the train. So, I know if there's anything that's kind of coming in.

Jakob Feinböck: I didn't see a question for you yet.

Ron Hetrick: Yes, you can get a copy of the deck.

Ron Hetrick: I will make this available to everybody at the WSS. We'll make sure you can get it because I talk fast and there's no way you can kind of memorize everything that I'm saying. So, we will make sure to do that. 

Jakob Feinböck: Yeah, we can share the deck recording at the recording yes. As well. 

Ron Hetrick: Okay. Yeah. Any other questions? Anybody has anything you'd like to ask somebody then let me know.

Jakob Feinböck: I have a question. 

Ron Hetrick: Yes. 

Jakob Feinböck: You can see it. It's the hardest city to recruit professional roles. 

Ron Hetrick: Yeah. So there's actually, I can't give you a hardest city, but what I can tell you is because of what's happening with remote, we, I had somebody the other day I was presenting and somebody said, oh, so this kind of severe labor shortage, isn't that kind of what we see after war times.

Ron Hetrick: And I'm like, yeah, No, we've never had this kind of dynamic in our labor economy. So certainly remote has made professional a much more kind of crazy world to recruit them because you can only you can, once again, you do a pay rate survey or whatever, you kind of look, wow, this person's doing this person's doing that.

Ron Hetrick: You can go to a certain extent with that. But if someone, if you're dealing with a real ACE, like you've got a real diamond. Candidate that you're sitting on and you try to low ball them or even go to market with them. They are absolutely going to have opportunities that they're going to get. So all you're asking for at that particular point in time is just basically having them stolen by somebody else.

Ron Hetrick: So I would just say that that has really changed the professional part. Now I will also add this, and this is coming from talking to a number of people in these different markets that are kind of mid to mid lower in pay rate. Are getting crushed by companies that are in higher cost of living markets, hiring these people remotely, because if you were paying somebody $70 an hour and in your market at $70 an hour, but I'm talking to somebody in Cincinnati.

Ron Hetrick: And they were like, they thought $35 an hour was phenomenal, then that for the company saves them a lot of money. If they pay like 40, 45. And yet that person who was making 30, 35 is now making way more than they were before. So I would say, you know, we have to be really cautious of Marcus that we would have historically recommended.

Ron Hetrick: Those kinds of mid-sized markets are now kind of a feeding ground for some of these large corporations who are trying to gain candidates more on the cheap otherwise. I will tell you if you look at the unemployment rates and somebody put that table. Thank you. That's awesome. If you go to that and you start to look at how much these unemployment rates are changing, remember what I told you?

Ron Hetrick: It's the degree to which something changes just as much as the rate. So even if my unemployment rate is high, Then even the national average, I was talking about Baltimore. It's plummeting. That market actually feels more pain than a market where the unemployment rate is holding steady at layby like three and a half percent.

Ron Hetrick: This is something we've observed for forever. Drastic changes in the market caused people to panic. So they go nuts. But if sustained low unemployment people make much more rational decisions. That's one of the reasons why you see this feeding friends we have right now is that we are unemployed. Is diving downward and we are rapidly losing.

Ron Hetrick: I don't know if you saw, but the total number of people getting unemployment claims was the same level as it was in 1973. But our, the U S has grown by like, you know, millions and million 40th, something like 40, 60 million people in that time. And yet we still have the same number of people in unemployment claims as we did back when I was five years old.

Ron Hetrick: So this is the kind of stuff that is causing people to go out of their minds right now. That's something, you know, just another thing to be. So I didn't exactly answer the question, but I did kind of hopefully go towards it.

Ron Hetrick: Full-time versus permanent salary versus hourly. No, we do not have that in our software. The problem with that is it would be modeled on it, the problem is there's so many things. I got people asking me, Hey, can you just show me like contingent jobs? So I'm like, well, we're not like a big clearing house VMS.

Ron Hetrick: It's hard to know. What things are kind of coming through, you know, this particular, you know, is this just a staffing job? One of the things I didn't show you in the tool that we built here is it actually does. We do gather all the jobs. I think we have 12 million a month that go through and we do allow people to kind of build presets in a way so they can see these openings and people will say, well, yeah, but.

Ron Hetrick: Those aren't like staffing. Those are permanent. We say, look at the pain people are in right now. If you've got a phenomenal candidate, approach people with a phenomenal candidate, and if they don't want them, somebody else will. But at least another thing you can tell is, well, who is, you know, who out there is trying to hit this right now?

Ron Hetrick: And it's just like, In the old days, it literally was about like, I really need to get in the doors so I can sell nowadays. It's like, look, if I can show you a proven history of finding people, especially right now, you know, if you've got an ability to show people that you can recruit and you can bring forward candidates who are ready to go, people are getting so desperate.

Ron Hetrick: I mean, it's, I don't talk to anyone. That's not going to spend the, literally the only people I've talked to. Are like, oh, they're in this place, hiring this. And I'm like, well, yeah. I mean, you're probably the only person in that entire market hiring that. So, you know, that's, I understand that one, but for anybody who's dealing with a skill set that is, can go across industries, man, that's going to be so tough.

Ron Hetrick: Oh, also, I do wanna say this about hourly and this isn't directly about hourly, but I do want to say this cause this is important. In my demographic drought presentation in the article if you hear me speak, one of the things that I hit constantly is before COVID ever was. We were seeing a significant increase in the number of people walking away from full-time jobs to work part-time jobs.

Ron Hetrick: Now, if you think about that, and now the pay rates that are occurring in some of these part-time jobs, that attraction of those jobs has only been going up exponentially. So if I was already willing to go to a part-time job that was paying 11, $12 an hour, how much more would I be willing to do it? If it's paying 17 to $18 an hour.

Ron Hetrick: Because I'm not, I'm used to making X number of money over a 40 hour, 45 hour work week. Now I can make that same amount of money working 30 hours. And if you read the article, staying up all night, playing call of duty and then going to work the next afternoon. So this is something that you have to understand is there also is an increasing number of people who are dipping their feet in the labor market, not looking for full-time work, especially as things still resolve themselves as we're working through right now.

Ron Hetrick: So just always, so be aware of that.

Ron Hetrick: Anything else. And thank you for the compliments. I really appreciate that. Oh, the sources of data, we pull all of ours from. So it's basically you name the job board, including any company's job board. So we go straight to the companies themselves and also just job boards in general. Harvest all of that data.

Ron Hetrick: Now I will tell you that I'm also a big fan of smoothing. So if you don't want to look at a heartbeat, then we've kind of taken care of that you still saw some kind of jumping around on the wage gaps, but we actually do try to smooth those numbers out a little bit. You know, because sometimes when you're dealing with mixing a bag, right? Cause you have people who are, I'm trying to hire and then they disappear and other ones come in. So you kind of get this. You're always going to have a mixed bag change. So we try to navigate that by only allowing things to move so much. And that way you can kind of smooth that out a little bit.

Ron Hetrick: So it is actually coming from the postings, but we help it a little bit by just making sure that you don't go crazy looking at this heartbeat, jumping up and down. Staffing firms commission. Can we receive the site software information? The one for our product is if it's where Emsi burns glass, boy, you would think that me getting on this, that I would have our websites.

Ron Hetrick: So you're going to want, if you Google smart rec S M a R T R E Q, it will come up with Emsi burning glass, go to our website. We have a page. Incredibly. I didn't even put it on the slide because I'm an economist, obviously. Didn't think about that part of it, but yes, you can go to Emsi burning glass, or like I said, just Google smart rec and it will take you to the page that we have.

Ron Hetrick: And I was one everybody to know when I designed this, I did it for frontline people. You know, we have Emsi burning glass which specializes in more of the market research side. We have a lot of clients, probably even on this call who have our analyst tool, which is for the people who are more in a corporate setting who want to do kind of deep dives into, should we expand to this market or not smart rec was really for that person.

Ron Hetrick: Who's like, look, I'm about to go meet a client and I'd need to look something up right now. Because I am already, I'm looking at their rates and they seem like garbage. So I'm going to go over there and be like, look, you either do this for the rate that I'm asking for. I'm not going to move on from this. So that's why I designed the product.

Ron Hetrick: I got really sick of watching staffing companies kind of get beat up over the years. And so really trying to kind of help people out and knowing how to go about that. 

Ron Hetrick: If you remain with the wait, I kind of. That was really quick. I didn't see that. Sorry. How would you explain this kind of data-driven approach to consultants who are hesitant to embrace?

Ron Hetrick: Wow. If you're afraid of data. So here's, so I told you I cut my teeth at the bureau of labor statistics. And on, I first started writing articles there. I remember the first time I wrote an article, somebody edited it so badly. There was pretty much nothing left of my article and they came back to them and they said, you know, I see a lot of you in this analysis, but I don't see a lot of data.

Ron Hetrick: And they say the way that you, this was the advice I received. And I cannot, I'm just going to tell you this is the secret. Your job is to present data, you do your research, do it in a way that to beat you, they have to have better data, more believable data from more reliable sources. If you've done your homework, you win.

Ron Hetrick: And so every time I write an article, every time I do anything, even like, I'm constantly, when you're being interviewed by the news, they're asking you these questions, you, if you know, for sure that you've got the best data point you speak with boldness, you speak with confidence. And you defy people to challenge it, and they have to bring data to the equation to kind of contest that.

Ron Hetrick: So I would say that, you know, it really is about if you don't believe the data, I don't know what you are going to believe at that point. Some people are just going to be stubborn. I know right now there are still CEOs of companies out there who don't believe they need to increase their pay rates at the lower end.

Ron Hetrick: I'm just like good, then lose, like, and stop yelling at your HR people and stop yelling at your recruiters for not finding people when you're not budging from your pay rates, because that's the way that works. And fortunately I've been very fortunate that I'm currently traveling around the country and speaking to all kinds of CEO groups, all kinds of associations about this.

Ron Hetrick: So more and more people are starting to understand like this isn't going away. If you read Demographics Draught. This is a permanent thing. We are losing people left and right, who are retiring. The younger generations are not there numerically, nor are they. They're in an interest in working in the labor force to the degree of the generations prior, this is permanent.

Ron Hetrick: As long as we have very low immigration numbers, this is permanent. So it's something that you're going to get there eventually. So I would rather you get there now and start to plan and do your strategy for the future now versus waiting longer and just being in more and more pain and firing your HR people or doing something else.

Ron Hetrick: Ridiculous. Because you're denying reality. It's just, it's the craziest thing. And I think that's why I'm passionate about this showing you this kind of data, because it's like, look, I guarantee you, somebody in Nebraska doesn't understand that their unemployment rate of 1.2% is absurd. I mean, that is, that literally means there's no one left.

Ron Hetrick: I mean, it's not like Nebraska has a lot of people anyway. And now to say 1.2%, I mean, anybody in that number. Probably voluntarily just left a job and there's waiting a couple of weeks before they go find another one. I mean, that is a brutal situation. So that's why I say, man, if you have the right daddy, you speak with confidence on him.

Ron Hetrick: Somebody said, okay, so I'm here with commission mates. If you remain with the firm long-term you can earn far more. Most jobs will pay. Geez. Yeah, no kidding. That's true for so many things right now. 

Ron Hetrick: If you, that this is a there's so many different things here about this particular question or statement or anything. One is. I'm getting asked constantly with great resignation. I actually have a TV spot later in this week. We're talking about this on air and everybody's kind of like, when does this end, you know, what is this quitting?

Ron Hetrick: And the thing about this is if we look back historically to really low unemployment rates, we see that people will quit so many times and eventually they find something that they can do. I really like this job and I want to stay in this job and I want to develop myself. So there's a part of this equation.

Ron Hetrick: You can maximize who you are by, you know, staying in something and becoming awesome at it. And then when you're dealing with, I talked earlier about high-end jobs. If you treat your career as like gig work, you can also really maximize income. That's the reason why I said. Low, very low unemployment rates are really bad for staffing for lower, skilled labor, but it's really good for higher skilled, because you can keep a higher skilled person.

Ron Hetrick: I mean, I remember seeing this years and years ago, especially in the construction industry when construction was insane back in the late two 2010 or teens or two singles, whatever, 2007 ish. And what you had were people that were working three to six months a year and making so much money that they were taking like three to six months off to basically travel around and then kind of re-engage.

Ron Hetrick: So when you have. Staying with a really strong economy. There is more of an appetite for people if they can get those kinds of high-end pay rates that normally a higher level consultant would get, if they can get that through kind of the staffing industry placing, basically finding gigs for them. That is yet another way that you can kind of sell that to the candidate of look, if I place you on two or three assignments this year, I'm going to blow away anything you would have.

Ron Hetrick: You know, on your own doing your own job search. So I think there's a thing around that, that there's all kinds of ways of looking at this. It can benefit you the tight economy that we're in, the way that it's gonna hurt you is if you sign up for a volume fill, right. I mean, almost feel suicidal to me.

Ron Hetrick: And I think you're going to be frustrating yourself and your recruiters like crazy. If you kind of make promises that you used to be able to make five, 10 years ago. However, if you maximize that return on each placement, the opportunity is completely there. The data is in your favor. The feeling is in your favor, people are feeling the pain.

Ron Hetrick: Trust me. I spoke at some conferences last week. Did some traveling and people are just practically in tears. Unable to run their operations in some cases I'm speaking tomorrow in the next day to agencies who are trying to staff nursing homes trying to staff, you know, school jobs, and they are in incredible pain.

Ron Hetrick: And it's like, people are wondering, well, where does this end? And I'm like, things go away, you know, weaker industries, people that can't pay as much are going to go away. And I mean, this is an awful thing to say, but it's true about staffing. It's predatory. As the weaker companies can't hang or they can't stay in that game, then those are where your next people come from.

Ron Hetrick: And if those places don't close down, it just stays a really terrible situation for everybody. But the economy has a way of kind of straightening itself out in time. It's just a really painful process when it does it. I love these questions by the way, I'm used to giving demographic drought stuff and everybody's like, please tell me what I can do to find people cause I'm miserable.

Ron Hetrick: And I'm like, yeah, I don't produce them in an effect. Have we ever allowed the class to audit the data to combat the question of, are we about auditing? I'm not so sure, but we can give you all of the sources. We don't hide anything. In fact, the tool that I showed there is a little question mark, beside every single thing, that'll take you to a page to tell you exactly where the data came from and exactly the calculations that we used.

Ron Hetrick: Okay. Any time that I ever did analysis when I was in allegiance and I would compare markets, I would tell people, look, these are the things that I'm putting out there. These are the data points. If you don't like the way they're weighted, tell me how to weigh them differently. Tell me your way of weighting that you think will make it more believable to you, but I'm telling you, there are no other data points out there that are going to help you in your particular situation.

Ron Hetrick: You're trying to hire people. So my job is to tell you what's happening in that market. So in the case of our data, like I said, where we have. But through burning glasses when we merged with them, burning glass obviously was a job posting aggregator. We can, they literally have thousands and thousands of sites that they're, I can't even remember how many, it's a ridiculous number of sites.

Ron Hetrick: And then as that's where we're gleaning the other information like wages and such as, from that, none of that's coming internally. We're not modeling. We do have that as part of our tools. However what I'm showing inside a smart rec is literally the stuff that people are publicly saying. I will tell you if you saw Colorado now requires you to put pay rates on all job postings and more and more states are looking at adding that we do believe that will be a standard.

Ron Hetrick: It is a standard in certain countries. If you're lucky enough to be in those countries, that's even better. But we're hoping that more and more companies start to understand the value of being open on what they're paying. You know, what it would help them a lot in BAML to attract and retain people if they would just be upfront about it.

Jakob Feinböck: Alright, one quick question, then we need to move on. 

Ron Hetrick: So help us determine what states are best to place for certain issues. I know. Okay for looking for workouts, a tough one. So we are not we're not a job board. As far as we are. Tracking candidates. Now we can, I can tell you that the way I designed the software is basically, here's my thoughts.

Ron Hetrick: Supply is a funny thing. So if you have a lot of something and you're desperate enough, you'll get it. You'll, I mean, you'll get it now, how much you're gonna have to pay at that particular time, you know, is going to be up being in a market that doesn't have something, you know, if you're a healthcare company and you moved to a market, that doesn't mean.

Ron Hetrick: People who do work in the healthcare industry. Once again, really bad. You know, I did site selection, consulting a number of times, and I would tell people, this is not a field of dreams. Do not go to a market that doesn't have something at all. And think that it's going to, everybody's just going to show up.

Ron Hetrick: People are smarter than that. If they go to your company and lose their job. They're now going to have to move and go outside of the market. Again, that's a lot of pain moving is one of the most stressful things you're ever going to do. So you're going to want to locate in a place that has the optimal mix of other companies that are hopefully, you know, helping people reach a higher level of skill set that you can hire, but it's not a feeding frenzy.

Ron Hetrick: It's not a blood bath. The goal is to find that fine balance. So yes, the market, the tool does do that. So, you know, I showed you the tool. I brought up a job. Put a market on the top. We've got every Metro area in there. You can go up, bring anyone up and kind of see what the situation is like.

Ron Hetrick: You'll see the amount of demand that's being put on that market. You'll be able to see the supply. It tells you if that supply is a good supply for the amount of demand that's happening there right now. Or we'll tell you if it's a bad supply for what's happening there right now. So in essence, yes, it does.

Ron Hetrick: It's not it's not the same thing as the Emsi burning glass analyst tool talent analysts, which that's kind of, it does that all in kind of one collective shot. You can do everything in one. I would recommend a talent analyst to do that. Smart rec, like I said, it's more for that frontline person.

Ron Hetrick: It's the person who's already in that market. Who's about to have that conversation, you know, and I tell people when you're doing something, it's two things, right? Number one. Should I even be trying to fill this system may be dumb. I will try to fill this right now. Maybe the worst business decision I ever made.

Ron Hetrick: It's just going to have my recruiters working themselves into the ground, making no money or two. Yes, I know I can fill this, but I need this client to have realistic expectations. I need them to pay correctly and I need them to understand they're not getting those skillsets right there. I can get them, but I can't get them.

Ron Hetrick: So that's a part as well as just want to make sure that you understand, like there is a difference, we have all of those tools. If anybody knows Emsi burning glass, and now we're together, you understand, like that's what we provide is this kind of deep dive analysis into the labor markets. However, you've still got to have an understanding for that unemployment side, and that is in the tool as well.

Ron Hetrick: Take the time and educate yourself on what these unemployment rates mean. Take the time to see how they're evolving in a market like that that will help you to understand the heart of the people that you're talking to. The pain that they're in, you will be able to walk in that room and go, I know you're in pain.

Ron Hetrick: You don't even need to say anything. I got it. And now you can kind of work too. I want to work with you, but here's what we're going to have to do. We're going to go more general than what you're asking for. Forget these years of experience. I'm going to get you this. I know I can get you this, but you need to have the data to make that already.

Jakob Feinböck: Alright, thank you very much for your time. We will have 

Ron Hetrick: Thank you everyone. I appreciate you attending.

Jakob Feinböck: Yep. Great. And we will share all the information later. Perfect. 

Ron Hetrick: Thank you.


Speakers

Ron Hetrick

Duration

56

min

Watch Session now